JACK SPENCER: Deals and rumors of deals

A measure to knock the minimum wage hike proposal off the November ballot apparently became one key strand of a larger deal-making web in Lansing. As a result, the bill was amended more to the liking of Democrats before being passed and signed into law by Gov. Rick Snyder.

The principle purpose of Senate Bill 934 was to keep the minimum wage increase proposal from getting on the ballot. This is believed to have been accomplished when the bill was passed and signed last week. Attorneys might squabble about it, but most Lansing insiders are betting that by eliminating the statute referred to in the petitions to place the proposal on the ballot, enactment of Senate Bill 934 made it ineligible for voter consideration.

But that doesn’t explain why GOP legislative leaders converted the bill into something more palatable to the Democrats. The initial version of Senate Bill 934 would have raised the minimum wage 75 cents, to $8.15 an hour, for non-tipped employees and 28 cents, to $2.93 an hour, for tipped employees.

The version that passed and was signed into law would eventually increase the wage to $9.25 an hour for non-tipped employees and to $3.52 an hour for tipped employees. More significantly, the bill tied the wage to inflation – meaning it will almost surely automatically keep increasing. These increases are capped at 3.5 percent and only take place if unemployment remains below 8.5 percent.

Why did the Republicans “sweeten” the minimum wage provisions in the bill before moving it? The answer, according to so-called “common knowledge” rumors in Lansing is that Gov. Snyder and Republican leaders are trying to cut a deal with the Democrats.

Supposedly, this deal would get the Democrats to vote for legislation doubling the gas tax to provide the $1.5 billion in road funding Snyder has been seeking since his 2013 State of the State Address.

Such a deal must involve more than just the minimum wage issue. However, the potential political prize from the GOP point of view seems clear. If Snyder secured the long-sought-after road-funding it would enhance his image as a leader who achieves stated goals Also, if he could get the funding with most of the Democrats on board, it would fit in with his “I’m a nonpolitician” campaign theme.

Perhaps most importantly, if the Democrats agree to support the tax hike, virtually all legislative Republicans would be free to vote against it. Think about it; politically a deal like this would be the equivalent of letting Republicans have their cake and eat it (or more appropriately not having to eat it), too.

That might be the problem with this whole scenario; politically speaking, what on Earth would the Democrats get out of this? Those tempted to think it would be the higher minimum wage and tying it to inflation should think again.

Remember, the real purpose behind the ballot proposal was to give Democrats an issue to distract voters and possibly increase base turnout; raising the minimum wage was strictly a secondary goal. While the changes to Senate Bill 934 represent a marginal policy gain for Democrats nothing about them helps the Democrats in the upcoming elections. This is especially so compared to the political advantages the Republicans would get out of the deal.

Something is cooking in Lansing and at this point we only know about a portion of the ingredients. Either that or the deal is half-baked and destined to fall flat – making the rewrite of Senate Bill 934 look like a senseless miscalculation.

Here’s another puzzler – Senate Bill 934 was passed and signed on May 27, the day before the minimum wage petitions were handed in to the Secretary of State.  It was sure nice of those running the ballot initiative to let Snyder and legislative leaders know ahead of time exactly when they planned to hand them in. Had they vanned the petitions to the SOS office on the morning of the 27th, there would have been no point in passing Senate Bill 934 – it would have been too late.

But the way it happened almost suggests those running the ballot initiative cooperated with the Republicans.

As Alice would say, “curiouser and curiouser.”

One thing, however, has become crystal clear. The aspect of the ballot proposal that business groups feared was that it would have ended the “tipped wage credit.” This credit allows employers to pay a fraction of the minimum wage to tipped employees and only make up the difference if an employee fails to get enough tips to reach the minimum wage level.

Apparently the other aspects of the ballot proposal — the increased minimum wage and even tying it to inflation — aren’t significant money issues. They may be an annoyance and businesses strongly oppose them, but not enough to raise funds to take on a statewide ballot proposal. Senate Bill 934 protected the “tipped wage credit” and business interests supported the bill.

By so doing they revealed the part of the minimum wage issue that was really dangerous in their eyes.

Jack Spencer is Capitol Affairs Specialist for Capitol Confidential, an online newsletter associated with the Mackinac Center for Public Policy (MCPP). 

MCPP provides policy analysis. The political analysis represented in this column does not necessarily reflect the views of the Mackinac Center.