In the latest installment of data center tax breaks struggling through the House, one of the two-bill packages passed with several politically vulnerable Democrats staying off the board while the second bill failed to receive sufficient votes.
SB 237, the use tax exemption, passed 56-41, with many of the Democrats in politically competitive seats declining to vote due to concerns that voting yes would tick off their environmental allies, who knock doors for them and organized labor, which provides significant financial support.
After an almost 40-minute period of whipping and a mixed bag of ayes from Democrats and Republicans, Reps. Matt Koleszar (D-Plymouth) and Ranjeev Puri (D-Canton) provided votes 55 and 56. The bill passed with 34 Republicans and 22 Democrats.
That vote total includes 12 Democrats who abstained from voting: Reps. Julie Brixie (D-Okemos), Erin Byrnes (D-Dearborn), Jaime Churches (D-Wyandotte), Betsy Coffia (D-Traverse City), Jennifer Conlin (D-Ann Arbor), John Fitzgerald (D-Wyoming), Carol Glanville (D-Grand Rapids), Jim Haadsma (D-Battle Creek), Denise Mentzer (D-Mount Clemens), Jason Morgan (D-Ann Arbor), Carrie A. Rheingans (D-Ann Arbor) and Mai Xiong (D-Warren).
When the clerk closed the board and Speaker Pro Tem Laurie Pohutsky (D-Livonia) attempted to get a vote from those whose names were still in white by requesting their votes individually, Morgan shook his head and said he didn’t want to vote.
“That’s not an option,” Pohutsky said.
In the second vote, HB 4906 was cleared from the board for insufficient votes – twice. Republican leadership reportedly demanded that all the Democratic members vote one way or the other on the bill. Some Democrats declined to do so, and some Republicans who were yes votes the first time around changed their minds.
The issue was dropped at 6:30 p.m. for the day.
SB 237 and HB 4906 exempt data centers from sales and use tax and have been hotly debated within the Democratic caucus because it pits two friends against each other – labor and environmentalists.
Labor wants the bills for the construction jobs that come with building these enormous buildings for computer servers, which are becoming more of a necessity with the advent of AI. However, environmentalists want guarantees that the power used by these enormous facilities, which is compared to a small-to medium-sized city, is coming from clean energy sources.
As one source puts it, members “don’t want to choose an enemy this close to November.”
Before the board was closed on the vote for SB 237, Rep. Graham Filler (R-St. Johns) said “we’ve got a bunch of nice, wonderful human beings who love their areas, (their names are) in white, you get two more and let’s move the ball down the field.”
Rep. Bill G. Schuette (R-Midland) said he’s in favor of lowering taxes and increasing investments.
“Data is going to be a huge resource fueling part of the 21st century economy, so I want those investments to happen in Michigan, and that’s why I’m in favor of also lowering taxes to spur investment. What a concept,” Schuette said.
Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter
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