Republican Push For Higher Minimum Wage Likely Has Anti-Taxpayer Strings Attached

Top Republican officials supported a higher minimum wage and tied it to inflation to get Democrats to support a measure to double the gas tax and secure Gov. Rick Snyder the extra money he wants for road funding, according to a widely accepted story out of Lansing.

The same story was being repeated in conversations at the Detroit Regional Chamber of Commerce's annual Mackinac Policy Conference last week.

Senate Majority Leader Randy Richardville, R-Monroe, introduced Senate Bill 934 because Michigan's various business groups had decided they couldn't risk the possibility that the minimum wage increase proposal would pass in November. Senate Bill 934 had to be passed by the Legislature and signed into law before May 28 — the date the minimum wage ballot proposal petitions were going to be handed in.

Three Lansing political observers, Bill Ballenger, founder of Inside Michigan Politics; Mark Grebner of Practical Political Consulting, a Democrat who works with both political parties; and Dennis Darnoi of Densar Consulting, who is a Republican consultant, shared their thoughts about what has recently transpired.

Why the minimum wage was increased

"The apparent May 28 deadline by which time Gov. Snyder had to sign the bill into law to render moot the petition drive may or may not prove to be important," Ballenger said. "I've never seen that sort of argument stop lawyers for aggrieved plaintiffs from filing suit, anyway, so this may very well be headed for a lengthy court battle."

Darnoi said knocking the minimum wage increase proposal off the ballot appears to be the motive behind quickly moving Senate Bill 934.

"Republican leadership was clearly concerned about the impact that a ballot initiative on the minimum wage could have on turnout in the general election," Darnoi said. "The speed with which the legislation was drafted, introduced, moved through both chambers and presented to the governor is the surest indication that the explanation above has a tremendous amount of merit. It also serves as a stark reminder of what can occur when the legislative leaders get their respective chamber in line."

The apparent deal

An apparent deal was struck, which resulted in significant changes to Senate Bill 934, and it was this changed version of the bill that was passed by the Legislature and signed into law by Gov. Rick Snyder within hours of the May 28 deadline.

The version of Senate Bill 934 signed into law would still theoretically kill the ballot proposal, but provided a larger overall minimum wage increase in various steps than the initial version of the bill, and it indexes the wage to inflation. These changes were apparently made to win support from the Senate Democrats not only for Senate Bill 934 but also for a legislative plan to double the state's fuel tax by 2018 to provide a new funding stream toward the $1.5 billion goal for road and bridge repair and maintenance. Gov. Snyder has been pursuing the creation of this road funding revenue stream since his 2013 State of the State Address.

"I simply don't understand why Democrats, Senate or House, would feel they have to vote for a hike in the gas tax because a 'more generous' hike in the minimum wage was passed by majority Republicans in the Legislature than what Sen. Richardville originally proposed," Ballenger said. "How could a Democrat not vote for a minimum wage hike, of any kind? And if he or she did, why does that mean they must vote to provide votes for transportation funding to help Gov. Snyder and the business community score a major victory?"

Ballenger added that he isn't so sure the alleged deal will happen.

"I simply don't believe Democrats are that stupid," he said. "They'll get nothing out of it. What they should really worry about is how they are going to look if Republicans wind up providing more votes to bailout Detroit in the 'grand bargain' bankruptcy proceedings than do the Democrats. That will really come back to haunt them, among swing voters and their own core constituency, in my opinion."

Grebner said it looks to him like Democrats are becoming relevant in the legislative process and garnering some small victories as a result.

"It appears the Democrats have finally found a role for themselves as a third force in the Legislature where their existence gives the establishment Republicans bargaining power over their right-wing compatriots," Grebner said. "As long as the right-wing tries to force the 'centrist' Republicans to adopt a hard-right program, the Democrats can make themselves useful by offering their votes to make up a majority.

"This only works as long as the right-wingers are incredibly incompetent," Grebner added. "By proper horse trading and deal cutting, the right-wing should be able to get 95 percent of what it wants, including freezing the Democrats out of any say at all. But apparently [by] overplaying their hands, and over insisting on rigid ideological conformity, they've pushed Snyder and the center into cutting deals with the Democrats. Obviously, the Democrats' grip on political power is so tenuous they can't really trade for very much. It has to be small changes around the margins. But whether the real cause is incompetence by the right, or very competent dealing by the Democrats, they've cut themselves back into the game against all odds and reason."

Darnoi said if some kind of deal with the Democrats is being pursued to garner enough votes for passage of a gas tax increase, it is likely a deal in the making, not a done deal.

"There are too many moving parts to conclude that an actual deal — in the truest sense of the word — was formalized," Darnoi said. "Certainly any legislation increasing taxes will require votes from the Democrats to ensure that the bill or bills reach the governor's desk, but two big questions remain.

"First, will the overall transportation package include some of the changes that the Democrats have been calling for or is it going to contain only Republican backed initiatives?" Darnoi said. "Second, the issue surrounding the minimum wage ballot initiative is not entirely settled and the possibility remains that voters will have an opportunity to take up the issue in November. This second issue has the potential to upset any so-called deal as Democrats may feel emboldened to press harder on the first issue. If met, Democrat demands would likely reduce the amount of Republican support for final passage of a transportation package thereby necessitating more Democrat votes. If their demands are not met, Democrats have the luxury of time, knowing that very few Republican would vote on a tax increase before Aug. 5."

What impact, if any, would passage and enactment of the fuel tax increase likely have on this year's election?

"It depends on how the voting breaks down if it happens at all," Ballenger said

Grebner said it would probably benefit Republicans in the general election.

"It takes a few issues off the table, including 'tax-and-spend' taunting in some races," Grebner said. "It partly disarms the Republicans, while improving the political climate for them. Not having the roads as a constant vulnerability for attack is probably a good trade for having to give up the pretense of never supporting a tax increase."

Darnoi said it might help Republicans a little in the election, but it could intensify resentment and dissatisfaction within the GOP base.

"The impact on the general election will be minimal and is unlikely to be negative," Darnoi said. "Passage of a fuel tax hike surely would be packaged as a 'bipartisan, bicameral' accomplishment that would seek to highlight the benefit of compromise. But you can excuse conservative Republicans from wondering if they live in some alternate universe where a bailout for Detroit, an increase in the minimum wage and an election year tax hike are all possible under GOP control of government.

"In that regard, these votes could inspire a backlash in Republican primaries where one candidate is seen as supported by the establishment and another is seen as being outside the establishment," Darnoi added. "Whether running under the label of tea party, Libertarian or anti-establishment, that candidate could use these votes to easily demonstrate his or her independence from the party line. One could also make the argument these measures, coupled with some past votes, guarantees that when Republicans hold their state convention in August the temperature inside Suburban Collection Showplace will be hotter than the weather outside."