LANSING – Wrapping up a deal that allowed for federal exemptions to an increased minimum wage remain in place, the Michigan House on Tuesday finalized legislation that would provide low-income residents with an earned income tax credit, as well as install a youth minimum wage.

The youth minimum wage would be equal to 85 percent of the state’s minimum wage under SB 1364 . Rep. Bill Huizenga (R-Zeeland) tried to amend the bill to include an exemption to the wage for students who work at college facilities, but that amendment failed for lack of support and Huizenga said the issue would have to be dealt with at a later time.

House Speaker Craig DeRoche (R-Novi) said the student exemption was not amended into the bill because it was not part of the negotiated deal over in the Senate. SB 1364 was approved on a 92-14 vote, with all dissenting votes coming from Democrats.

“We wanted to get these bills to the governor’s desk today,” DeRoche said.

There was talk on the floor that some Democrats wanted to amend the earned income tax credit bill, SB 453 , to have the state credit eventually match 25 percent of the federal credit (the Senate passed a 20 percent mark), but that amendment was never offered up for a vote.

Instead, Rep. Steve Tobocman (D-Detroit) said that action on the EITC and youth wage legislation was the “best public policy” he’d seen in his four years, and that, “There’s no better tool than moving people out of poverty (than) by rewarding those low wage workers.”

But not everybody felt so, as the EITC bill passed with three dissenting votes from House Majority Floor Leader Chris Ward (R-Brighton), Rep. Leon Drolet (R-Clinton Township) and Rep. Bob Gosselin (R-Troy), 103-3.

Drolet said he opposed the bill because it pays some citizens to not pay taxes essentially.

“Over 88 percent of those eligible for this credit get refunds in excess of what they actually paid in taxes. In other words, the state is taking money from some citizens and paying it out to other citizens in cash.”

Going off of 2004 numbers, Drolet said that while 662,912 Michigan residents filed for the federal EITC and claimed $1.169 billion in income taxes, 586,327 got credits back totaling $1 billion.

But Paul Long with the Michigan Catholic Conference thanked lawmakers for coming together in a bipartisan manner to provide needed assistance.

“A state earned income tax credit will not only provide economic assistance to those who are working in low-paying jobs, but also will prove to generate economic growth in the state,” he said. “By phasing in a state credit equal to 20 percent of the federal credit over two years, the House has acted in a compassionate manner to help enhance the dignity of the working poor of the state.”

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