Detroit Regional Chamber > Advocacy > April 29 | This Week In Government: EITC Coalition Calls For Support Of Raising Credit From 6% To 30%; Senators Raise Higher Ed, Community College Operations Funding

April 29 | This Week In Government: EITC Coalition Calls For Support Of Raising Credit From 6% To 30%; Senators Raise Higher Ed, Community College Operations Funding

April 29, 2022
Each week, the Detroit Regional Chamber’s Government Relations team, in partnership with Gongwer, will provide members with a collection of timely updates from both local and state governments. Stay in the know on the latest legislation, policy priorities, and more.

  1. EITC Coalition Calls For Support Of Raising Credit From 6% To 30%
  2. Senators Raise Higher Ed, Community College Operations Funding
  3. 3 GOP Candidates For Gov See Sigs Challenged
  4. Great Schism At Hand For Michigan Republicans
  5. Stamas: Budget Could Be Done Late June, Early July

EITC Coalition Calls For Support Of Raising Credit From 6% To 30%

Former lawmakers, faith-based organizations and policy centers called for the Earned Income Tax Credit claimable for credit on state tax to be increased from 6% of a taxpayer’s federal EITC to 30%, with the coalition calling the move pro-work and beneficial for working families.

On Thursday during a video press conference, former Senate Majority Leader Ken Sikkema said while both sides of the aisle have introduced legislation to raise the EITC, a bill introduced by Sen. Wayne Schmidt (R-Traverse City), SB 417, would have a major impact on Michigan.

“It would encourage employment and help local communities in terms of their economies, it would provide a tax cut to low-income working families who really need it most,” Sikkema said.

The bill was introduced in May 2021 and had a hearing in December of that year where it saw much support from business organizations. Democrats have historically called for the increase of EITC since former Governor Rick Snyder and the Legislature in 2011 cut it from 20% to 6%.

Gov. Gretchen Whitmer during her State of the State address proposed raising the EITC to 20%.

Cutting taxes is a top priority for Republicans this budget cycle and many Republicans have requested cutting taxes elsewhere to save Michigan families money, including reducing the income tax rate to 3.9%.

However, Democrats this legislative term have been pushing for more targeted tax cuts and an increase in the EITC while Republicans remain focused on cutting taxes on a wider scale.

When asked if they were concerned the 30% expansion would not be included for next year, Sikkema said he is encouraged that both sides of the aisle want to expand EITC.

“I think we’re starting in a good place here. Now, the critical time period is the next few weeks as budget discussions occur and as tax cut discussions occur,” Sikkema said. “From a policy standpoint, it’s got a lot going for it and we think from a political standpoint, it also has a lot going for it.”

Monique Stanton, president and CEO for the Michigan League for Public Policy, said raising the EITC will benefit approximately 750,000 residents and almost one million Michigan children. Veronica Horn, president and CEO of the Saginaw Chamber of Commerce, also emphasized how impactful the bill would be for working families.

“We support and applaud this legislation as it exemplifies a pro-work philosophy,” Horn said. “It provides financial incentive to increase participation in the workforce because it is only available for families that work. And at a time when many employers are having difficulty filling available jobs, the EITC has a proven track record of pulling people into the workforce.”

Horn also said it increases local purchasing power and could serve as the cornerstone of the state’s economic recovery plan post-pandemic.

The coalition is made up of more than 80 organizations and includes the Detroit Regional Chamber, the Michigan League for Human Services, and the Michigan Poverty Program.

Senators Raise Higher Ed, Community College Operations Funding

Lawmakers agreed Tuesday to raise the proposed operations funding increases in the higher education and community colleges budgets to align with recommended funding increases proposed by Gov. Gretchen Whitmer before reporting their budget bills to full chamber.

While there are still significant areas of differences between Republicans and Democrats on funding level in numerous line items and in the use of School Aid Fund monies to supplement higher education, the bipartisan move pointed to some momentum in crafting an acceptable final product.

Both the higher education and community colleges budgets, SB 842 and SB 843, respectively, were reported by the Senate Appropriations Committee on Tuesday in bipartisan votes.

By a 14-3 vote the committee reported the higher education budget, with Sen. Tom Barrett (R-Charlotte), Sen. Rosemary Bayer (D-Keego Harbor) and Sen. Jim Runestad (R-White Lake) voting in opposition, with Sen. Sylvia Santana (D-Detroit) abstaining. The community colleges budget was reported 17-1, with Barrett the lone opposing vote.

As moved last week from Senate Appropriations Universities and Community Colleges Subcommittee, both universities and community colleges had 3% one-time and 3% ongoing increases in operations funding. This was below the governor’s proposed 5% one-time and 5% ongoing operations funding increases, with the Senate proposing a new funding formula for universities.

On Tuesday, amendments for both budgets from Sen. Curtis Hertel Jr. (D-East Lansing) moved the increases to 5% one-time and 5% ongoing to match the governor’s proposals.

“I’ve always fought to try and get higher education as high a funding as possible,” Hertel told reporters following the meeting. “So, working with Chairwoman LaSata, working with Chairman Stamas, we were able to get the amendment, and have it adopted and I’m proud of that, and hopefully our negotiations will end there.”

By comparison, the House higher education budget bill, HB 5785, includes a 3.2% increase for operations funding for the state’s 15 public universities.

Still, Hertel said he still had several concerns with the higher education budget, including the use of School Aid Fund monies in the budget. Also, he was concerned over boilerplate language put in by subcommittee chair Sen. Kim LaSata (R-Niles) to prohibit vaccine mandates at higher education institutions.

The boilerplate language specifies that any university in violation of a ban on vaccine mandates would be subject to having its monthly operations payment from the state withheld.

“The role of managing a university, the needs of a university, are squarely put in the Michigan Constitution as being the individual boards of those universities,” Hertel said. “I don’t think the Legislature has that power, and I’m fairly certain that it would be determined to be unenforceable at the end of the budget process.”

LaSata told reporters she would like to see the language and case made justifying deeming such boilerplate unenforceable, adding she has never seen the case made by the governor in instances where she has done so in the past.

The senator said a majority of the population is vaccinated against the coronavirus and among the rest of the population some have been infected, recovered and have some natural immunity, so mandates are not necessary.

“We’re in a different place today. … If something changes, then we can adjust,” LaSata said.

She also pointed to what she called hypocrisy in allowing sporting events to continue but having various school mandates earlier in the pandemic.

LaSata said the state has money it had not previously anticipated having in its coffers, adding that there is agreement that there has been the level of investment in higher education as there should have been in the past.

With that in mind, she was especially proud of the proposed scholarship program that would provide 2022 high school graduates a grant of up to $3,000 per year for community college or tribal college students and up to $6,000 per year for public university or independent college or university students.

She said the scholarship program will help both middle-class students and those in lower-income households.

“That’s going to help with the debt,”  LaSata said. “We maybe one day won’t be talking about college debt because … we’re able to support students.”

SCHOOL AID: The narrowest vote of Tuesday’s moves to report budget bills came with the School Aid budget bill.

Senators voted 10-8 to report SB 832 to the Senate floor, with Barrett and Runestad siding with the committee’s six Democrats in opposing the bill. The Department of Education budget, SB 833 , was reported by a 12-6 party-line vote.

Sen. Wayne Schmidt (R-Traverse City) told members prior to the vote that “we’re going to get there” and not to worry about the several areas in which funding the governor had proposed was either reduced or eliminated. He said many items are still on the table for negotiation.

Last week the Senate Appropriations K-12 and Michigan Department of Education Subcommittee he chairs moved the bill to full Appropriations with a recommended $450 foundation allowance increase to $9,150 per pupil with cyber charter schools included. This differed from the $9,135 per-pupil funding the governor had recommended while keeping cyber schools at $8,700 in per-pupil funding.

Bayer said she believed there were many strong elements of the School Aid budget, but she had concerns with a lack of funding in areas including mental health, special education and at-risk children supports. A lack of funding to support the recovery efforts at Oxford schools following last fall’s high school mass shooting was also a significant concern.

In a statement several education groups in a statement called the Senate recommendations for the school aid budget a missed opportunity for student progress. The joint statement came from the Michigan Association of School Boards, the Michigan Association of Superintendents and Administrators, the Michigan Association of Intermediate School Administrators, the Michigan Association of Secondary School Principals, the Middle Cities Education Association and the Education Advocates of West Michigan.

“While we are encouraged that the proposal increases the per-pupil foundation allowance by $450, it does not make progress in other critical areas of a student-centered funding formula including special education and at-risk programs,” the groups said. “Neither does it adequately support Intermediate School Districts, Pre-K programs or other educational institutions that provide services to special populations and students with the greatest educational needs. Each and every day educators across the state work diligently to meet the needs of Michigan’s students. Continued progress for our students requires a partnership with the state of Michigan and adequate resources to invest in important programming and services.”

The committee will reconvene Wednesday morning to continue its work on reporting its remaining budget bills. Still needing to be reported to the full chamber are the budgets for the departments of Health and Human Services (SB 828), Natural Resources (SB 839), Environment, Great Lakes and Energy (SB 840) and Transportation (SB 841).

3 GOP Candidates For Gov See Sigs Challenged

With 10 Republican candidates seeking to take on Gov. Gretchen Whitmer in the fall, three saw their signatures challenged in an effort that could keep them off the ballot in August.

On Wednesday, the Michigan Democratic Party held a press briefing on the challenges filed against Republicans James Craig, Tudor Dixon and Perry Johnson. Challenges to the eligibility of candidates to make the ballot were due at 5 p.m. Tuesday.

Of the three, Craig appears in the most trouble. The challenge filed by attorney Mark Brewer cites similar claims as a Republican-backed challenge to Craig’s signatures. On Tuesday, a SuperPAC supporting one of his opponents – Dixon – filed a challenge against Craig’s signatures as well, citing potential forgery and other issues on thousands of signatures that would push him well below the 15,000 minimum needed to appear on the ballot.

Specifically, Democrats say his circulators participated in a “round-robin,” where they pass around the petition sheets to sign different voter’s names with different handwriting. Brewer described a “gang of eight,” who he has suspected of forgery in past efforts.

In this instance, he said there were multiple indications of forgery, including multiple clean petition sheets with no cross outs or other defects, which is highly unusual when circulating because people make mistakes, and distinctive writing styles present throughout.

“There’s plenty of evidence,” Brewer told reporters. “I have never seen such evidence of forgery and fraud in a petition drive in the nearly 40 years I’ve been practicing election law in Michigan.”

The Democrats also filed a challenge against Dixon’s and Johnson’s signatures. They allege all three candidates filed fraudulent or forged signatures. Attorneys said they believed they challenged enough signatures to potentially block ballot access for all three candidates.

For Dixon, Democrats are also alleging all of her signatures are invalid because the heading of the petition sheets includes the incorrect date on when the term for governor would end. At the top of Dixon’s petitions, after the line indicating what office the candidate is seeking, it says “governor (2026),” as the office and expiration date. The term for governor would end at noon January 1, 2027.

Attorney Steve Liedel said there are mandatory petition elements, including that information related to the candidate are true and accurate. He said in the case of Ms. Dixon’s petition, it’s not accurate.

“There is no office of governor that folks are seeking to nominate for a term that ends on some undefined date in 2026,” he said.

The challenge to Dixon’s signatures also says there were 25 signatures from dead individuals and that one of the individuals accused of fraud on the Craig campaign also circulated petitions for Dixon.

On Johnson’s signatures, Liedel alleged he used six of the same eight canvassers Craig used, citing the potential for forgery on 343 sheets. Others were defective because of duplicates, incomplete signatures or other errors on the petition sheet, the challenge says.

Further, Liedel wrote there were 66 individuals who signed the petition who were dead as of April 1. He also included an affidavit from Betsy Hage of Royal Oak, who is included as a signer of Perry’s petition, but says she did not sign the petition.

“We believe we have raised enough challenges to specific petitions to eliminate the viability of that candidacy. There are sufficient quality control problems with the Johnson petitions to put his candidacy in serious doubt,” Liedel said. “It’s our position that both the Bureau of Elections and the Board of Canvassers now has a statutory duty to fully canvass these petitions.”

The Republican candidates scoffed at the challenges.

“Democrats are clearly scared of Perry Johnson’s momentum. Even if every absurd accusation made by the Democrats was legitimate they still failed to challenge enough to impact his ballot access,” John Yob, consultant for Johnson, said in a statement. “Perry will be on the ballot and we look forward to seeing the results of the more statistically consequential challenges made of other candidates.”

Craig said yesterday the Republican challenge against his signatures was a last-ditch effort and he was confident he would make the ballot.

Dixon in a statement called the Democratic challenge “bogus.”

“They will do anything to protect Gretchen Whitmer from having to face me. They know I will force her to answer for closing our schools, covering up nursing home deaths, destroying more than a third of our small businesses, letting our roads get even worse, and the many other failures she has overseen,” she said.

Michigan Democratic Party Chair Lavora Barnes in a statement said the “evidence of fraud and forgery,” found in the nominating petitions shows the three candidates are irresponsible, grossly negligent and are not capable of being accountable leaders.

“The fraud uncovered in just a matter of days demands a full review of nominating petitions from the entire field of gubernatorial candidates,” she said. “The Bureau of Elections and the Board of Canvassers should conduct a thorough examination to ensure they possess the integrity to stand up against Michigan election law.”

The Michigan Republican Party called the move desperate in a statement.

“They will not silence Republican candidates who are going to fight for working Michiganders and ensure they are able to keep more of their hard-earned dollars. We’re fighting to make Michigan a more affordable place to live and it’s clear that goes against what Democrats like Gretchen Whitmer and Joe Biden want,” said Gustavo Portela, MIGOP communications director. “After the dust has settled from this desperate attempt, a Republican Governor will be elected by working Michiganders to bring prosperity and opportunity back to Michigan.”

Great Schism At Hand For Michigan Republicans

Tension between the Michigan Republican Party’s grassroots and its professional class of operatives and elected officials, building for years, has exploded in the past week, setting up an all-out battle for control of one of the last two advantages the professional class has now, the elected leadership in the Legislature.

The triggering event appears to be the victories of Matt DePerno and Kristina Karamo at Saturdays’ state party endorsement convention for attorney general and secretary of state, respectively. The candidates’ emphasis on false claims about the 2020 election has turned off a key segment of the party’s donors and strategists. Longtime Republican operative Tony Daunt resigned Tuesday night from the Michigan Republican State Committee out of frustration and despair that the party is backing candidates focused on false claims about the last election instead of messages to win in 2022.

Top donors in the party are now putting in motion plans to route their contributions to organizations other than the Michigan Republican Party. These organizations will then undertake an effort to help assure nomination victories in the August primary for Republicans who emphasize governing and defeat those still consumed with the idea – refuted many times – that the 2020 election was stolen from former President Donald Trump.

So far, three Republican legislators face Trump-endorsed primary challengers but sources say they are bracing for more Trump endorsements – especially following House Republicans kicking one of Trump’s lead voices in Michigan, Rep. Matt Maddock (R-Milford), out of the caucus.

In the Senate, there are as many as 11 incumbents or House members seeking Senate seats where there is another candidate in the primary. Research is ongoing to determine if any or all of these candidates share the same view as Trump on the election and are ripe for a Trump endorsement. In the House, 13 Republicans are facing primary challenges, some of whom are aligned with Trump or Maddock and his wife, Michigan Republican Party Co-Chair Meshawn Maddock. Then there are many more in open seats, often in crowded primaries, with either a Trump endorsement, a Maddock tie or indications in their social media that they fit the Trump-Maddock mold.

Following the primary, these organizations would then receive money from donors loathe to give to the Michigan Republican Party because they prefer to see their funds go toward keeping the party’s legislative majorities, and not go toward DePerno and Karamo.

The party’s grassroots, loosely defined as those who entered politics during the advent of the tea party movement in 2009 and those activated by the presidential candidacy of Donald Trump in 2016, claimed a long-sought beachhead Saturday at the state party’s endorsement convention in Grand Rapids when their preferred candidates won the secretary of state and attorney general races.

The professional class astonishingly all but ceded the secretary of state slot to Kristina Karamo, a Republican activist whose only experience with elections was making unfounded claims that fraud decided the 2020 election. Rep. Beau LaFave (R-Iron Mountain) and Chesterfield Township Clerk Cindy Berry mounted bids but got no traction. In the attorney general race, former House Speaker Tom Leonard, the party’s 2018 nominee for the post and favorite of the professional class, was overwhelmed by Matt DePerno thanks to endorsements from Trump and Maddock.

The DePerno and Karamo victories laid bare the simmering tensions within the party. When the Michigan Republican State Committee met the next day to confirm the results, the vote was not unanimous, considerable resentment still festering over the halting of the voting midway through the balloting.

Tony Daunt, one of the two Republicans on the Board of State Canvassers, resigned late Tuesday night from his role on the MIGOP’s state committee. In an email addressed to Judy Rapanos, chairwoman for the 4th Congressional District Republican Committee, Daunt cited the priorities and the “leadership” of the Republican Party as his reasoning for leaving.

“Instead of focusing on highlighting the Democrats myriad failures – from the Afghanistan debacle,

to COVID authoritarianism (which didn’t even succeed at their supposed goal of stopping the virus), to crippling inflation, to the still cratered and crumbling DAMN roads – feckless, cowardly party ‘leaders’ have made the election here in Michigan a test of who is the most cravenly loyal to Donald Trump and relitigating the results of the 2020 cycle,” Daunt wrote.

He also called Trump a “deranged narcissist” and rather than distance themselves from this “undisciplined loser,” Daunt said too many Republican leaders are encouraging his delusional lies.

Speaking with Gongwer briefly on Wednesday, Daunt said he had no intention of resigning from the Board of State Canvassers, saying he enjoys the work he does and is glad to provide a solid conservative, Republican voice.

As for working with conservative organizations in the future that better align with his beliefs, Daunt eagerly replied, “absolutely.”

“I’m still a committed conservative, someone who believes in the traditional message and mission and policy prescriptions of the Republican party,” Daunt said. “My current issue and the reason I resigned is laid out in the letter, that it’s become a contest of loyalty to Donald Trump and I’m not willing to pretend that the things he says aren’t false and dangerous.”

Greg McNeilly, a longtime Republican strategist with close ties to the DeVos family, preeminent donors in Michigan Republican politics, said Michigan is at risk of missing the Republican wave building nationally because of the unique foothold Trump has on activists here as a result of the amount of time he has put into Michigan after his 2016 victory in the state.

There could be considerable electoral damage as a result of candidates engaging in “a side show,” McNeilly said.

“I think donors from both sides of the state are just done with this nonsense,” he said. “That being said, they still want to win elections with Republicans who believe in responsible governing. There are ways they can do that and they’re doing that.”

There are ways to run a mail program – the traditional role the state party has played – without the state party, McNeilly said.

“It’s much easier with (the state party), that’s always the preferred route. But when the state party is irresponsible, you have to take other actions,” he said.

Gustavo Portela, deputy chief of staff and communications director for the Michigan Republican Party, voiced no concern at plans of donors to send their money elsewhere.

“Ambassador (and party Chair) Ron Weiser is a prolific fundraiser who has both given and raised the money the party has needed to win in previous election cycles,” he said. “This one will be no different, we fully expect the party will have the funds necessary to not only compete but win in November.”

The victory of Robert Regan in the special primary election in the 74the House District in March was a wake-up call, McNeilly said. Regan, who has embraced several wild conspiracy theories devoid of any factual backing, won the primary where several more mainstream Republicans split enough of the vote to allow Regan to win with a plurality.

While Republican groups were virtually unanimous in endorsing a different candidate, those groups did not attack Regan. That mistake will not be repeated this summer in primary races, McNeilly said.

“You can’t just allow somebody without a firm grasp on reality to go unchecked or unchallenged,” he said.

McNeilly said he empathizes with the frustrations of those voiced by Republicans like Daunt. But he said he is taking the long view and noted the party has seen tumult about once a decade not unlike what is happening now as a wave of new activists get involved.

“In another cycle, the folks that are all causing the issues because of their misunderstandings today, most of them will be gone,” he said.

Some will remain, learn and become productive activists, as happened in the past, he said.

To underscore his point that Trump’s influence has actually waned, he pointed to Leonard winning 46 percent of the vote against DePerno – even with all the personal involvement from Trump and the presence of stolen election proponent luminaries like Mike Lindell and Rudy Giuliani on the convention floor.

Making a “Star Wars” analogy, McNeilly said: “The Leonard forces represent the Rebel Alliance. The Death Star has been knocked off its axis.”

Another possible area for battle would be the election of precinct delegates in August who will play a huge role in determining the next party chair. Weiser has indicated he will not seek another term next year. McNeilly has said it is too soon to say whether there will be a concerted effort to elect precinct delegates. Persons interested in running for precinct delegate must file by 4 p.m. May 3.

Steve Yoder, chair of the 1st Congressional District Republican Party, said he sees a typical situation following a primary fight.

“It’s just a normal process,” he said of the aftermath of DePerno’s victory. “I certainly have delegates that are very excited. I certainly have delegates that are disappointed. But most of them, they want to move on because we have a bigger issue at hand, and that’s win in November.”

Republicans want to retake the secretary of state and attorney general offices, he said.

As to concerns about whether DePerno and Karamo would have the funds to run effective campaigns, Yoder said he hasn’t spoken with the campaigns about fundraising.

“It’s always something you want, a strong candidate that can raise the money and the resources,” he said.

It is on both the party but also the winning candidates to unify the party, and the winners need to reach out to those who opposed them, including donors, he said.

Sen. Aric Nesbitt (R-Porter Township), the presumptive next Senate Republican leader, said there always is some drama at the state party level and has not seen evidence of a wholesale move by donors away from the state party. He said he has confidence in Weiser to raise the money like he did in 2010 and 2018 during earlier stints as chair.

“I just think it’s kind of the typical divide,” he said. “I look at the 2010 cycle when Weiser was chair and the ’18 cycle, they were able to raise the money, we had the partnership, and they were able to provide the resources needed.”

Nesbitt said he had heard from some in the corporate world about taking their donations somewhere besides the state party. But he had not seen evidence of that at the Senate Republican Campaign Committee, though he noted the Lansing fundraising with which he interacts tends to be more focused on the legislative caucuses, not the state party.

Stamas: Budget Could Be Done Late June, Early July

The Senate Appropriations Committee chair told reporters Thursday he feels lawmakers are on track to get the full budget completed before summer recess this year, while the Democratic vice-chair said he looks forward to getting down to what he called more serious discussions than what he said have occurred thus far.

Sen. Jim Stamas (R-Midland), chair of Senate Appropriations, estimated a late June or early July completion date for budget work in the fiscal year, adding he believed the process has been going well.

Last year, the School Aid Budget was passed at the end of June, with the rest of the budget being finalized in September.

“At the moment, the negotiation is more amongst subcommittees … but (there) hasn’t been as much discussion either with the State Budget Office or the House at this point,” Stamas said.

The Senate is set to begin voting on its slate of budget bills next week.

While the Senate carved out $2 billion (half one-time, half ongoing spending) for a potential tax cut deal with Gov. Gretchen Whitmer’s administration, the House in its recommendations left room for a $1 billion proposal. Whitmer has proposed smaller cuts that would cost about $800 million per year once phased in.

Stamas said Wednesday the idea behind carving out monies at the front end to dedicate toward a tax cut would ensure that appropriators do not place funding in the budget that would later have to be cut if a tax deal can be reached.

What specifically might be used as a vehicle for a tax cut is not yet known. Republicans have passed bills for cutting the personal income tax and suspending the gasoline tax only to have them vetoed by Whitmer. Democrats and the administration have urged more narrowly tailored cuts including to the Earned Income Tax Credit and for retirement taxes.

The May Consensus Revenue Estimating Conference is set for 9 a.m. May 20 in the House Appropriations Committee room. From there, the Legislature and administration will have a clearer picture on the monies it has to work with in finalizing a budget deal.

Sen. Curtis Hertel Jr. (D-East Lansing) told reporters the only two budgets that Democrats had supported this week in committee were those for higher education and community colleges. This was because of an agreement to provide 5% one-time and 5% ongoing increases in operations funding for universities and community colleges, matching the governor’s proposal.

“We have a number of concerns … we think that there are very important programs that help Michiganders that aren’t being looked at,” Hertel said.

A lack of funding for workforce training across the board is a significant concern, he said.

“There’s a dramatic reduction in funding for programs that help train Michiganders for the jobs of tomorrow and in our shortage areas,” Hertel said. “We need new teachers in the state. We need more nurses. We need more engineers.”

Hertel said the carveout by Republicans for a tax cut is why the numbers are “artificially low” and why he personally is “not treating this process as fully real at this point.”

He said the budgets from each chamber at this point are partisan, adding it is typical up to this point in the process. Hertel said he looks forward to getting down to business soon and having more serious bipartisan negotiations, pointing to the recent economic development and water infrastructure funding bills as examples of being able to work constructively.