May 21 | This Week in Government: Outdoor COVID-19 Limits End June 1; Whitmer, GOP Leaders Reach Budget Deal
May 21, 2021- Outdoor COVID Limits End June 1; Indoor Limits Boosted to 50%
- Whitmer, GOP Leaders Reach Deal on Pandemic, Budget
- New Orleans Business Alliance Head Named MEDC CEO, to Start July 19
- SFA: Stimulus in Part Spurs Large Projected State Surpluses
- IRS Complaint Filed on Whitmer Nonprofit Over Flight
Outdoor COVID Limits End June 1; Indoor Limits Boosted to 50%
The end of state-imposed requirements and restrictions during the COVID-19 pandemic is now in sight, with Gov. Gretchen Whitmer announcing Thursday all outdoor limits will end June 1 and that all indoor venues will move to 50% capacity on that same date.
Virtually all limits are set to end July 1.
Department of Health and Human Services Director Elizabeth Hertel will issue the formal order Monday, Gov. Whitmer said at a news conference held in Midland at the city’s minor league baseball stadium. It was the first time since probably the State of the State address in January that Gov. Whitmer – now fully vaccinated against the coronavirus – appeared at a public event without a mask.
Gov. Whitmer also announced two significant changes for bars and restaurants. While they remain governed under a 50% capacity limit, as has been the case for a couple of months, the 11 p.m. curfew and 100-person cap on indoor dine-in capacity will end June 1.
The U.S. Centers for Disease Control and Prevention’s (CDC) revised guidance, issued two weeks ago, prompted Gov. Whitmer to ditch the “Vacc to Normal” plan she unveiled three weeks ago tying the reopening of the state to the percentage of people 16 and older receiving the first dose of their vaccine.
Gov. Whitmer said the “Vacc to Normal” plan had to “go vacc to the drawing board” after the CDC announcement that fully vaccinated people are safe, maskless, in virtually all activities and that outdoor activities are safe for the unvaccinated as well.
“The CDC kind of changed the landscape. It was a little bit of a surprise. Good news to be sure. But we had to recalibrate our plan, and that’s what I think you see,” she said. “We wanted to make sure that our policies mirrored the CDC’s recommendations.”
Still to be resolved: the Michigan Occupational Safety and Health Administration (MIOSHA) emergency and permanent workplace rules governing employer and employee requirements for in-person work. Those rules are substantially in conflict with existing and forthcoming DHHS orders. Gov. Whitmer said there would be more detail Monday on that front.
However, in the evening, Gov. Whitmer and legislative Republican leaders reached a framework regarding the budget and pandemic management that would mean MIOSHA withdraws the permanent rules (see separate story).
The end of outdoor limits means the Detroit Tigers, currently limited to 20% at Comerica Park, or about 8,000 fans, can fill theoretically fill the stadium this summer. The end of all limits, indoor and outdoor, means the state’s college football teams, as well as Detroit’s other professional teams can sell as many tickets as they can when their next seasons start (large indoor venues were limited to 750 people under the soon to end order).
Summer festivals, fairs, golf tournaments, and concerts will be able to go forward without restrictions.
The fairly strict limits that had been in place for indoor event spaces for items like weddings and conferences will now be replaced by a 50% capacity limit.
Nontribal casinos and gyms, limited under the soon-to-expire order at 30% of capacity, will move to 50%.
The idea behind the “Vacc to Normal” plan was to encourage more Michiganders to get vaccinated with more activities opening up as that happened.
As of Thursday, 57.1% of the state’s population 16 and older has received its first dose of the vaccine. Further reopenings were to occur when the state reached 60%, 65%, and then full reopening at 70%. There has been an emphasis on 70% as the number when the state is at or near herd immunity.
Asked how upending this plan for a date certain regardless of vaccination would affect vaccinations, Gov. Whitmer said she remains hopeful the state can get to 70%.
Affected industries mostly praised the announcement though there was some criticism that Michigan remains behind other states in lifting its COVID orders even with the schedule Gov. Whitmer announced.
Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association, said the group welcomes the clear guidance from the state “and takes solace in knowing that our advocacy on behalf of event and banquet centers will prevent the outright loss of another wedding, graduation, and conference season.”
Winslow said the state’s hospitality industry would now pivot to meet pent-up demand for dining and travel free of restrictions and helping restaurants, hotels, and resorts meet staffing needs.
“It would be a preventable tragedy if Michigan’s hospitality industry, which endured 159 days of closure and 16 months of occupancy restrictions, was rendered incapable of realizing its newfound opportunity because well-intended, but outdated policies discouraged a full return to the workforce,” he said in a statement. “Michigan’s labor participation rate ranks 42nd in the nation and as such we need bipartisan solutions to address this immediate threat to our hospitality revival.”
Brian Calley, president of the Small Business Association of Michigan, said Thursday’s announcement was an important step for small business owners.
“First, and more importantly, it gives a date certain when epidemic emergency orders will end,” he said in a statement. “Second, it makes near-term changes that will allow banquet halls, convention centers, and other indoor gathering facilities to start to ramp up operations in June. And finally, it will allow for many of the festivals, fairs, and other community events that make our state so special to commence this summer.”
Calley said SBAM looks forward to MIOSHA streamlining its temporary rules with CDC guidance and abandoning its proposal for permanent COVID-19 workplace rules.
The MIOSHA rules, which are substantial and intricate, were the subject of much of the reaction from business organizations anxious for the state to end those requirements. These statements were issued prior to the announcement the permanent rules would be withdrawn.
“The confusion among employers as to the contradictions between COVID-19 orders emanating from the MDHHS and MIOSHA needs to end now”, said Charlie Owens, state director of the National Federation of Independent Business Michigan chapter, in a statement. “We have been waiting for clear direction from the administration on this issue for too long”.
John Sellek, spokesperson for the Reopen Michigan Safely coalition of business organizations and others said Gov. Whitmer’s “teaser of reduced economic restrictions is welcome news but what job creators need is for the administration to immediately withdraw MIOSHA’s permanent COVID rules proposal, which our members formally requested yesterday. Emergency rules cannot become a permanent burden on our economic recovery.”
House Speaker Jason Wentworth (R-Farwell) offered perhaps his most positive appraisal of the year of a Whitmer administration decision on the pandemic, if still wrapped in criticism.
“I am glad there is finally a clear and growing consensus that Michigan can manage this pandemic and improve metrics across the board without taking away people’s paychecks, without holding children back for another year, and without cutting off critical state services,” he said in a statement. “Now we are even making progress undoing the damage of previous restrictions. Let’s keep it going and roll back all remaining limitations on Michigan families.”
Tori Sachs, executive director of the Michigan Freedom Fund, called for Gov. Whitmer to immediately rescind all emergency orders and rules.
“Vaccines are available to anyone over 16 who wants one and Michigan is ready to get back to work,” Sachs said in a statement. “Instead, Whitmer is clinging to lockdown rules that contradict science and devastate workers, families (and) schoolchildren.”
Whitmer, GOP Leaders Reach Deal on Pandemic, Budget
Gov. Gretchen Whitmer and Republican legislative leaders have reached an agreement on moving the state forward through its pandemic response and budget negotiations after months of bitter relations between the administration and the Legislature.
The agreement includes the Legislature having a seat at the table for future pandemic orders in statute and in addition to Thursday’s announcement speeding up the state’s removal of coronavirus restrictions, the permanent rules request from Michigan Occupational Safety and Health Administration will be rescinded.
In exchange for these changes, House and Senate Republicans agreed to make a show of good faith on one of the governor’s priorities. The administration’s budget negotiators will now be a part of the conversation between the House and Senate on the state budget.
Gov. Whitmer said the GOP agreed to fully negotiate the state budget and federal funding from the CARES Act and the American Rescue Act with the administration. She confirmed she agreed to withdraw the MIOSHA proposed permanent rules and to have a conversation about formalizing legislative input on epidemic orders.
“Today’s bipartisan framework shows how we can unite around investing in our schools, small businesses, and communities to help them thrive. I look forward to working with the Legislature to invest the billions in federal resources sent to us by both the Trump and Biden administrations and pass a budget that makes lasting investments in our shared priorities,” she said in a statement. “Throughout the pandemic, we saw Michiganders all over the state step up and come together to slow the spread of COVID-19 and save lives. Now, Michigan’s task is to unleash the potential of our people, to drive innovation and investment, and create tens of thousands of jobs and economic prosperity for all. Together, we can stay laser-focused on growing the economy and getting Michiganders back to work. Let’s hit the gas.”
House Speaker Jason Wentworth (R-Farwell) said the changes to the pandemic response were important not just to Republicans, but the people they represent.
“I’ve consistently said I believe the budget process is better with the governor involved, and the state’s pandemic management is better with the Legislature involved,” Wentworth said in a statement. “The critical issues facing our state are simply too big and are hurting too many people for us to waste any more time. The people we represent are tired of disagreement and just want results. This agreement is a good first step in getting us to that point.”
Senate Majority Leader Mike Shirkey (R-Clarklake) called Gov. Whitmer’s willingness to withdraw the MIOSHA rules a “good faith gesture.”
“These MIOSHA rules were a foolish political game that should have ended the minute the CDC updated its guidelines,” Shirkey said. “I see it as a positive for Michigan that with each passing day the governor draws closer to reason in her handling of COVID.”
In the statement, Shirkey also confirmed the Senate has agreed to allow Budget Director Dave Massaron into negotiations.
“I am excited to get to work and partner with my colleagues in the Legislature. I am confident we can work together to make sure we make the right investments and put a budget plan together that will enable Michigan to thrive in the future,” Massaron said in a statement.
The agreement comes on the eve of the Consensus Revenue Estimating Conference that will determine the amount of money the governor and Legislature have to work with as they finalize the 2021-22 fiscal year budget.
If it is a fully negotiated budget using the traditional process in June, it will be the most “normal” budget resolution since 2018.
New Orleans Business Alliance Head Named MEDC CEO, to Start July 19
Quentin Messer Jr., president and CEO of the New Orleans Business Alliance, will serve as the next CEO of the MEDC after its executive board unanimously appointed him to the role Tuesday.
He will begin in the role July 19. Until then, MEDC Executive Committee Chairman Awenate Cobbina and Vice Chairman Jeff Noel will continue to lead the organization, with Mr. Noel serving as the official CEO until then.
During a meeting Tuesday, Cobbina and Noel both praised Messer for his skill in the field of business, noting that even though he was not from Michigan he still embodied the qualities necessary of a leader looking to put the state on a path forward to a post-pandemic recovery.
“Despite not being from Michigan, he multiple times pointed to Louisiana and his understanding of the urban, suburban rural distinction and the needs of each of those groups from an economic development perspective – and, obviously, our status is similarly constituted,” Cobbina said, prior to the vote. “He stressed the importance of stakeholders, starting with the MEDC staff, and extending outwards to the board, local and regional economic development professionals, legislators, and the list goes on. He’s a strategic thinker, with a bold vision for Michigan, and someone who believes in the power of economic development.”
Noel added that what impressed him most about Messer was not only his ability to “think really, really big” but to also focus on policies that make life better for those benefiting from the MEDC.
“I think we’ve got a candidate who is coming in to do things in a way that’s really going to help set Michigan forward, but he’s going to do it in a way where everybody benefits in the state,” Noel said, of Messer. “And I think he’s also someone who was able to really create followers very, very quickly.”
Messer has served in his role at the New Orleans Business Alliance since 2015. With his leadership, the alliance became one of fewer than 90 economic development organizations to globally earn accreditation from the International Economic Development Council.
Prior to his work in New Orleans, Messer also served on the Louisiana Economic Recovery Taskforce in support of the Louisiana State Legislature’s COVID-19 relief efforts and was a member of the Reopening Task Force for New Orleans Public Schools. He has a Bachelor of Arts from Princeton School of Public and International Affairs, as well as a Juris Doctorate and Master of Business Administration from Columbia University’s Law and Business schools, respectively.
Messer will fill the role left vacant by former MEDC CEO Mark Burton, who left the position earlier this year.
Present at the meeting Tuesday, Messer told the board after his approval that he was serious in his interviews when stressing that his ultimate goal is to “build a championship Michigan economy for all Michiganders.”
“We’ve got to win the division – be the best economy of all the states that border the Great Lakes,” he said. “Then we’re going to go after Texas, Florida, Tennessee, North Carolina; then we’re going to take on Mexico, Canada, South Korea, and the world – because America is at her best when Michigan is at its best, and Michigan’s best hours are ahead of us.”
Shortly after the vote, Business Leaders for Michigan President and CEO Jeff Donofrio said in a statement that his organization looked forward to working Messer in his capacity at the MEDC to “help all businesses, people and communities in our state succeed.”
“MEDC’s work in the coming years will be critical to making sure Michigan recovers from economic downturn and wins jobs and investment in a post-COVID economy,” he said. “Quentin’s leadership in talent development and jobs growth is especially valuable at this juncture, as states across the country strategically invest their federal stimulus dollars, further challenging Michigan’s ability to become a Top Ten state.”
Gov. Gretchen Whitmer, too, praised the selection of Messer in a statement.
“We work hard every day to bring good jobs to Michigan and support strong communities across our state through the critical work of the MEDC. Quentin brings a wealth of experience to this role and a clear passion for ensuring the benefits of economic development extend to everyone,” she said. “These attributes will serve Michigan well as we continue to foster economic opportunity statewide and get people back to work. We are excited to welcome Quentin to Michigan to join the MEDC team and get to work for our people, communities, and businesses.”
SFA: Stimulus in Part Spurs Large Projected State Surpluses
A Wednesday report from Senate Fiscal Agency estimated significant year-end balances in the School Aid Fund and General Fund for the current and upcoming fiscal years, another sign of how tough it is for the state to predict revenues during the coronavirus pandemic.
In its economic outlook, the agency estimated for the current fiscal year 2020-21 there would be a $2.9 billion General Fund year-end balance and a $1.8 billion School Aid Fund year-end balance.
The agency’s comparison of the fiscal year 2021-22 General Fund and School Aid Fund estimate with the Senate’s appropriations bills it has passed, the agency projects a $2.9 billion year-end balance for the General Fund in fiscal year 2021-22 and a $2.3 billion year-end balance for the School Aid Fund.
The economic outlook comes ahead of Friday’s Consensus Revenue Estimating Conference, where SFA, the House Fiscal Agency, and the Department of Treasury will further flesh out final numbers for the current and future fiscal year. Currently, it does not appear Republican legislative leaders and the administration are negotiating on the budget or stimulus spending.
For combined General Fund and School Aid Fund revenues, the projected total is $2.2 billion above the January consensus revenue estimate.
The General Fund estimate for fiscal year 2020-21 is an increase of $1.086 billion and $1.11 billion for the School Aid Fund over the January consensus estimate. For fiscal year 2021-22 the estimate was an increase of $674.3 million in the General Fund and an increase of $597.2 million for the School Aid Fund over the January estimate.
The projected estimates for fiscal year 2021-22 show a slowdown in the increase of combined General Fund and School Aid Fund revenue, to $26.6 billion. This would be an estimated 0.5% increase over fiscal year 2020-21 and $1.3 billion more than the January 2021 revenue estimate.
In fiscal year 2021-22, General Fund revenues are estimated to be $11.6 billion, an increase of 2.2 percent over fiscal year 2020-21. The School Aid Fund is estimated to be at $15 billion for fiscal year 2021-22, a decrease of 0.8% from fiscal year 2020-21. The reasons for the decline in School Aid Fund include slower growth in housing and vehicle markets as well as a reduction in sales and use tax revenues due a reduction in federal stimulus.
Total School Aid Fund revenue for the current 2020-21 fiscal year of $15.1 billion, an increase of 8.2% over the previous fiscal year. The increase was attributed to a combination of federal COVID-19 stimulus, state and federal policy changes, and increased revenue from online sales.
For the General Fund, the total revenue for fiscal year 2020-21 was estimated at $11.3 billion, or an increase of 5.1% from the previous fiscal year. The reasons given were federal COVID-19 stimulus offsetting larger earmarks from individual income tax revenue to the Michigan Transportation Fund.
SFA Director Chris Harkins, in a response to questions by Gongwer News Service as to the source of the increased estimate, said the January estimate pre-dated the passage of the federal American Rescue Plan, adding some of the fiscal year 2020-21 increase is attributed to this stimulus package.
“While … a lot of the spending in that package is direct pandemic aid or spending for federal programming, which does not directly impact the state revenue, the state is seeing some of that direct aid returned in the form of consumption,” Harkins said. “However, with this latest round of stimulus exhausted as we move into FY 2021-22, we forecast future employment gains to be muted. So, we forecast that while the general trend is positive there has been a larger impact in FY 2020-21 which we relate to stimulus.”
Highlighting the impact of federal stimulus dollars, SFA wrote in its report personal income grew 7.4% in 2020 – the strongest growth since 1994. Moving into 2020, economic recovery, combined with additional federal stimulus, is estimated to result in personal income growing 2.6% in 2021 before declining 1.5% in 2022 with stimulus funds exhausted.
While payroll employment is still down 7.2% in the state compared to February 2020, the rapid recovery in motor vehicle sales at the national level has helped Michigan’s employment levels recover more rapidly than any other states, SFA said. Michigan’s employment rose at a 1.8% annual rate between April 2020 and March 2021.
Michigan’s disproportionately strong participation in a variety of federal stimulus programs, such as the federal workshare program, also helped reduce COVID-19-related losses to personal income in Michigan and thus helped maintain consumption and employment at higher levels than would have otherwise occurred, SFA said in its report.
In the coming years, both Michigan and the national economy are expected to exhibit a “reasonably strong recovery,” with Michigan generally expected to see growth at a slightly slower rate than nationally.
IRS Complaint Filed on Whitmer Nonprofit Over Flight
Michigan Rising Action, a Republican super PAC, filed a complaint Wednesday with the IRS asking it to investigate a 501(c)4 fund controlled by Gov. Gretchen Whitmer to determine whether her use of it to pay for a $27,500 charter flight on a private jet to visit her ailing father violated the Internal Revenue Code.
The tax-exempt fund, Michigan Transition 2019 doing business as Executive Office Account, states its purpose is to “operate for the promotion of civic action and social welfare by promoting the common good and general welfare of the residents of, and visitors to, the state of Michigan.”
The complaint says the Governor’s personal trip to visit her father in Florida is not within the exempt purpose of the fund and that the organization’s payment for the flight was a private benefit to Gov. Whitmer.
“We encourage you to investigate whether Michigan Transition 2019 has violated the Internal Revenue Code, and if so, to take appropriate action, including the assessment of any appropriate penalties,” the complaint says.
Whitmer Chief of Staff JoAnne Huls has said the fund operated within the law. Chris Trebilcock, an attorney to whom the Governor’s office has referred questions about the fund, has said the same.
A message left with Trebilcock today about the complaint was not returned.
“Gov. Whitmer’s use of 501(c)(4) funds for personal benefit is a clear violation of the law and we’ve asked the IRS to launch a full investigation into the matter,” Eric Ventimiglia, executive director of Michigan Rising Action, said in a statement. “From her blatant hypocrisy to the litany of ethical and legal violations, Governor Whitmer has spent the last two months misleading the people of Michigan about her trip to Florida. It’s time for her to be held accountable.”
An IRS investigation, if it occurs, could have limited impact. They are generally done in secret with results not made public.
Further, ProPublica reported in 2019 that as of then the IRS had not stripped a single organization of its tax-exempt status for breaking spending rules since 2015.
However, the complaint also accuses the fund’s payment of the flight as being a “private benefit,” which could draw more interest from the IRS. In 2020, The Nonprofit Times reported that that the IRS planned a focus on unlawful private benefit starting in 2020.