Detroit Regional Chamber > Advocacy > Oct. 1 | This Week in Government: Gov. Signs Budget; Debate Begins Over Good Jobs for Michigan-Style Incentive

Oct. 1 | This Week in Government: Gov. Signs Budget; Debate Begins Over Good Jobs for Michigan-Style Incentive

October 1, 2021
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. Whitmer, Hailing Bipartisanship, Signs Budget With Smattering of Vetoes
  2. Debate Begins Over Proposed Good Jobs for Michigan-Style Incentive
  3. Group Rallies for No-Fault Fee Fix, Shirkey Said ‘Tweaks’ May Be Possible
  4. Harkins Praised as New Budget Director; Dale Succeeds Stibitz at DTMB
  5. Petition Would Award MI Electoral Votes to National Popular Vote Winner

Whitmer, Hailing Bipartisanship, Signs Budget With Smattering of Vetoes

DELTA TOWNSHIP – An ebullient Gov. Gretchen Whitmer signed the 2021-22 fiscal year budget Wednesday, a bipartisan agreement with substantial increases in spending in several programs.

“In the midst of a pandemic, in the midst of a recession that accompanied it, flooding events, divisive elections, conversations around race in America, plots on top of all that, we got a great budget done, and it is a big deal,” Gov. Whitmer said at a signing ceremony on the western campus of Lansing Community College. “I’m most proud of how we got it done. A Democratic governor with a Republican-led Legislature finding common ground in the midst of so much tough stuff that we’re all confronting. This budget really is a testament to what we are capable of when we put the needs of the people of our state first and foremost. This budget shows that divided government doesn’t have to be dysfunctional government.”

Gov. Whitmer did line-item veto a little more than $15 million that Republicans had added to promote alternatives to abortion in the Department of Health and Human Services budget.

The Governor also declared dozens of sections of budget boilerplate within SB 82 (PA 87, immediate effect) and HB 4400 (PA 86, immediate effect) unconstitutional and unenforceable or moot for other legal reasons.

Gov. Whitmer already had declared she will not enforce language in the DHHS budget stripping local health departments of state aid if they have an emergency health order in place without the assent of their county board of commissioners. The Governor also declared that language in the higher education budget directing the state’s public universities with COVID-19 vaccine mandates to offer exemptions was unconstitutional under the autonomy clause for public universities.

Amid the excitement about getting a budget in place, there’s still billions in state and federal funds available to spend that will immediately bring the Whitmer administration and the Legislature back to the budget.

One of the first orders of business will be for Gov. Whitmer to name a new budget director. Outgoing Budget Director Dave Massaron has said he is leaving his post for a job at Wayne State University upon completion of the state budget.

“We’ve got more work yet to do. Let’s celebrate this moment and be pleased with the great work that is done but we must continue working with the additional American Rescue Plan dollars that we are so fortunate to have because our task ahead is still important and we’ve got to keep working toward finding that additional common ground,” Gov. Whitmer said.

No legislators were present with it being a session day, but Gov. Whitmer said they did gather privately to celebrate the occasion.

The major emphasis for Gov. Whitmer as she signed the budget was on the money for tuition-free learning through the Michigan Reconnect, Futures for Frontliners, and Going Pro programs.

Gov. Whitmer said she line-item vetoed the funding for promoting alternatives to abortion because she will “stand in the way of any efforts to strip away fundamental rights from women or get in the way of doctors’ ability to do their jobs.” The language would have created a “gag rule preventing reproductive health service providers from even mentioning abortion,” she said in a letter to the Legislature.

Among the vetoed funds were $3 million for a maternal navigator pilot program and $10 million for marketing to promote adoption as an alternative to abortion.

The Governor’s veto was hailed by Planned Parenthood Advocates of Michigan.

“In vetoing the blatantly anti-abortion provisions inserted by legislative Republicans, Governor Whitmer put people before politics and demonstrated her commitment to protecting access to safe, legal abortion in Michigan,” Nicole Wells Stallworth, Planned Parenthood Advocates of Michigan executive director, said in a statement. “Everyone deserves to make their own medical decisions free from interference from certain politicians. We are grateful to the governor for once again standing strong for Michiganders and keeping medical decisions between patients and their doctors.”

Right to Life of Michigan and the Michigan Catholic Conference slammed the veto.

“We are very disappointed that Governor Whitmer does not see the value of funding these life-affirming programs. Governor Whitmer has supported pregnancy help programs for students as a state representative, but now, as governor, rejects these efforts to aid mothers in carrying their children to term and getting the help that they deserve,” Right to Life of Michigan President Barbara Listing said in a statement. “Among the funds that were vetoed, advertising for infant adoption was one that speaks to her strong conviction that she would rather have an abortion performed than an adoption completed.”

Gov. Whitmer also declared about 60 sections of boilerplate unenforceable, largely because they conflict with the constitutional separation of powers. Among the rejected sections were staffing requirements in the Department of State Police, directives on how to conduct bidding for vendors, and a slew of reports to the Legislature.

Despite the disagreement on the abortion funding, the signing of the budget was largely met with celebration from stakeholders.

Sen. Jim Stamas (R-Midland), chair of the Senate Appropriations Committee, said the budget’s investments in higher education, community colleges, child care, local bridges, direct care workers, and more will help the state.

“We worked hard to finalize a responsible and effective state budget focused on protecting our families, supporting workers, educating our children, and helping our economy recover from the effects of the pandemic and government shutdowns,” he said in a statement. “I want to thank the governor and her team for their cooperation on this budget and hope that it is the framework for future bipartisan achievements to improve our state and the lives of the Michigan people.”

Rep. Thomas Albert (R-Lowell), the House Appropriations Committee chair, had mostly positive things to say about the agreement.

“In a time where political power is divided within state government, we came together and accomplished a lot of good with this budget,” he said in a statement. “We helped ensure the budget is fiscally responsible and sustainable – paying back $150 million into the unemployment trust fund to restore money lost through fraudulent claims, restoring $500 million to the state’s rainy day fund, and keeping billions of dollars on the balance sheet as we move forward. We invest in workforce development, assist communities still reeling from the economic fallout of the pandemic, and support child care, law enforcement, environmental cleanup, and many other essential services.”

Albert said, though, that language preventing the state and local governments from mandating vaccines as a condition for receiving government services or employment is enforceable, contrary to Gov. Whitmer saying the language will not take effect. Further, he said while universities have autonomy, it is not limitless.

“These student protections do not violate the constitution in any way. The Legislature has the power of the purse and, within constitutional bounds, has broad discretion to make its appropriations conditional,” he said.

Further, Albert said while the budget is excellent overall and the Legislature and Whitmer administration “generally worked well together,” he was saddened though not surprised by Gov. Whitmer’s line-item vetoes and declarations of unenforceability on mask mandates from local health officers.

One of the questions going into the future is whether increases, like the 5 percent one for public universities, can be sustained into the 2022-23 fiscal year budget. That increase was labeled one-time in the 2021-22 fiscal year budget.

While all budgets are legally “one-time” and expire at the end of the fiscal year with no guarantee of how each line item will be funded in the future, for the past decade, stakeholders have hoped to see increases labeled ongoing as opposed to one-time to provide some certainty.

“I think it’s important for all of us to acknowledge that in this moment we’ve got the chance to lay the groundwork and create a real path for opportunity,” Gov. Whitmer said when asked about the sustainability of the increases. “We are working with a lot of resources that are one-time in nature. I think every university understands how precarious all the discussions were. They also understand where these resources are coming from and that it’s not baked in as we moved forward. That being said, I think higher ed is an important investment that we make as a state so that we can keep it affordable for Michigan students and continue to lead the world when it comes to having phenomenal community colleges and higher education.”

Related: Gov. Whitmer Signs FY 2022 Budget With Significant Chamber and MICHauto Priorities

Debate Begins Over Proposed Good Jobs for Michigan-Style Incentive

Legislation that would create a program similar to the lapsed Good Jobs for Michigan business incentive program was heard by a Senate panel, with supporters calling it a way to stimulate job growth while opponents derided it as a handout to large businesses.

Sen. Ken Horn (R-Frankenmuth) told the Senate Economic and Small Business Development Committee that his bills, SB 615, and SB 623, build off the Good Jobs for Michigan program. He said during the program’s existence from 2017-19, it had spurred more than $6 billion in private investment and created several thousand jobs.

“We are just simply looking to create good jobs,” Horn said.

Under SB 615, additions would be made to the Strategic Fund Act to create a Michigan Employment Opportunity Program to allow for tax capture credits to authorized businesses creating certifiable numbers of new jobs in the state.

Eligible businesses would be able to apply to the Michigan Strategic Fund to enter into agreements authorizing payment of withholding tax capture revenue. A sunset for entering new agreements would be set for Dec. 31, 2026.

Criteria for entering into agreements would include eligible businesses having proposed to create and retain certain numbers of certified new jobs within the state where workers would be making certain annual wages. The withholding tax capture revenue would be capped at five or 10 years, depending on the date of the certified job creation.

The bill also would create a three-tiered system for eligible businesses.

In the top tier, businesses would have to create a minimum of either 3,000 or 500 certified new jobs with an average annual wage equal or greater than the prosperity region average wage or a minimum of 250 certified jobs with an average annual wage equal to 125% or more of the prosperity region average wage.

In the second tier, businesses would have to create a minimum of either 500 or 250 certified new jobs with an average annual wage equal or greater than the prosperity region average wage or a minimum of 100 certified jobs with an average annual wage of at least 125% percent of the prosperity region average wage.

For the final tier, businesses would have to create either a minimum of either 250 or 100 certified new jobs with an average annual wage equal or greater than the prosperity region average wage or a minimum of 50 jobs with an average annual wage of at least 125% of the prosperity region average wage.

Horn said the tiers would address different sized communities across the state and the different wage levels in different regions.

A cap of $300 million would be set under SB 615 as well as capping the number of agreements the Michigan Strategic Fund could enter each year at 40. An Employment Opportunity Fund would be created with the Department of Treasury.

A second bill, SB 623, would require an amount equal to the withholding tax capture revenue attributable to certified new jobs due to be paid to authorized businesses be placed in the Employment Opportunity Fund each fiscal year.

“Wherever those jobs have a transformational impact on a small community, we want those jobs,” Horn said.

Detroit Regional Partnership CEO Maureen Krauss agreed with Horn. “It gives us a tool we desperately need in order to win jobs throughout the state,” Krauss said. “The scaling is really important … and part of why we feel this is a really strong incentive.”

Mike Johnson with the Michigan Manufacturers Association said he believed much is at stake to ensure workers remain in or are attracted to the state.

“Michigan must be an active player in the battle for future growth,” Johnson said. “Not playing that games results in a self-determined loss.”

Michael LaFaive with the Mackinac Center for Public Policy opposed the proposal, saying it is nothing more than a rehash of Good Jobs for Michigan. He cited studies he said show economic development incentives have little impact and are expensive.

“State incentive programs fail to deliver,” LaFaive said. “Simply providing special favors to connected companies is ineffective and expensive and an unfair strategy for creating jobs and growing our economy.”

Center for Economic Accountability President John Mozena, who opposed the bill, said subsidies such as those outlined in the bills tend not to deliver on their promises.

“They create an additional incentive for municipalities to promise away money that they should be using for something else,” Mozena said. “By dragging Michigan deeper into the never-ending subsidy race between the states, you’re also encouraging competition (between) Michigan’s municipalities.”

He pointed to examples of Detroit spending more to acquire land for the proposed Fiat Chrysler Automobiles expansion in the city than for its health department and Grand Rapids having an economic development programs budget larger than its fire department.

Group Rallies for No-Fault Fee Fix, Shirkey Said ‘Tweaks’ May Be Possible

Providers and crash survivors gathered Tuesday morning at the Capitol to call on lawmakers to amend the state’s no-fault auto insurance law, raising concerns about the fee schedule and provider rate cut that groups have said is causing survivors to lose access to needed care.

Senate Majority Leader Mike Shirkey (R-Clarklake), in brief remarks to reporters later Tuesday, said data is being collected and there may be a need for some adjustments to the law at some point.

“I have said from the beginning that we weren’t going to make any changes until we actually have real data, and not speculation,” Shirkey said. “And now we’re beginning to get some data that indicates there may be another tweak or two required, and it’s not been fully defined yet and we’re continuing to collect data.”

Shirkey gave no timetable or specifics on what any changes may end up looking like.

Provider groups that say the changes could put them out of business as well as automobile crash survivors who say they are losing services or seeing drastic cuts in care argue time is critical. Those rallying Tuesday outside of both legislative chambers inside the Capitol said a fix is needed immediately.

Amber Marcy of Saugatuck, who was injured in a crash 25 years ago at age 15, said she was on hand to represent fellow survivors.

“There’s things that are being slowly ripped away from us that I don’t even think they know within the past … two months,” Marcy said.

She said her physical therapy has been discontinued since her home care company has not seen payment after the bill went into effect.

“It’s been a lot of anxiety, a lot of fear, these past couple months,” Marcy said.

Brenden Monroe with FirstLight Home Care in Grand Rapids said the law “was put through without dotting the I’s and crossing all the T’s and it’s affecting people’s lives.”

Monroe said there is no time to wait for a permanent fix, as thousands who are critically injured are losing their care.

“I don’t think that there’s enough attention being brought to that, not only the reduction of services that accident survivors are entitled to but also the power shift into the insurance companies,” he said.

Monroe said thousands of injured persons are at risk of going from a solid quality of life with their existing care to potentially winding up in nursing homes or flooding emergency rooms for care. He said it is not overstated to say that people could end up practically dying in the streets if the auto insurance legislation is not amended to address the concerns.

He added care providers such as his company are holding on but, with current reimbursement rates, that might not last.

Earlier this year, the Legislature passed, and the governor signed, a bill that provided $25 million for auto insurance patients receiving post-acute injury care from providers. This was considered to be a short-term bridge by supporters to work on a long-term fix.

Groups have been urging lawmakers to make changes to the auto insurance law, including the provision involving attendant care provided in an injured person’s home where currently the insurer is only required to pay up to 56 hours per week if the care is provided by an individual related to the injured person, domiciled in the household of the injured person or with whom the injured person had a business or social relationship with prior to the injury.

The provision went into effect July 1. For attendant care hours beyond the 56 weekly, the injured person may be able to enter a contract with their insurer for additional hours of family-attended care or for it to be provided by someone else.

The law also capped reimbursement for providers of acute care at 55%. Groups urging changes to the law have said reimbursement cap is causing crash survivors to lose their care.

Multiple senators could be seen speaking with rally participants Tuesday morning outside the chamber while the Senate was in recess.

Harkins Praised as New Budget Director; Dale Succeeds Stibitz at DTMB

Gov. Gretchen Whitmer’s choice of longtime state budget expert Chris Harkins as her administration’s new budget director prompted something rare in politics today – a bipartisan ovation.

Harkins replaces Dave Massaron, who earlier announced he would depart for a post at Wayne State University upon completion of the 2021-22 fiscal year budget, which occurred Wednesday.

The director of the Senate Fiscal Agency has come up through the ranks in the state’s budget infrastructure – almost two years in the State Budget Office during the Snyder administration, two years as the Department of Technology, Management and Budget’s legislative liaison, and 10 years on legislative staff, including four as state budget coordinator for the House Republican Caucus.

Well-liked by those in both parties, Harkins comes out of the Republican ranks at a time when the Democratic governor continues to need to work with the Republican-led Legislature on disposition of billions in state and federal revenues expected to be appropriated in the coming months. Harkins is a Republican whose appointment as SFA director was contingent on support from the Senate GOP majority, though he is anything but a hard-core partisan and has a nonpartisan image around the Capitol.

“It is an honor to serve my State in this capacity and I want to thank Governor Whitmer for the opportunity,” Harkins said in a statement. “Budgets are the embodiment of the priorities of our citizenry, and I look forward to putting my state budget experience to work to once again find common ground with the Legislature as we create another strong budget for next year.”

Whitmer announced other changes in her administration, appointing Assistant Attorney General Julia Dale, a 20-year veteran of state government who previously led various divisions at the Department of Licensing and Regulatory Affairs, as the new director of the Department of Technology, Management and Budget. She succeeds Brom Stibitz, who was named director in 2020. He had been the chief information officer during the administration of Governor Rick Snyder and was promoted to director after Gov. Whitmer’s first DTMB director, Trish Foster, was appointed chief operating officer in the executive office.

Senate Republicans did not comment on Harkins’ departure. There was no immediate word on a successor as SFA director.

Rep. Thomas Albert (R-Lowell), the House Appropriations Committee chair, praised the choice.

“I’m glad to hear Chris was named,” he said. “He seems like a really smart guy who knows a lot about the budget. I’m looking forward to working with him. … He’s just very knowledgeable. The budget is a beast. He knows the nuts and bolts of it.”

Longtime Republican consultants and staffers lauded the appointment as a coup for Gov. Whitmer. Democrats also praised the move as wise, considering the need to have someone who can work well with Republican lawmakers on the budget, something Harkins has done his entire career.

Gov. Whitmer also announced some changes within the Executive Office. Poppy Sias-Hernandez will continue as the state’s chief equity and inclusion officer while also becoming executive director of Global Michigan. Maria Martinez, former deputy legal counsel to the governor, was named chief compliance officer.

Marc Rehmann was named policy director. He most recently was deputy chief of staff to U.S. Rep. Diana DeGette (D-Colorado).

“The State of Michigan will benefit from all of today’s appointments, and I look forward to working with this talented group of people to put Michiganders first and get things done,” Gov. Whitmer said in a statement. “We have an unprecedented opportunity right now to usher in a new era of prosperity for our state, and I am proud to have a skilled, experienced team by my side as we work together to deliver real change on the kitchen-table fundamental issues that make a difference in people’s lives.”

Subscribers Please Note: A News Update sent this morning contained inaccurate information regarding the appointment of a new Unemployment Insurance Agency director.

Petition Would Award MI Electoral Votes to National Popular Vote Winner

Whoever wins the national popular vote in a presidential election would also receive Michigan’s Electoral College votes under a bipartisan ballot initiative announced Monday, the leaders of which say they hope to have the petition language available as soon as tomorrow.

The Yes on National Popular Vote campaign seeks to align the electoral and popular vote process so that there is no discrepancy between the two. A handful of times in U.S. history, most recently in 2000 and 2016, the winner of the national popular vote lost the Electoral College vote and the presidency.

Besides the 2000 and 2016 scenarios, there’s the frustration that presidential candidates and campaigns tend to focus their energies solely on battleground states, leaving huge swaths of the country, states that reliably vote Democratic or Republican, ignored.

The Electoral College is enshrined in the U.S. Constitution, making it incredibly difficult to alter, so the proposal is a national effort to alter each state’s laws on how electoral votes are awarded. Forty-eight states – including Michigan – use a winner-take-all system, with the remaining two using a congressional district plan.

Saul Anuzis, former Michigan Republican Party chair, and former Michigan Democratic Party Chair Mark Brewer, are backing the petition effort and, speaking to reporters via Zoom, characterized the effort as long overdue.

“For years, I’ve been advocating on this issue, and I’ve been outspoken in on my belief that the national popular vote is urgently needed to restore faith and stability in our electoral process,” Anuzis said, adding that the effort “transcends the traditional partisan politics.”

If enacted, Michigan would become the 16th state to use this distribution method of Electoral College votes. The District of Columbia has also signed on to the national effort, meaning that 195 electoral votes currently align with this distribution method. Should Michigan join on – with its current 15 electoral votes, pending the loss of a congressional seat due to population decline – that number would total 210.

A total of 270 Electoral College votes are needed to win the presidency. The compact among the states to award their electoral votes to the national popular vote winner regardless of the popular vote winner in their state would take effect once the electoral votes of the states joining the compact equal at least 270.

Brewer emphasized that since the creation of the Electoral College, five different presidents had lost the popular vote but still won the presidency due to the way electors were divvied up. Those former presidents are John Quincy Adams in 1824, Rutherford B. Hayes in 1876, Benjamin Harrison in 1888, George W. Bush in 2000 and Donald Trump in 2016.

“The current, broken presidential election system causes division, mistrust – it leads to needless recounts and endless litigation and bad feelings all around,” Brewer said. “And the candidate with the most votes doesn’t always win the election. … Democracy means that every vote should count equally, and the candidate with the most votes should be elected president.”

Asked why Republicans – who in contemporary history have benefitted from this system – would support such a change, Anuzis said he could think of “absolutely no reason that Republicans ought to look at this as a negative.”

“We haven’t talked to anybody specifically on the petition initiative itself, but I can tell you that there’s a large number of Republicans in both the House and the Senate that have openly co-sponsored this bill – voted for this bill – in the past, and have supported this bill publicly,” he said. “So, I do think there’s bipartisan support.”

In the last eight presidential elections going back to 1992, the Republican nominee has won the national popular vote once, in 2004.

Brewer said despite Michigan typically enjoying extra attention as a battleground state, that’s not always the case. Anuzis gave the example of 2008 Republican presidential candidate John McCain, who decided to stop campaigning in Michigan after polling suggested former President Barack Obama would win it handily.

As a result, McCain pulled out of the state and significantly affected down-ballot Republican candidates who stood to benefit from the McCain campaign staying in Michigan.

The two also repeatedly reiterated that the change, if enacted, would not at all serve to make Michigan weaker in terms of General Election importance. It would also, they maintained, not give a larger sway to states with huge populations like California or Texas and instead would put every state on a level playing field in terms of having an individual vote count toward presidential selection.

“This is a great example of federalism at work,” Brewer said. “This has been done on a state-by-state basis. We’re not replacing or getting rid of the Electoral College, but we’re doing … what the founders said: that the states should make these decisions. And this is an interstate agreement among the states to move to this system in which every vote will count.”

Even with Anuzis’ belief that Republicans would be welcoming of the move, it didn’t take long for some conservative groups to issue statements regarding their displeasure over the initiative.

“The ‘National Popular Vote’ would immediately disenfranchise every single Michigan voter and silence working-class Americans across the nation,” Michigan Freedom Fund Executive Director Tori Sachs said in a statement. “This disastrous proposal would make issues voters care about irrelevant while centering political power and decision-making in the nation’s biggest cities where liberal elites have assembled en masse. … Liberals are obsessed with forcing Americans to conform to their radical agenda, and this is just another attempt to do just that by using large states like California and New York to impose their will on the rest of the country – in this case, a Democrat president.”