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Things to Watch As Legislative Action Winds Down

With the traditional pre-election recess days away, here are a few items to keep an eye on before state legislators leave Lansing and hit the campaign trail until after the November election.

Budget expected to fund workforce development while holding Schools, Governments Harmless
It has been reported the Whitmer administration and Legislature have reached agreement on the fundamentals of a state budget in advance of the start of the new fiscal year on Oct. 1, and notably, it is believed to hold schools and local government harmless from the cuts many expected.

Two workforce development programs, Michigan Reconnect and the Going PRO in Michigan program are expected to receive nearly $60 million next year. Both programs would make strides to close the talent gap through training in classrooms and on the job, last-dollar financial aid, or via apprenticeship programs. Last year, funding through Going PRO alone allowed 849 employers to train 5,909 new hires and 18,900 current employees. Reconnect, modeled after a bipartisan-approved program in Tennessee, increased college enrollment for students 25 or older seeking an associate degree or certificate by nearly 10%. The inclusion of both of these programs is the result of advocacy work of the Chamber and a coalition of similar organizations throughout the state.

Why This Matters
The recession caused by COVID-19 is expected to have a ripple effect on talent and workforce development for years. It also threatens to exacerbate the problems of a municipal funding system bogged down by unfunded liabilities where insolvency for many governments is a legitimate concern.

Avoiding significant cuts to schools and many local governments while maintaining priorities for workforce development in this next budget would be a key step toward filling the thousands of jobs at companies of all sizes, in all industries, including automotive and next-generation mobility. Bridging this talent gap is vital to Michigan’s economic future, given the projected workforce gap of more than 500,000 by 2026. Economic growth is ultimately driven by a skilled, motivated, and supported workforce, and investing in this program will pay major talent dividends.

Further Discussion on PPE Tax Relief Package for Businesses
This Chamber-led legislation would exempt PPE purchases from sales and use taxes, something that already occurs only for industrial processors. It would also provide a refundable income tax credit to employers who can use the credit to bring back and grow jobs going into 2021.

Why This Matters
Businesses that can reopen safely should not be punished for simply doing what is needed to stay open. The legislation helps reduce the costs of PPE that no business could have predicted before the pandemic. This helps businesses stay open by making their already courageous efforts to mitigate the spread of COVID-19 more affordable.

COVID-19 Liability Protections
As the Chamber has previously testified, this legislative package helps protect employers from litigation when they make good-faith efforts to reopen and operate safely amid the pandemic. This package is scheduled to be approved by the House this week.

Why This Matters
The pandemic has pushed many businesses to the brink and forced many to close. Businesses that take reasonable steps to follow public health guidelines should be protected against COVID-19 liabilities and the Legislature has the power to offer them these protections.

House Bill 6233 and Electric Vehicles Sales
It is illegal for automakers to sell new vehicles directly to consumers in Michigan although Tesla reached an agreement earlier this year with the attorney general to allow delivery within this state. This legislation proposes changes that would formalize what only Tesla could do in the state by impacting dealerships and service charges while also effectively limiting competitors in the electric vehicle space.

Why This Matters
While these bills would ultimately impact how electric vehicle startups will compete in Michigan, they pose significant ramifications for existing OEMs and auto dealers alike. Whether or not sales models need to be created or adjusted as electric vehicles disrupt the market is worthy of discussion, but any legislation must also take into account all ramifications and need to be thoroughly vetted by global automotive leaders already based in Detroit.