Sept. 30, 2022 | This Week in Government: SOAR is the Big Winner as $1B Supplemental PassesSeptember 26, 2022
Each week, the Detroit Regional Chamber’s Government Relations team, in partnership with Gongwer, provides 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.
SOAR is the Big Winner as $1B Supplemental Passes
The Legislature passed more than $1 billion in supplemental spending bills on Tuesday, which will designate nearly $850 million in funds to the state’s Strategic Outreach and Attraction Reserve fund.
The bulk of the funding is contained in SB 844, which passed the House with a vote of 78-26 and passed the Senate with a vote of 25-8.
“I think it was important for us to set a tone of anticipation where we have allocated funds… for what may come. Happily, there’s been a lot of interest on the part of several developers related to location or expanding in Michigan,” Rep. Ben Frederick (R-Owosso) said Tuesday afternoon after the bills were passed by a conference committee. “There’s another focus on site development, which is an area of competitiveness that we’ve really been at a disadvantage compared to other states.”
It was another rapid-fire budget move, at least the portion done in public. The administration of Gov. Gretchen Whitmer this month had requested a relatively barebones $141 million supplemental while also hoping more money could be put into the new Strategic Outreach and Attraction Reserve fund. This one, however, also led to a rupture in the House Republican hierarchy. Rep. Thomas Albert (R-Lowell), the House Appropriations Committee chair who has been hesitant to make deals on these kinds of supplementals, decided he could no longer serve as Appropriations chair and stepped down (see separate story).
The bill contains $1 billion in supplemental spending, with $983.4 million from the General Fund. Of that funding, $846.1 million will go toward the Strategic Outreach and Attraction Reserve Fund, which exists to bring new investment projects into the state. The bill will add nearly $300 million to the fund and reauthorize $220 million. It will also include approximately $350 million for site prep, with $100 million of that earmarked for landfills.
The Legislature also approved SB 842, which contains $12.2 million in funding for school aid. The money will go toward a literacy tutoring program, a robotics program, and a scholarship fund for low-income students. It passed in the House by a vote of 78-26 and in the Senate by a vote of 33-0.
Senate Majority Leader Mike Shirkey (R-Clarklake) said the supplementals were important because they demonstrated where Michigan’s priorities are by supporting students and funding economic development.
“I want to send a strong message that Michigan’s serious about being competitive,” he said.
Although both bills passed by wide margins, they were not universally popular.
Albert announced his resignation as committee chair at a 9 a.m. meeting of the committee. He said that in the face of federal spending and inflation, the state should not be spending additional money.
“We are in a period of economic uncertainty I’ve not seen in a generation,” Albert said. “We should do what we can at the state level to fight inflation, not make it worse… this bill is akin to putting an addition onto a house when we should be boarding up the windows.”
Albert, who voted against the bills, called them “reckless and irresponsible to taxpayers.”
Rep. Yousef Rabhi (D-Ann Arbor) similarly spoke against the bill, saying that if it passed, representatives would be acting as reverse Robin Hoods, “taking from those who have so little to give to those who have so much.”
Rep. Steve Johnson (R-Wayland) also spoke against the bill, saying that representatives should remember they ran for office to help residents, not developers.
Also included in the supplemental is $20 million for a potential settlement payment related to the Bauserman v. Unemployment Insurance Agency case, in which the UIA wrongly accused 37,000 people of fraud in their benefits between 2013 and 2015 (see separate story).
There also was the now familiar array of projects sought by legislators.
Other items include $800,000 for Binder Park Zoo improvements; $15 million for grants to nonprofits providing housing for foster youth; $12 million for a grant to the city of Adrian to remove blight and fund river cleanup; $25 million for child caring institution rates for children receiving services, and $15 million for a Detroit Wayne Integrated health network psychiatric campus.
The bills will now be sent to Gov. Gretchen Whitmer‘s desk for her signature.
“I am proud that we have reached a bipartisan deal empowering Michigan to compete for huge economic development projects, support students pursuing higher education with scholarships, and increase funding for first responders,” Whitmer said in a statement. “This bipartisan package will help us attract transformational projects bringing billions in investment and creating thousands of jobs to Michigan, lower the cost of higher education for the vast majority of Michiganders and increase funding for law enforcement officer mental health. The supplemental is a testament to what we are capable of when we work together.”?
Jeff Donofrio, president and CEO of Business Leaders for Michigan, praised the legislative action.
“The governor and Legislature’s agreement to invest nearly $1 billion in business growth and job creation is a win for all Michiganders,” he said in a statement. “This legislation will help communities in every corner of our state develop shovel-ready sites primed for investments and will attract new jobs in growth industries, including EV and battery plants, semiconductor manufacturing facilities and research centers.”
The new chair of the House Appropriations Committee, Rep. Mary Whiteford (R-Casco Township), said it is crucial to keep building on the SOAR fund’s successes.
“It’s imperative that we continue these investments and remain competitive as other states like Tennessee work to attract employment opportunities from auto manufacturers,” she said. “This reserve ensures Michigan retains and attracts stable, well-paying jobs and sends a message to other states that we will fight to keep them here.”
Sen. Jim Stamas (R-Midland), the Senate Appropriations Committee chair, in something of a counter to Albert’s warnings about spending in the face of inflation, said this kind of economic development bill is critical for the state’s future.
“As our economy faces the challenges of high inflation, labor shortages and supply-chain issues, we must help our state remain competitive for long-term, high-wage jobs,” he said.
Supreme Court to Immediately Consider No Fault Case, Won’t Stay Ruling
The Michigan Supreme Court on Thursday granted immediate leave to appeal a ruling that the 45% pay cut to entities providing health care to those catastrophically injured in traffic crashes cannot be implemented retroactively. However, the high court declined to stay the decision as it moves through the process.
In Andary v. USAA Casualty Insurance Company (MSC Docket No. 164772), the Court of Appeals held the Legislature failed to clearly indicate that the law was to apply retroactively (See Gongwer Michigan Report, Aug. 25, 2022).
Insurance companies immediately appealed the decision, and the Supreme Court is now taking it up.
Insurers are also already pointing to the alleged fallout from the decision. Last week, the Michigan Catastrophic Claims Association increased the assessment on vehicles for the first time since the new law went into effect.
From July 1, 2023, to June 30, 2024, those with unlimited PIP coverage will pay $122, and all other PIP coverages will pay $48. Previously, those opting for lower PIP coverage paid no fee, and those with unlimited paid $122.
“If you pull the string on part of the medical fee schedule, the sweater unravels quickly,” Erin McDonough, executive director of the Insurance Alliance of Michigan, said in a statement. “Everyone who got $400 per-vehicle refunds this past spring are going to be sending $48 of it back to the MCCA because of the disruption caused by the Court of Appeals’ decision. Both before and after the 2019 reforms, insurers have remained liable to pay reasonable and medically necessary care for those injured in auto accidents in Michigan.”
The Michigan Chamber of Commerce said the ruling threatens to unravel hard-fought and long overdue reforms to Michigan’s broken auto insurance system.
“Michigan drivers and job providers with vehicle fleets from across the state received much-needed relief because of the widely-supported bipartisan auto insurance reforms [signed by Gov. Gretchen Whitmer] of 2019 after overpaying for auto insurance for decades,” Wendy Block, vice president of business advocacy and member engagement, said in a statement. “Michigan continues to be a more competitive and cost-effective state to afford auto insurance after years to holding the unenviable No. 1 spot for the highest in the country premium cost. That progress is in jeopardy after activist judges ignored legislative intent and the actual statutory language and substituted their own interpretation.”
The Michigan Brain Injury Provider Council called the court’s rejection of a stay a breath of hope for crash survivors.
“While this case is not yet settled, we hope the insurance industry will follow the law and allow care to be restored for people in need,” the group’s executive director Tom Judd said in a statement. “Furthermore, while an eventual ruling by the court to affirm the decision of the Court of Appeals will bring healing to people injured prior to the 2019 law, a legislative solution is needed for drivers catastrophically injured in a car crash after the enactment of the law, who paid for lifetime benefits of quality care.”
Barry Cargill, president and CEO of the Michigan HomeCare and Hospice Association, said in a statement that his group welcomes the decision by the Supreme Court to hear the appeal.
“This is a tremendous step forward. We believe the state Supreme Court will support the Michigan Court of Appeals. Unfortunately, the focus of the court is narrow and will only impact catastrophic auto crash survivors before the 2019 auto no-fault reforms,” he said. “The same unfairness exists for survivors injured after the 2019 reform. There are still people, approximately three per day, seriously injured in catastrophic auto accidents who have paid full personal protection coverage into the Michigan Catastrophic Claims Association their entire driving lives and will not receive care as part of the appellate court decision. The Michigan Legislature must act now to amend the law to set reasonable reimbursement for home care services. The fix is simple and not expensive.”
Albert Out as Approps. Chair Over ‘Reckless’ Spending Concerns
Rep. Thomas Albert on Wednesday abruptly resigned his post as chair of the House Appropriations Committee after a disagreement with leadership around a supplemental spending package that was sent to Gov. Gretchen Whitmer.
Albert (R-Lowell) weeks ago said he would not support a supplemental spending plan this fall as the state should hold onto the current $7 billion surplus in the event of an economic downturn.
House Speaker Jason Wentworth (R-Farwell) instead began negotiating a supplemental with Gov. Gretchen Whitmer‘s administration and Senate leadership.
On Wednesday, the disagreement apparently came to a head when Albert resigned from his post at the end of an Appropriations Committee meeting and came off the committee entirely.
“For a multitude of reasons, I am very opposed to the supplemental that is on the agenda for the House today. Chief among them is we are entering into a global recession. We have no idea how sharp this retraction will be. … I will be resigning as Appropriations chair,” Albert said during the committee. “It has been a pleasure to work with you all. We have achieved a lot. I am very proud of what we have achieved over this term. We have done a lot of good. It is time to have a chair who will be in line with leadership.”
Albert’s tenure as chair was, at times, a bumpy ride. As he came into the role in 2021, he first refused to negotiate the spending of coronavirus relief funding with the Whitmer administration. There were also reported sharp disagreements with Senate Appropriations Chair Sen. Jim Stamas (R-Midland).
Still, under his leadership, the House passed two budgets on time and the spending of unprecedented federal money sent to the state through COVID relief funds.
Rep. Mary Whiteford (R-Casco Township), the previous vice chair, will be chair for the remainder of the term.
Whiteford said she wants the state to be forward-thinking in its investments and make sure Michigan is at the forefront of economic development.
“I want my grandkids to be able to stay in our state to live and work,” she said. “And so, it is very important.”
Whiteford said if Albert is comfortable resigning from the post, then she supports him. She called him a great friend who has always supported her.
“And I’ve had his back as well,” she said.
Wentworth also praised Albert’s record.
“Thomas Albert did a great job as the chairman of our Appropriations Committee, and everything from your local park down the street to the entire state’s financial stability for decades to come is far better off because he served in this important role,” the speaker said in a statement. “Under Thomas’s leadership, we approved two state budgets that passed with broad bipartisan support, raised funding for schools and roads to the highest levels in state history without tax increases, and paid down billions of dollars in long-term debt that would have otherwise meant a bleak future for our children and grandchildren. It is an outstanding record.”
The speaker also said Whiteford has shown great leadership, “and has the experience we need to continue the SOAR oversight process, oversight of the state appropriations, and lead negotiations on any future spending we will consider this term.”
In a statement, Albert reiterated what he said during committee and described the supplemental spending package pursued by the Legislature as reckless and irresponsible to taxpayers.
“The wise thing to do is keep money on hand to ensure we can fulfill budget commitments already signed into law, and possibly return money to Michigan taxpayers struggling with inflation,” he said. “With all of the uncertainty in the economy today, we should not be making new spending commitments.”
With Whiteford as chair, Rep. Sue Allor (R-Wolverine) will be vice chair, and Rep. Roger Hauck (R-Mount Pleasant) will also join the committee to fill the vacancy left by Albert.
Big Turnaround Propelled $1B Supplemental, Whitmer Says
EAST LANSING – Gov. Gretchen Whitmer shed some light on the twists and turns that ultimately led to the deal between her and the Legislature on a $1 billion supplemental that lawmakers passed this week and now sits on her desk.
Whitmer and her administration were in negotiations with Republican legislative leaders on what would become SB 844, but GOP lawmakers had signaled some hesitancy about more spending.
It was not until Wednesday morning when Rep. Thomas Albert (R-Lowell), at the time the chair of the House Appropriations Committee, announced he was resigning from the committee out of opposition to the deal taking shape that it became clear a deal would happen before the Legislature wrapped up voting items prior to the November election.
“How we were feeling yesterday morning and how it all worked out toward the end of the day, I was pleased to see the progress that’s been made,” Whitmer told reporters. “We negotiated hard. We got a good result.”
The centerpiece of the bill is $846 million to the state’s Strategic Outreach and Attraction Reserve fund to help woo large economic development projects to Michigan. The bill also includes some priority projects for legislators and the expenditure of the last of the federal CARES Act funds that had to be appropriated by the end of the month or returns to the federal government.
Whitmer was asked about another supplemental before the end of the year with the state still sitting on billions of available revenue, though much of it is one-time in nature.
“I’ve proposed a number of things that I still am very interested in making sure that we make greater investments in. Individualized tutoring for every single child in Michigan is one aspect of where we could use resources that are one-time resources and make a difference to get our kids back on track,” she said. “I’m excited about where I think we can be headed. I can’t predict what kind of a lame-duck session we’re going to have. Obviously, what happens on Nov. 8th probably impacts people’s appetites and interests, but I think we still have some opportunity ahead.”
Legislature OKs Preprocessing, Election Security Bills
Local clerks will have two days to preprocess absentee ballots prior to election day along with additional election security measures under legislation agreed upon Wednesday and sent to Gov. Gretchen Whitmer‘s desk.
The two days of preprocessing would be an option for communities of at least 10,000 residents eligible to vote on the Sunday and Monday prior to an election.
In exchange, several provisions billed as security measures for absentee ballots were included in the final deal. These include requiring a chain of custody logs for ballots placed in drop boxes and the setting up of a process for regularly removing dead voters from the Qualified Voter File.
The final versions of the bill package were the product of recent negotiations between Whitmer’s administration, lawmakers, and local clerks.
These provisions would be implemented for the November general election.
Other provisions in the package, allowing for military members to vote electronically, would not take effect until the 2024 elections. An expansion of eligible polling locations would also not go into effect until future elections.
Members of both parties touted the package as being a reasonable, if overdue, compromise in floor speeches and in remarks to reporters.
Senate Elections Committee Chair Sen. Ruth Johnson (R-Groveland Township) prior to the Senate vote on HB 4491, praised the package and urged the support of members.”The legislation before us would remove the sunset to allow clerks to again use this tool to efficiently and securely process absentee ballots,” Johnson said. “The bill also adds integrity measures important to the people of Michigan.”
Passing the Senate 32-1 and 99-5 in the House, the S-1 substitute version of HB 4491 contains several of the key election security provisions that came out of the negotiations.
Under HB 6071, a city or township clerk could establish a polling place at any privately owned banquet or conference center, or recreation club. This would be allowed if other places, including a school or church, were not available or reasonable for use. The bill passed the Senate 33-0, and the House concurred in an S-1 substitute 97-7.
Under the H-1 version of SB 311, active-duty military members would be able to vote electronically beginning after Jan. 1, 2024.
The secretary of state would be required to promulgate rules to establish policies and procedures for the electronic voting by eligible service members.
Also passing was SB 8 by a 98-6 House vote, which also deals with the electronic returning of absentee ballots by servicemembers overseas. The Senate later granted immediate effect.
“Election integrity should not be a partisan issue. We can all agree that the people of Michigan must be able to vote freely and securely, and we all want our local clerks to have the tools they need to run smooth elections,” Rep. Ann Bollin (R-Brighton), chair of the House Elections and Ethics Committee, said on SB 8 prior to its passage in the House. “I’m glad the partisan policies have finally been set aside. These are common sense measures that are all broadly supported. They should have been signed into law two years ago. It’s unfortunate that election integrity has been twisted into such a partisan and polarizing issue, and then it took so long for everyone to come together.”
Secretary of State Jocelyn Benson, in a statement, called the package a positive step for obtaining timely election results and improving voting access for overseas military personnel.
“For years I’ve pressed lawmakers towards this progress, and I will continue to press them to expand these laws and enact the real change all Michiganders need,” Benson said. “Michigan voters deserve to get their election results on election night, just like the voters of Florida, Ohio and many other states that allow absentee ballot processing before Election Day. It remains to be seen whether an extra two days is sufficient to accomplish this goal, as data and best practices universally recommend at least seven days.”
Senate Majority Leader Mike Shirkey (R-Clarklake) was also pleased, telling reporters the deal will have “moved the needle in a very positive way.”
“The next Legislature can evaluate … if two days was adequate or not,” Shirkey said. “I think in the case of changing election laws, incremental progress is in order.”
Overall, he said he was very satisfied with the result of the negotiations on election security measures, calling it a strong step in the right direction.
“Just adding the phrase ‘chain of custody’ and making that part of our conversation? I think it was a great move forward,” Shirkey added.
As to whether the potential passage of Proposal 22-2 might upend any of the measures approved Wednesday, Shirkey said he was unsure.
Sen. Jeremy Moss (D-Southfield) called the package a step in the right direction, and he would support the package, but also took a shot at legislative Republicans.
“I don’t want here anyone here on Election Day this year to fill any voids with conspiracy theories when ballots are still being counted on election night, because we did not give clerks the same lead time that election administrators have in Florida and Ohio and Kentucky and Arkansas and states all across the country. We could go much, much further,” Moss said.
Chain of custody requirements for the collection of absentee ballots placed in drop boxes were included in HB 4491. Other requirements included: processes for removing dead voters from the QVF and how frequently it is to be done as elections draw nearer; maintaining information on who collects ballots from drop boxes; storage of absentee ballots; regular inspections of absentee ballot drop boxes; examination of absentee voter ballot secrecy envelope containers and maintaining as best as possible a balance in partisan affiliation of election inspectors at absentee ballot counting locations.
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