Jan. 20, 2023 | This Week in Government: Senate Moves Book-Closing Supplementals Over GOP Objections

A divided Senate voted along party lines Wednesday to pass two supplemental appropriations bills in the chamber’s first legislation passed under the new Democratic majority.

Republicans, prior to the vote on the supplemental appropriations for the 2021-22 and 2022-23 fiscal years, accused Democrats of ramming through the book-closing legislation without any hearings or negotiations.

To this, Democrats said their GOP counterparts had left a traditional year-end book-closing supplemental unfinished last term, and Wednesday’s votes were to remedy that situation.

SB 7 and SB 8 passed 20-17, with Sen. Ed McBroom (R-Vulcan) absent from the vote. The first bill covers various state agencies and departments for the two fiscal years, with the latter covering school aid. Total spending within SB 7 for the fiscal year 2021-22 is $146.3 million, of which $134.9 million is in federal funding, $11.1 million in state-restricted monies, and $300,000 in local funds. For the fiscal year 2022-23, the bill contains a $1.5 million General Fund for the Independent Citizens Redistricting Commission for its ongoing legal challenges over its adopted maps.

For the fiscal year 2021-22, the largest item in SB 7 is $120 million in federal funding for the Food Assistance Program within the Department of Health and Human Services.

Supplemental funding for the fiscal year 2021-22 in SB 8 totals $45.6 million of School Aid Fund spending and $27.9 million in federal spending for the fiscal year 2022-23.

Sen. Thomas Albert (R-Lowell) called the movement of the bills to the floor disgraceful, saying the S-1 substitute versions of the two bills were sprung upon GOP members at the last moment.

“Michigan taxpayers and residents deserve more transparency than this,” Albert said. “Sometimes appropriations bills must be handled in a relative hurry. I understand that. But in this case, there is no reason for the bills to be rushed for a vote today.”

Both bills were discharged from the Senate Appropriations Committee, which has yet to hold any hearings before floor substitutes were adopted and the final votes were taken.

Sen. Joe Bellino (R-Monroe) pointed to comments from Democrats in the early days of the session about multiple pieces of tax legislation they had introduced and contrasted that with the first bills to receive votes of the new session.

“What are the first real votes of this new Democratic majority? Bills spending more of the people’s money, not bills getting money back to people,” Bellino said.

Senate Appropriations Committee

Chair Sarah Anthony (D-Lansing) countered that the bills are overdue cleaning up of work left unfinished last year under the Republican-controlled Legislature before adjourning.”There were weeks and weeks and months in which our Republicans who were in control last term did not finish the job,” Anthony said. “There are many things on the balance sheet that need to be cleaned up, and closing our books, it’s something that we’ve done year after year in this chamber.”

Senate Minority Leader Aric Nesbitt (R-Porter Township) told reporters following the session that there were no negotiations on what was before the chamber Wednesday, adding he hopes there are negotiations in the final stages of the process.

“We tried to close the books last time, we tried to do a supplemental,” Nesbitt said, adding that there were three different deals with the governor while saying they were all reneged on. “It’s unfortunate that we didn’t make it happen because … the governor’s office not wanting to actually sit down and finish off … back in December.”

The redistricting commission funding was one item with which he disagreed. But, outside of that, he said a more transparent process and negotiation may have led to more votes for the bills before them Wednesday.

After the session, Anthony defended the bills to reporters, saying it was a standard package but without numerous special projects.

“There’s no large amounts of spending, this isn’t something that should be alarming to taxpayers,” Anthony said.

She said much of what is contained in the two bills are not out of the ordinary. Federal funding is largely grant funding for different programs that recently became available.

As the first votes of the session were along party lines, Anthony said she was not concerned and that other members could work out their own politics.

“I’m here to govern and not throw shots and throw shade,” Anthony said. “That’s just not my style. I’m going to be upstairs busy getting to work.”

Several other line items are included in the fiscal year 2021-22 portion of SB 7.

For DHHS, there is $9.5 million for state psychiatric hospitals to align appropriations with expenditures and another $5.5 million for an adjustment within the department’s Quality Assurance Assessment Program. About $4.41 million for DHHS covers a round of rape crisis services and support grants.

About $6.39 million would go to the Department of State Police for a fund shift from using revenue from the General Fund to using Coronavirus Relief Fund monies.

The remaining funds would be to the Department of Corrections for Detroit Detention Center local reimbursements ($300,000), federal CARES Act funding to the Department of Military and Veterans Affairs for an elevator replacement at the Jacobetti Home for Veterans ($150,000), and the Department of Environment, Great Lakes and Energy for site restoration ($50,000).

Under SB 8, the $45.6 million School Aid Fund for the fiscal year 2021-22 would be for special education reimbursements and include a $500,000 School Aid Fund for school breakfast. The $27.9 million in federal funding for the fiscal year 2022-23 is for grant monies awarded to the state for the establishment of safe and healthy learning environments.

Republicans in the House and the Senate are preemptively calling on Democrats to protect an income tax cut that could come later this year because of the 2015 road funding package passed by the Republican Legislature and signed by former Gov. Rick Snyder.

While the GOP minority is calling on Democrats to allow the potential tax cut to take effect, the majority and Gov. Gretchen Whitmer have not indicated they would try to change the law to avoid the tax cut.

The 2015 law, starting in the 2021-22 fiscal year, triggers a tax cut when General Fund revenues increase at a rate greater than inflation from one year to the next. This year, the individual income tax rate could be reduced from 4.25 to 4.05 due to increased state revenues.

However, the books on the fiscal year won’t close for a few months, and it is not certain what the tax cut will look like. For now, both fiscal agencies are estimating a drop to about 4.05%, however.

House Minority Leader Matt Hall (R-Richland Township), Senate Minority Leader Aric Nesbitt (R-Porter Township), and other Republican lawmakers held a press conference Wednesday to tout the expected tax cut and to warn Democrats not to block it.

“Republicans worked to put this into law in 2015 – that if government spending grows by significant numbers, the people of Michigan should get that money back in tax relief and in an income tax cut. Now, for the first time, it appears it’s going to happen,” Hall said. “While these conversations are going on about taxes here in Michigan, we must commit that we will allow the people in Michigan to get this income tax cut. They must get this relief because cutting the income tax means relief for all Michigan workers, families and seniors.”

Democrats have not publicly indicated they intend to undo the tax cut, nor did Republicans confirm that such discussions have been held behind closed doors.

“It was just a few short month ago that Republicans were reluctant to advance any tax relief when they had the opportunity, and I think it’s positive that we’re beginning the year with both sides of the aisle agreeing to tax relief as a priority,” said Amber McCann, press secretary for Speaker Joe Tate. “Discussing the details is something the speaker looks forward to over the next weeks and months.”

Both Republicans and Democrats introduced legislation last week that would provide tax cuts for Michigan residents (See Gongwer Michigan Report, Jan. 11, 2023).

Democrats introduced a bill that would phase down the tax on retirement income over four years, restoring the tax to what it was prior to the changes under Snyder’s administration, and a bill that would expand the Earned Income Tax Credit. Republicans have been critical of the measures, saying they’re complicated and don’t provide economic relief fast enough to all the Michigan residents that need it.

“Instead of immediate relief now for seniors and hardworking families, their plans actually dribble it in over the next four years. The full effects of their pension exemptions or the earned income tax credits are actually not fully in place until another four years after Gov. Whitmer is out of office,” Nesbitt said. “With a $9 billion surplus, I think it’s important that we provide immediate relief to working families, to seniors, no matter what their income is coming from.”

Last week, budget officials announced the state has an estimated $9.2 billion surplus heading into the next fiscal year. Still, Treasurer Rachael Eubanks said discussions about an income tax rate reduction were premature because the books have not yet been closed for the last fiscal year (See Gongwer Michigan Report, Jan. 13, 2023).

“If the Democrats try to come in here and do a bait-and-switch and say ‘Look, we’re getting targeted relief to some people in a few years, so we’re going to get rid of this income tax law’… They shouldn’t touch it,” Hall said. “People in Michigan are going to get an automatic income tax cut, and they need to understand that, and this bait-and-switch that takes years to implement is not a good substitute.”

McCann said there have been discussions about what happens if the law is triggered but not much beyond that.

“There is an awareness of the potential, but because we have not completed other outstanding items like the close of books or a final decision on any kind of tax relief, I think it is premature to assume that this policy will be, in fact, triggered,” she said.

The Senate approved book closing measures on Wednesday, and the House is expected to take those up soon.

Although McCann said bipartisan discussions on tax relief are still preliminary, Republicans have been critical of Democrats’ plans.

Hall said that leadership discussed proposals at a quadrant meeting last week and that Democrats had no answer to their concerns.

“Their plan gives no immediate relief to anyone and take at least a year to implement,” Hall said. “All we’re asking for is let’s work on a plan that give people immediate relief because they’re going to see all these politicians spiking the football on tax cuts and then they’re not going to see any benefit, and they need it now.”

The Detroit Regional Chamber supports legislation that would move Michigan’s Democratic presidential primary to earlier in the year, writing in a letter to lawmakers that the change would mean Michigan residents get a louder voice at the national level.

Brad Williams, vice president of government relations for the Chamber, sent a letter to Sen. Jeremy Moss (D-Southfield) in support of SB 13, which would move the primary to the fourth Tuesday in February. Moss introduced the legislation last week in the Senate, and the House introduced a similar bill with HB 4029 (See Gongwer Michigan Report, Jan. 17, 2023).

“Michigan is a top 10 state in population and economy and home to a diverse citizen base,” the letter says. “Additionally, Michigan is traditionally a very competitive state in the general election– and Michiganders deserve a larger voice in selecting our presidents.”

The Chamber also said that moving up the presidential primary could give the state an economic boost with more candidates and campaigns visiting the state and spending money on hotels, event venues, professional services, and transportation.

“Perhaps more important, however, is a better opportunity for more candidates to get to know Michigan residents and for our residents to share their values with presidential hopefuls,” the letter says.

Last week, Moss told reporters that moving up the primary shouldn’t be a partisan issue because it would bring more candidates to Michigan (See Gongwer Michigan Report, Jan. 12, 2023).

“We want to welcome all candidates on both sides of the aisle to gather Michigan input, campaign door to door here, demonstrate why they should be president of the United States and have Michiganders of both sides of the aisle weigh in early,” he said.

Senate Appropriations Committee Chair Sen. Sarah Anthony said this week that she plans to empower her subcommittee chairs in the upcoming budget process to have a more active role than has been the case in recent years.

Being able to work across the aisle with Republicans in good faith and enact policy priorities that best help the people of the state of all backgrounds are also goals for her during her time leading the chamber’s budgeting process.

“We want to ensure that this is an inclusive process, and that it’s pretty transparent, but also working under the auspices of trying to get the budget done in June, so that folks have predictability on the local level,” Anthony (D-Lansing) said.

She emphasized having an inclusive process, saying that has not always been the case.

“We’ve seen over the last few years things have been pretty centralized in terms of leadership, we’ve seen committee chairs not be as empowered,” Anthony said.

Those who serve as subcommittee chairs, she said, have been elected from all around the state and have expertise that should be drawn from during the budgeting process.

“We want to be transparent. We want to be inclusive … but we also want to get these things done on time,” Anthony said, adding she and others who have served in local government understand the need for predictability in budgeting.

She said there would be a thorough subcommittee process undertaken on her watch.

“I am excited about empowering the subcommittee chairs to do the work,” Anthony said. “These won’t be symbolic hearings; this will be working subcommittees that I think are going to be deputized to do a lot more.”

For many years, subcommittee chairs, within parameters of how much funding was available for their budget, ran their budget and had considerable discretion on how funding would be spent. But in more recent years, subcommittee chairs have been almost powerless with all decisions made by leadership and the Appropriations chairs.

In the previous term, the subcommittee chairs scaled back the traditional weekly hearings on their budgets in February and March because it generally was known to be a pointless exercise with eventual decisions out of their hands and made later in the year.

She said that getting the committee set up and ready to do its work has already been going at a rapid pace. Subcommittee chairs were announced last Thursday, and work is already underway to train members to prepare for the budget process.

“It’s been a crash course for (me) and now for our new subcommittee chairs,” Anthony said. “Coupling that with some pretty significant work that we need to do even yet in the next couple of weeks around closing the books, so we just don’t have a slow period.”

The senator said the book-closing work would begin in the coming days this week, and from there, things will shift to the regular budget process. A tentative agenda for Wednesday’s Senate session includes SB 7 and SB 8, and there are indications those will serve as supplementals to close the books on the 2021-22 fiscal year that ended Sept. 30, 2022. Anthony served two terms in the House prior to being elected to the Senate last November.

When named Senate Appropriations Committee chair in November, she became the first Black woman to ever assume the role in Michigan.

Prior to joining the Legislature, Anthony served on the staff of Democratic former Rep. Joan Bauer and worked for the Michigan College Access Network. She also was a member of the Ingham County Board of Commissioners from 2013 to 2018.

Having been a staffer for Bauer, she said there is a history of Lansing’s representatives being on appropriations, so she fought to be on the committee when elected to the House.

“I’ve always just loved the process, and I also love how you can do a lot of good policy through the budget process,” Anthony said.

When Democrats won the majority in November, Anthony said she put her name in the hat with the majority leader to be considered for Appropriations chair. She said her budget experience in the House and her temperament to serve in that capacity are strengths for her success.

Budget priorities for her, she said, will be kitchen table issues and anything that can provide working people and families relief.

“The EITC and the pension tax conversations. You’ll also see it in things like housing, and access to food and clean drinking water,” Anthony said. “Folks just haven’t felt that people have been listening and fighting and championing those issues. … It is jarring, how difficult it is for folks to actually just survive right now.”

She said she hopes that Republicans will enter negotiations on the budget and tax policy in good faith.

Housing was an example of a key priority for the senator. She said those in low- and middle-income brackets spend huge sums on their housing, adding that providing monies toward increasing the supply of affordable housing can transform communities across the state.

In the budget, she said she would also like to see areas prioritized, such as health care, both physical and behavioral health, and revenue sharing.

“We’ve heard it loud and clear that our communities are struggling, particularly urban communities, but even very rural pockets of our communities. They are seeking relief,” Anthony said.

Anthony said while in the House and serving in the minority, she was able to get several bills signed into law by working well with other members and having built strong relationships. She expects that to continue now that she is in the majority.

“People still want Republicans and Democrats and independents to work together, if it’s going to mean there’s a little more money in their pocket, that it’s easier to start a business or raise a family or locate to a community they want to call home,” Anthony said. “As long as we’re communicating and negotiating in good faith, I think we’ll be in good shape.”

The senator was also proud of the diversity of the leadership of the new Legislature.

“The Capitol’s feeling more like the state, it’s reflecting our state’s diversity,” Anthony said. “What will happen from that is just more inclusive policies.”

She said while it is exciting to see the diversity among leadership in both chambers, it must be meaningful and lead to strong policy results.

“If my presence as a Black woman in this position doesn’t mean that the conditions of marginalized communities doesn’t get a little bit better, than it really is just padding a resume,” Anthony said. “I’m just excited to lead in a way that hopefully means more women, more people of color, more folks from working-class backgrounds, see policy that’s represented here.”

She said she can bring some new perspectives to her role given her background and life experience, adding that as a good listener, she can also elevate the experiences of others in her district to translate that into good policy.

The senator called it a great time to chair Senate appropriations, having Gov. Gretchen Whitmer and House Appropriations Committee Chair Rep. Angela Witwer (D-Delta Township) as local partners.

“What you’re going to see is folks who can work really well together,” Anthony said. “Not a lot of gotchas, not a lot of bickering through headlines. You’re just going to see, really, three women work it out and I think that’s an exciting thing.”

Sen. Erika Geiss will serve as the chairperson for the 102nd Michigan Legislative Black Caucus, the group announced last week.

Geiss (D-Taylor) has been a long-serving member of the state Legislature, first serving in the House in 2014 before successfully transitioning to the Senate in 2018.

“At a time when our representation in the Legislature has changed dramatically, it is necessary for the MLBC to be present, engaged, and working diligently not just for today, but moving towards the future,” Geiss said in a statement.

Former Sen. Marshall Bullock, the most recent past chair, said in a statement that he was confident in the new board and that under Geiss’s direction, “the MLBC will continue work grounded in equity and justice.”

The MLBC was formed in 1976 and is currently a coalition of 30 state legislators from various communities to improve the lives of all residents, particularly Black residents, and their respective environments.

In addition to Geiss, Rep. Amos O’Neal (D-Saginaw) has been selected as executive vice chairperson. In a statement, O’Neal said he was humbled to hold the position.

“Being a part of this caucus means seeking change and finding solutions that enhance the communities we live in, not only for Black and other people of color, but for all Michiganders,” O’Neal said. “I am excited to play a larger part in this caucus and continue to make our state more socially and economically just.”

Members of the new session’s executive board include:

• Sen. Sarah Anthony (D-Lansing) as first vice-chairperson;
• Rep. Brenda Carter (D-Pontiac) as second vice chairperson;
• Rep. Felicia Brabec (D-Pittsfield Township) as secretary;
• Rep. Stephanie Young (D-Detroit) as treasurer;
• Rep. Helena Scott (D-Detroit) as historian;
• Rep. Cynthia Neeley (D-Flint) as chaplain; and
• Rep. Donavan McKinney (D-Detroit) as sergeant-at-arms and parliamentarian.