June 7, 2024 | This Week in Government: Business Groups Pan Nessel’s Call to Build Fossil Fuel Litigation Team

Attorney General Dana Nessel‘s announced intention to sue the fossil fuel industry for its alleged part in exacerbating climate change isn’t sitting well with Michigan’s business community.

Eight different statewide business groups sent Nessel a letter on Thursday to oppose her stated goal of bringing litigation against industry operators in Michigan, including the Michigan Chamber of Commerce, the Detroit Regional Chamber, the Grand Rapids Chamber, the Michigan Manufacturers Association, Michigan Retailers Association, Michigan Oil & Gas Association, Michigan Petroleum Association, and the Michigan Chemistry Council.

The letter said Nessel’s plan is a “dangerous and inappropriate use of a state office to attack and demonize Michigan businesses.”

“Every business and household in this state relies upon access to affordable and reliable energy. Our health care system, building and construction sector, and manufacturing supply chains all succeed or fail based on this fundamental truth,” the letter said. “The actions by the attorney general are not in line with those realities, nor are they in line with our state’s goals of growing our population, increasing access to affordable housing and childcare, or growing high-income and knowledge-based jobs.”

The attorney general announced in early May that she was recruiting a team of attorneys and firms with experience and interest in pursuing constitutional, statutory, tort, and other common law claims against industry actors.

“Our ‘Pure Michigan’ identity is under threat from the effects of climate change,” Nessel said in a statement issued with the announcement. “Warmer temperatures are shrinking ski seasons in the U.P. and disrupting the wonderful blooms of Holland’s Tulip Time Festival. Severe weather events are on the rise.”

Nessel added that the effects of climate change threaten the state’s economy and thriving agriculture businesses, too.

“The fossil fuel industry, despite knowing about these consequences, prioritized profits over people and the environment,” Nessel said then. “Pursuing this litigation will allow us to recoup our costs and hold those responsible for jeopardizing Michigan’s economic future and way of life accountable.”

Outcry from Republicans was almost immediate (See Gongwer Michigan Report, May 9, 2024).

MOGA was asked in May to provide a statement to Gongwer News Service on the situation, but it declined.

On Thursday, the group was joined by other prominent business associations in its official response by way of its letter to Nessel.

“This approach by the attorney general to leverage taxpayer resources for the sole purpose of what amounts to nothing more than jumping on a partisan bandwagon to inappropriately single out one industry for political gain,” the letter said. “Courts from across the country have questioned the logic and standing of lawsuits that attempt to specify and discriminate against certain businesses or business sectors surrounding global climate change. Indeed, the overarching question from many of these courts seems to be whether such ill-posited attempts to seek damages against private companies based on little or no legal backing in any way serves the public interest.”

The groups said it was “additionally problematic” that Nessel was recruiting with a request for proposals from firms and attorneys.

“Attorneys who stand to benefit in the form of massive financial awards through this contingency-fee structure. This is money that will provide no benefit (to) taxpayers but only enrich a select few who curry the favor of the attorney general herself,” the letter said. “It is troubling that the attorney general would attack Michigan’s ability to retain and grow jobs on a global scale.”

Department of Labor and Economic Opportunity Director Susan Corbin and Lt. Gov. Garlin Gilchrist II heard feedback on the Statewide Workforce Plan in a Wednesday roundtable, examining the successes and challenges of working to meet the goal of moving 75,000 households up to the middle class by the end of 2027.

Gilchrist and Corbin were joined by a group of statewide and local economic development officials, Rep. Kara Hope (D-Holt), and Capital Area Michigan Works! CEO Carrie Rosingana. The discussion was centered on removing barriers to job and service access for formerly incarcerated people, but the group also covered issues of education access, food assistance for students who work or have apprenticeships, and the ways change in income can limit access to government services.

“This is the first time we’ve ever had a statewide workforce plan that has very clear goals of where we want our state to be,” Corbin said. “We know that a lot of great things are already happening across the state. I think it was important for us today to hear what’s happening on the ground, people that are working, you know, working on our issues every day.”

Corbin said the workforce plan has had victories in the Department of Corrections Michigan Offender Success model, which helps connect returning citizens with skill-building and employment opportunities, and the Job Court pilot program in Genesee, Marquette, and Wayne Counties, which matches previously incarcerated workers with participating employers to work well-paying jobs to prevent recidivism.

Next up for LEO’s execution of the plan is expanding the Department of Licensing and Regulatory Affairs Returning Citizen Guidebook to include an outline of which industries have pathways to licensing for formerly incarcerated workers. Gilchrist said advancing initiatives like these will further the goal of reintegrating those who’ve been incarcerated back into the workforce.

“For that to be viable, (we have) to remove the barriers that stand between people and their possibilities, and so much of this is grounded in community support and people making sure that they are helping other people be successful,” Gilchrist said. “We’re seeking that people who are returning from incarceration have no more barriers between themselves and their full integration into civic and economic life, including pathways on apprenticeship and education, housing and other important pieces.”

Corbin said it was important to hear from members of the community about issues they had while implementing aspects of the workforce plan so LEO can begin to address them.

“There was an issue in terms of returning citizens accessing health care, and some of the barriers there, and I think that we need to fully understand that,” Corbin said. “Then one issue that I’m sure we have other state agencies working on is people not having the resources just to get simple documents, like their child’s birth certificate or their driver’s licenses.”

When it comes to carrying out the plans and services to fulfill the goals of growing the middle class, supporting entrepreneurial growth and helping more people get skills certificates and degrees, Corbin said inter-agency collaboration is key.

“Our challenge and my personal priority as a director in state government is that as we’re pursuing our goals and getting the work done that we know needs to happen, we also engage across state government with all of the other agencies that should be there,” Corbin said.

In the upcoming final stage of budget negotiations for fiscal year 2024-25, Corbin said she hopes to see programs like the Going Pro Talent Fund continue to be funded and receive ongoing investments from the state.

“We know that that’s a program that’s that program has been wildly successful. It supports Michigan employers so that they can have resources to train their employees,” Corbin said. “We know it’s a strong employee program as well because the training results in some kind of skill credential, and on average, employees see almost a 10% wage increase six months after they have sponsored retraining. (Gov. Gretchen Whitmer has) proposed adding an additional 20 million to that program, and that could be very impactful.”

Lawmakers formally began conversations on the long-term economic development policy package introduced last week, which was discussed at length during the Detroit Regional Chamber’s Mackinac Policy Conference.

The House Economic Development and Small Business Committee took up HB 5768, HB 5769, and HB 5770 for testimony on Tuesday. The committee also heard testimony on SB 559 and SB 562, legislation the Senate passed earlier this year that would overhaul the Strategic Outreach and Attraction Reserve Fund.

Taken together, the legislation aims to move conversation about economic development from being solely focused on incentives and tax breaks for big businesses to incorporating improvements for housing, transportation and other forms of community development to make Michigan more attractive for top talent within the workforce.

“When we first started this term, we heard a lot from businesses, from people in the economic development space, about what we can do to make Michigan one of the premier places in the country to do business, and we heard it loud and clear: We had to have a more robust set of incentives to attract businesses here, and we had to work on attracting and retaining talent to the state,” Rep. Jason Hoskins (D-Southfield) said. “I’m hopeful that with this package of bills will contain that success – being able to really set ourselves apart here in the state as a place where you can come to start a business, grow your family and to really make sure, as we say, you can make it in Michigan.”

Hoskins sponsors HB 5768, which would put $600 million of Corporate Income Tax revenue toward economic development, transit and other community improvements.

The bill would, effectively, replace the current $500 million annual distribution to the SOAR Fund with a $250 million annual distribution to the Make it in Michigan Fund and a $200 million distribution to a new Michigan Mobility Trust Fund. It would also increase the annual distribution to the Michigan Housing and Community Development Fund to $100 million and continue the $50 million annual distribution to the Revitalization and Placemaking Fund, all of which would expire at the end of FY 2034-35.

HB 5769 would create the Michigan Mobility Trust Fund and the Transformational Projects Authority, which would administer financial support programs for public transit operations.

“This package will chart a path for long-term, transformational economic growth strategy for Michigan for housing, infrastructure, and mobility,” Rep. Jason Morgan (D-Ann Arbor) said. “What is unique to this package is just how it transcends the traditional debate of hitting economic development versus infrastructure developments. This truly is a win-win.”

HB 5570 would create the Michigan Mobility Trust Fund in the Department of Treasury.

“These are investments our constituents have been telling us they have wanted and needed for decades,” Rep. Mike McFall (D-Hazel Park) said. “Transit is a magnet for talented workers, and these bills working in concert together will allow us to attract those workers and show the business community Michigan is serious about economic development. I’m also proud of the affordable housing and community revitalization investments in this legislation, which will benefit our towns, suburbs, and rural areas across Michigan.”

McFall highlighted that the legislation uses existing programs while weaving together “committed, dedicated, and transparent funding.”

“This plan does not benefit one part of the state; it will have a positive impact on all corners,” he said.

Rep. Greg VanWoerkom (R-Norton Shores) expressed concern that much of the plan sounded like programs and funding already included in the Department of Labor and Economic Opportunity budget.

“What are we doing here?” he said. “Are we just creating a mini government that is now housed in MEDC that gets to make this decision making, rather than duly elected officials?”

Sen. Mallory McMorrow (D-Royal Oak) said that instead of giving more money to the Michigan Economic Development Corporation, the legislation was providing additional funds to existing programs that are already working well for communities. The funding would be decoupled from SOAR funding, which is overseen by the MEDC.

“This is a continuation of the work we’ve already done,” she said. “And I don’t know about you, but I’m hearing from many of our communities that those funds are desperately needed, and we’re already seeing them successfully deployed into our communities.”

Nearly 90 cards were submitted in support of the legislation on Tuesday, and several people attended the meeting to testify in favor of it.

“Addressing economic development incentives in a holistic manner, as I believe these bills do, will not only help us retain and attract companies to Michigan but also employees that are looking for affordable homes and thriving communities,” Oakland County Executive Dave Coulter told the committee.

He said the legislation could help build out public transportation in the Metro Detroit area.

“We’re going to continue to grow the transit system in our locality in the years ahead, but I’m also passionate about connecting what we’re doing in the country through a truly integrated regional transit system,” he said. “The legislation that you’re considering today could play an important role in bringing this effort to life.”

Warren Cole, the president and CEO of Traverse Connect, the economic development organization for the Traverse City region, praised the legislation for not taking a one-size-fits-all approach.

“We’re encouraged by efforts in this legislation to recognize the different regions of the state and different transit and mobility,” he said. “Good policy provides flexibility to address the different needs and provide regional equity in state expenditures.”

There’s never been more need for a comprehensive economic growth strategy, Jared Fleisher, who is the government affairs and economic development for ROCK, told the committee.

“Michigan is 49th in the nation in population growth. Only West Virginia is worse. … We are stagnating in prosperity and population. This is a giant wakeup call itself for the business community,” he said. “We look to our leaders– what are our leaders doing to lead the state? And if we don’t have this bill package, the answer is nothing.”

A holistic approach that invests in communities and infrastructure is necessary, Fleisher said

“This is a package that brings it all together,” he said. ‘The alternative is being at a dead end with no direction… If we don’t do this, it’s just us and West Virginia.”

Officials from the Michigan Municipal League, Mass Transportation Authority Flint, the Michigan Public Transit Association, Transportation Rider United, SMART, and the International Union of Operating Engineer Local 324 also expressed their support.

No further action was taken on the legislation on Tuesday.

The committee reported HB 5651, HB 5652, and HB 5653, which created the Michigan Innovation Fund. The bills were reported 8-0 with Rep. Betsy Coffia (D-Traverse City), Rep. Mark Tisdel (R-Rochester Hills), Rep. David Martin (R-Davison), Rep. John Roth (R-Interlochen) and Rep. Alicia St. Germaine (R-Harrison Township) abstaining.

A coalition of Michigan Democrats joined One Fair Wage advocates said during a Tuesday press conference a $15 minimum wage is popular among voters Democrats want to turn out in November.

The press conference came after the Supreme Court this week declined to order the Board of State Canvassers to certify a proposal that would put a minimum wage proposal on the ballot.

Rep. Donovan McKinney (D-Detroit) said voters’ desire for a wage increase is a factor he’s observed as consistent throughout his time working in community advocacy in politics, and he doesn’t see that changing anytime soon.

“One of the top issues that I heard on the doors wasn’t guns, it wasn’t abortion,” McKinney said. “It was the fact that (people) don’t have enough disposable income outside paying their bills to do anything else. They just work to try to survive. And that’s so unfair to countless Michiganders across the state because they deserve a better life, a livelihood that’s worth living.”

Michigan Democratic Party Chair Lavora Barnes was set to join McKinney and One Fair Wage at the press conference but did not make an appearance.

Celinda Lake, on behalf of One Fair Wage, said a recent poll conducted by the group that has pushed higher minimum wages across the country supported McKinney’s comments.

“We found this in polling that we’ve done for candidates,” Lake said. “Voters decisively support raising the minimum wage for all workers, including the minimum wage for tipped workers to the full minimum wage with tips on top. And people strongly support $15 and are surprised that it hasn’t already been done, particularly in a state like Michigan, where people think that this is one of the major solutions to the top problem out there.”

One Fair Wage president Saru Jayaraman pinned responsibility for the proposal’s continued inability to find a spot on the ballot on statewide Republicans who oppose the effort.

“We have been at this in Michigan for 10 years,” Jayaraman said. “A decade of pushing to raise the minimum wage on the ballot cycle after cycle after cycle. The Republicans in Michigan have attempted and pushed and engaged in all kinds of incredibly outrageous activities to keep voters from having the ability to vote on what they over and over again are saying in polling is their top issue, which is raising the wage to cover costs.”

Moving forward, Jayaraman said her organization will continue to pursue wage increases in court and through the Legislature.

“We are very optimistic that the Supreme Court will, in fact, rule as the Michigan Court of Claims did that what the Republican-led Legislature in 2018 did was unconstitutional, making $12 (per hour) and ending sub-minimum wages the law of the land,” Jayaraman said. “We’re also calling on the legislature to listen to the will of the voters, as Republicans have not.”

John Sellek, a spokesperson for Save MI Tips, which opposes the efforts to end the tipped wage, said the poll failed to account for tipped workers who fear losing their jobs if the credit is done away with.

“The slide deck for this poll literally states that One Fair Wage has the goal of using servers & bartenders as voter turnout tools instead of trying to help protect their tipped income,” Sellek said. “Nowhere did they explain to voters what the actual servers and bartenders say – that their tips will be cut, and jobs will be lost if One Fair Wage gets its way and ends the tip credit.”

During last week’s Mackinac Policy Conference, many tipped workers on Mackinac Island wore orange pins during their shifts expressing support for Save MI Wage, which Sellek said was indicative of tipped workers’ sentiments about the end of tip credits. One Fair Wage’s poll presentation, he said, didn’t mention the negative outcomes that have come as a result of similar ballot proposals in other states.

“The presentation also fails to mention that 2,900 full-service restaurant jobs were lost in Washington, D.C. after a similarly untruthful proposal was placed before voters there, which equates to 45,000 jobs here,” Sellek said. “The bottom line is that when Michigan tipped workers were asked, 83% said they want to keep the tip credit in place, and 79% fear losing their jobs if it is eliminated.”

Legislation that would change eligibility requirements, as well as the funding and fee caps for the Low-Incomes Energy Assistance Fund, would enable more utility customers to obtain needed help to power their homes, a Senate panel was told Wednesday.

The Senate Energy and Environment Committee took testimony on SB 353, SB 879, SB 880, and SB 881.

The Public Service Commission each year under sets the funding factor for the monthly per-meter fee assessed on retail electric billing meters in all rate classes, capped at $1.

The Low-Income Energy Assistance Fund raises money to provide energy assistance to qualifying Michigan households. It is capped at $50 million and is administered by the PSC in partnership with the Department of Health and Human Services.

Collectively, the bills would remove the $50 million cap, increase the monthly per-meter fee cap to $2, and amend the household income eligibility requirements for the program.

Beginning October 1, 2027, and each year afterward under SB 879, DHHS would be required to provide a report to the legislative appropriations committees and energy committees on the program.

Under SB 880, the $1 cap would be increased to $2. Provisions in the existing law allowing energy providers to opt out of collecting the surcharge would also be eliminated under the bill. Changes to the funding factor each year would be amended under SB 881.

Sen. Sam Singh (D-East Lansing), the sponsor of SB 879 and SB 880, said some possible changes are expected in substitutes to the bills following conversations with stakeholders representing electric cooperatives and municipal utilities. He said an opt-out for smaller utilities is expected to be added to the legislation based on the size of the utility but with a requirement for the utility to provide a similar program instead.

As introduced, SB 353 would expand eligibility for qualifying households from 150% of the federal poverty level to 200%.

Sen. Veronica Klinefelt (D-Eastpointe), another bill sponsor, said a substitute is expected to be offered that would change the eligibility requirement from 200% of the federal poverty rate to instead being 60% of the state median income.

“The substitute changes that eligibility, which allows for better alignment with existing low-income eligibility programs and federal guidelines,” Klinefelt said.

Sakinah Howard, manager of customer service strategy with DTE Energy Company, said an eligibility expansion would be huge for the utility’s customers.

“MEAP expansion for DTE would allow up to 30% of our customer population to actually qualify for assistance,” Howard said.

Brian Lewis, executive director of customer operations for Consumers Energy Company, said customers need more support than ever.

Lewis said Consumers helped 150,000 customers in 2023 alone with some form of energy assistance, adding many more are likely in need but do not meet various eligibility requirements due to income.

“The bills will help us to address this gap by expanding eligibility for MEAP and to connect more customers to essential assistance,” he said.

Alicia Ramon, chief operating officer for the Heat and Warmth Fund, said expanding the eligibility requirements for household income would be immensely helpful to those in need, saying no one should be faced with the choice of “paying a utility bill and putting food on the table.”