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April 9 | This Week in Government: Business Groups Urge Gov, Legislature to Create Growth With Stimulus

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. Business Groups Urge Gov, Legislature to Create Growth With Stimulus
  2. CDC Awards $90M to Expand Michigan COVID Vaccine Program
  3. Whitmer: Compliance, Mobility, Variants Driving COVID Increase
  4. House, Senate to Begin Moving on Budget After Break
  5. Survey: State Saw Higher Rate of Biz Closures, Staff Reductions

Business Groups Urge Gov, Legislature to Create Growth With Stimulus

Several associations representing Michigan business entities on Tuesday said they want Gov. Gretchen Whitmer and the Legislature to use the state’s cut of federal coronavirus relief and stimulus dollars to transform the state and create sustainable growth.

In a letter sent to Gov. Whitmer, as well as the state’s legislative and local leaders, the groups asked the governor to not spend the funds quickly and instead use them as long-term strategic investments.

Groups signing the letter include Business Leaders for Michigan, the Detroit Regional Chamber, the Grand Rapids Chamber, the Lansing Regional Chamber, the Michigan Manufacturers Association, and the Small Business Association of Michigan.

“In this moment, leaders must work together across party and jurisdictional lines as almost $14 billion in these federal funds will be allocated directly to state and local governments, and our K-12 systems with few restrictions,” the letter says. “Naturally, there will be many ideas for spending these onetime dollars and an inclination toward doing so quickly. Our organizations strongly urge leaders to take the time needed to assure these funds aren’t simply spent, but are used effectively in transforming Michigan into a better place to live, work and play.”

The groups outline six key principles to guide those investments, including the use of transformational investments, like those that would bolster education, skills, and competitiveness; maximization efforts that would address economic, health, and educational gaps brought on by COVID-19; renewed focus on flexible funding to fill in gaps in the aforementioned areas after other state resources are exhausted; investments that would leverage increased public-private partnerships; a focus on backslide prevention to not undo gains made from the previous recession in the late 2000s and throughout the 2010s; and to be clear with goals and metrics to increase transparency in spending.

“Make no mistake, other states will use this funding opportunity to become more competitive and leave the working men and women of Michigan behind,” the letter says. “By following these basic guidelines, we believe that these dollars can be invested wisely and contribute to sustainable, equitably shared prosperity for our residents, communities, and businesses. In that spirit, we offer you our support and assistance to make sure Michigan takes full advantage of this once-in-a-lifetime opportunity.”

Jeff Donofrio, president and CEO of Business Leaders for Michigan and former member of the Whitmer administration, said in a statement that it would be easy for the governor to find ways to spend Michigan’s share of one-time funding from President Joe Biden’s $1.9 trillion American Rescue Plan, but it would be far more difficult – albeit potentially more worthwhile – if she spent that money on targeted transformational investments.

“Michigan’s goal shouldn’t just be returning to pre-pandemic status: this is an opportunity to both help our state recover from COVID-19 and advance long-term, widely shared prosperity.” Donofrio said. “We know states and regions across the country are planning strategic investments that will give them even more of a competitive edge for jobs and economic growth in the coming years – Michigan can’t be left behind.”

Likewise, Brian Calley, president of the Small Business Association of Michigan, said that the virus and its associated disease resulted in unprecedented challenges and that using federal stimulus dollars wisely would help the state rebound more swiftly.

Sandy K. Baruah, president and chief executive officer of the Detroit Regional Chamber, shared similar sentiments.

“The American Rescue Plan is a once-in-a-generation opportunity for Michigan to advance our state’s economic competitiveness responsibly,” Baruah said. “It is imperative that leaders in Lansing strategically use the money to support communities, businesses, and people without new taxes or unfunded mandates that would create impediments to sustained growth.”


CDC Awards $90M to Expand Michigan COVID Vaccine Program

More than $90 million in funding from the federal Centers for Disease Control and Prevention has been awarded to Michigan to help support, increase and expand local coronavirus vaccination efforts for underserved populations, the agency announced Tuesday.

The award of $90.28 million is part of a $3 billion funding package granted to 64 regions to bolster broad vaccine distribution, access, and administration. The funding was made available by President Joe Biden’s American Rescue Plan and the Coronavirus Response and Relief Supplemental Appropriations Act to provide critical COVID-19 support for existing immunization cooperation agreements.

To ensure equity and expand access, at least 75 percent of the total funding will go toward programs to increase uptake among racial and ethnic minority communities. Of that amount, 60 percent is slated to go toward support for local health departments, community-based organizations, and community health centers.

“We are doing everything we can to expand access to vaccinations,” CDC Director Rochelle Walensky said in a statement. “Millions of Americans are getting vaccinated every day, but we need to ensure that we are reaching those in the communities hit hardest by this pandemic. This investment will support state and local health departments and community-based organizations as they work on the frontlines to increase vaccine access, acceptance and uptake.”

Other potential uses for the funds include to be used to identify and train trusted members of specific communities to conduct door-to-door outreach, raising awareness about the available vaccines, and help individuals sign up for vaccination appointments. The same goes for bilingual health outreach, the CDC said.


Whitmer: Compliance, Mobility, Variants Driving COVID Increase

Gov. Gretchen Whitmer Tuesday, ahead of receiving her first dose of the coronavirus vaccine, said the state does not have a policy problem as it relates to rising caseloads and hospitalizations — it has compliance, mobility, fatigue, and variant problem.

Gov. Whitmer, who received her first dose of the Pfizer vaccine at Ford Field on Tuesday, was asked about COVID-19 outbreaks being linked to school sports. The Governor noted the state has put in place increased testing mandates for some school athletes.

“We’re really encouraging athletes to join our quest to get more people vaccinated, and that’s why we’re so glad to be here at Ford Field and that’s why we’ve enlisted a lot of our partners in athletics to promote the efficacy and the need for getting these vaccines,” Gov. Whitmer said. “At this juncture we know what it takes to stay safe. It’s not a policy problem that we have. It is a compliance problem that we have. It is a mobility issue that we’re confronting. It is fatigue that we’re confronting, and its variants, frankly. And because of all these things, that’s why the vaccine is so important – 95 percent-plus efficacy. Guess what else has 95%-plus efficacy? A mask, which is why we have to do both until we get to that plus 70% of our eligible population vaccinated.”

Gov. Whitmer, appearing on CNN Tuesday evening, said school sports is one area where maybe the state needs to be doing more.

“We did suspend sports for quite a while and of course, there was a heavy effort to come to our state Capitol to protest that. We thought with these additional precautions in terms of increased testing, increased ability to have these safety protocols, decreased numbers of people that can attend these events that we would be able to do this safely,” she said. “But we are seeing the spread continuing in teenage sports and, frankly, it’s something that we’re very concerned about and that’s why we’re doing even more testing and possibly going further than we have. But it is it is a contributor and our goal is to resume some normalcy and get our kids back in class, this may be one area that we’ve got to do more in.”

Dr. Joneigh Khaldun, chief medical executive for the Department of Health and Human Services, said she is concerned about where the state currently is when it comes to COVID-19 numbers and hospitalizations.

Currently, she said, the state is seeing more than 5,000 new COVID-19 cases per day with a seven-day average of 491 cases per million people. The current positivity rate is 15.6%, a 38% increase from last week.

The state also has 1,817 confirmed variant cases in 54 counties, with likely many more that have not been identified. Hospitalizations are also up, with 3,127 confirmed COVID-positive patients in the hospital, up from 2,158 last week.

About half of those who are hospitalized are younger than 60 years old, Khaldun said.

“This is really, really important. Younger people can get COVID-19. They can get very sick from COVID-19, or they can pass it on to other people who can get very, very sick. So, we are all in this together, no matter your age,” Khaldun said. “When you get vaccinated, you’re protecting yourself, you’re protecting your family, you’re protecting your entire community. These safe and effective vaccines are really our best chance to protect not just ourselves, and I’m speaking to the youth here, it’s not just about ourselves. It’s about your parents, your aunts, your uncles, your grandparents, your entire community. It’s our chance to be able to have class with our friends and not have to go back to these periodic remote learning styles. It’s our chance to play sports, without canceled games or tournaments due to outbreaks. It’s our chance to be able to have traditional proms and graduations and baby showers and other celebrations of life’s milestones again. It’s really our chance to get back to a sense of normalcy.”

While cases and hospitalizations are up, deaths are not as high, sitting at about 16 per day.

During her appearance on CNN Tuesday, Whitmer said she does see a path where the state could lift some of the orders it has been living under this summer, similar to California which will still require masks but open normally on June 15.

“I think it’s very possible that there is a path out of a lot of the orders that we’ve had to issue to keep people safe. But it all depends on getting to that 70% number of people who are eligible vaccinated,” Gov. Whitmer said. “I think that’s the key to return to some normalcy. We’re moving very quickly. We’re grateful for the partnership from the Biden Administration, but we’ve got to do more. And we’re going to continue to grit our teeth and do the hard work of getting people vaccinated. And if we’re successful on people come in and do their part, we could very well be in that position this summer.”


House, Senate to Begin Moving on Budget After Break

Subcommittee budget recommendations should begin heading to the House and Senate chamber floors later this month shortly after lawmakers return from spring recess, officials have signaled.

Senate appropriators say despite the ongoing battles over federal coronavirus relief funding, work on department and agency budgets is going at about the pace that was expected thus far. At least two House subcommittee chairs said they would move their budget recommendations next week, when lawmakers are scheduled to return from break.

Sen. Jim Stamas (R-Midland), chair of the Senate Appropriations Committee, said overall he is pleased with the progress being made by subcommittee chairs, who were given their budget targets about a week before the Legislature left town. Lawmakers return April 13.

Stamas said he expected budgets to begin moving from subcommittees to the Senate floor during the second week of session after lawmakers return, the session week of April 20.

“We’ve been dealing with the federal dollars almost independently of the budget,” Stamas said, although he expects some overlap to occur.

At this stage lawmakers are still crafting each proposal so there really has not been interaction with the administration on what each chamber of the Legislature is crafting for its budget proposals.

“We’ll have some significant differences,” Stamas said, adding that is normal in the budget process prior to negotiations.

How much negotiation will occur with the administration is unclear.

Rep. Thomas Albert (R-Lowell), who has heavily resisted working with the administration thus far, did not return requests for comment. Some subcommittee chairs referred questions on the budget timeline to Albert, so it is also unknown if all subcommittees will be moving budgets quickly after the break in the House.

With the state being in line for billions of additional one-time federal coronavirus relief funds, Stamas said the challenge will be finding the correct balance in using the funds to best provide services while not saddling the state with items that could become ongoing budget expenses.

Stamas said he is concerned about one provision within the federal American Rescue Plan Act of 2021 allowing taxpayers with an adjusted gross income of less than $150,000 to exclude up to $10,200 of unemployment compensation from federal tax for 2020 only.

Stamas estimated that could present a $600 million to $700 million General Fund hit to the state, which will need to be reviewed to see how it could impact the budget.

He said one immediate issue in the budget process is when the state gets the full information from the federal government on tax policy changes and its impact on budgeting. That could create a crunch around the time of the May revenue estimating conference.

Sen. Roger Victory (R-Georgetown Township) is also anticipating moving budgets out of the subcommittees he chairs one or two weeks after lawmakers return from break.

Victory chairs the Senate Appropriations General Government Subcommittee and the Senate Appropriations Agriculture and Rural Development Subcommittee.

He said it has been a more difficult process than in the past “with the tsunami of federal dollars coming in” which he said requires a bit more information on how it can be spent. How the federal pandemic relief funds will supplement the base budget is a key question, he said.

Victory said it is a tough balance to use the federal funds that might be included within budgets without becoming reliant on those funds. He said prioritizing budget items to help the economy recover from the pandemic is key in the process.

While the process may be running close to expectations if not a little behind, Victory was confident the process can be completed on time.

“I’m sure we’ll hit a pothole or speed bump in the process,” Victory said, which he added is not unusual.

He said one area of concern is making sure the state continues to focus on improving its information technology programs.

Another item he said he sees as a potential economic impact is the global chip shortage for automobiles. With Michigan being a major manufacturing state, he said a concern is how that might impact the auto industry over the next year or so as the state recovers from the pandemic.

Rep. Mary Whiteford (R-Casco Township), chair of the House Appropriations Health and Human Services Subcommittee, said she hopes to report her panel’s budget recommendation next week when the Legislature returns from break.

Whiteford said she thinks the process has gone well so far and that she has a “really good relationship with the department.”

Rep. Bradley Slagh (R-Zeeland), chair of the House Appropriations Corrections Subcommittee, also said he would like to report his budget recommendation out when the Legislature returns from break.

Kurt Weiss, spokesperson for the State Budget Office, said the administration does not have an exact idea on timeline, other than the Legislature is statutorily required to have a budget submitted to the governor by July 1.

“It’s our hope that it will be a negotiated budget that prioritizes our residents. Given the amount of federal funding, we are becoming concerned that a failure to have a traditional budget process will put us at a competitive disadvantage against other states that are investing these funds,” Weiss said. “Director Massaron continues to have informal conversations on the supplemental funding for this year, but no formal meetings have occurred as of yet.”

Sen. Ken Horn (R-Frankenmuth) said the budget he is working on will take some time after the legislative break is over, possibly almost into early May.

Horn chairs the Senate Appropriations Labor and Economic Opportunity/MEDC Subcommittee.

“We’ve lost a year with the pandemic, although that year feels like a decade,” Horn said. “I want to make up for that lost year.”

The senator said he feels that the pandemic has provided an opportunity not only for economic recovery but to improve on workforce training programs to craft a thriving post-pandemic economy.

For workforce development, Horn said he is going to be pushing for funding for the Going Pro Talent Fund program and Michigan Reconnect program.

Another priority is to propose additional funding for Pure Michigan to provide further assistance to help the state’s battered hospitality industry.

Workforce development program investments will be critical in getting more people back to school to get certificates and trained for new or advanced careers, he said.

For economic development, he said one proposal he is working on is an expansion of the Good Jobs for Michigan program to allow opportunities for existing businesses to invest in technology or facility upgrades. He said many of the state’s incentives tend to favor new or incoming businesses, but that there needs to be some support for long-established businesses which have good relationships with their communities and the state.

Separate from the budget, Mr. Horn said he is pushing through the Joint Capital Outlay Committee to invest more in equipment upgrades for career technical education training at higher education institutions. He said during the pandemic is a good time to make such investments in a cost-effective way.


Survey: State Saw Higher Rate of Biz Closures, Staff Reductions

Michigan small businesses have experienced a higher rate of closures and staff reductions during the coronavirus pandemic compared to the national average, a research project report released by Facebook said Thursday.

A positive sign was more Michigan businesses expressed confidence in being able to remain open during the next six months under current pandemic conditions than the national average.

In the most recent Global State of Small Business report, 24% of Michigan small businesses reported being closed compared to a 22% national average.

Those reporting reductions in employment totaled 36 percent of small businesses in Michigan. This was above the national average of 27%. Only New York (38 percent) was ahead of Michigan and Illinois also reported 36%.

Confidence was expressed by 76% of Michigan small business owners that they would be able to remain open during the next six months, higher than the national average from respondents of 68%.

In announcing the latest report, Facebook Chief Operating Officer Sheryl Sandberg said businesses globally have struggled during the pandemic, women and minority-owned businesses being hit hardest.

“A further reminder that whenever crises hit, it’s always the most vulnerable who are hit the hardest,” Sandberg said.

The new report was based on responses of more than 35,000 small business owners in 27 countries and territories in February. The survey included 605 respondents from Michigan.

Fifty-four percent of women-led small businesses nationally reported declines in sales, compared to 47% of businesses run by men.

Thirty-three percent of Black-led small businesses reported nationally of being closed, compared to 18% of other small businesses.

A total of 32% of minority-led small businesses nationally reported reductions in employment since the start of the pandemic. This was compared to 25% of other small businesses.

Globally, 26% of businesses were closed in February. This was up from 16% in October 2020 and 29% in May 2020. For the United States, 22% of small businesses were closed in February compared to 14% in October 2020.

“If there’s a silver lining, it’s that many businesses found success online,” Sandberg said. “More than half of those surveyed said they used digital tools to communicate with customers, and those reporting higher shares of digital sales were also more likely to have reported more robust sales overall.”