Governor Whitmer Extends Michigan’s Liquor License Renewals from April 30 to July 30

LANSING — Governor Gretchen Whitmer today announced a three-month extension for liquor licensees to renew their 2021 licenses. The annual license renewal expiration date will be extended from April 30 to July 30 this year to assist licensees who have been impacted as a result of the COVID-19 pandemic, by providing additional time to renew their licenses.  The governor’s action will be implemented by administrative order issued by the Michigan Liquor Control Commission (MLCC). The license renewal extension will benefit approximately 19,000 licensees.

“Our bar and restaurant owners have made incredible sacrifices during this pandemic and they should not have the additional stress about renewing their liquor license by April 30 this year,” said Whitmer. “We want to ease the burden by extending the customary deadline so they can focus on getting back to business. My administration has also secured crucial support for these businesses through a bipartisan supplemental budget that I signed to provide greater financial relief for small business owners in our hospitality industry.”

Licensees are strongly encouraged to renew their license online to ensure timely processing of their renewal application and avoid any potential delays with mailing their renewed license. Licensees do not have to wait to renew their license.  Licensees may renew their license(s) when it originally expires or at any time before the extended due date of July 30.

“This extension will allow staff from the MLCC Licensing Division to work with those licensees who need the extra time to renew,” said Orlene Hawks, director of the Department of Licensing and Regulatory Affairs (LARA) where the MLCC is housed. “Those who still wish to renew immediately will have the opportunity to do so, but this new deadline will also give our licensees the flexibility to wait a few months to renew their license.”   

Licensees are encouraged to visit the MLCC website often for updated information at www.michigan.gov/lcc.  The MLCC Licensing Division appreciates licensees’ timely renewal and is working to ensure that this year’s renewal goes smoothly.

“The Commission is pleased to implement Governor Whitmer’s action. This extension is a big step toward getting our bar and restaurant owners back to a new normal as quickly as possible,” said MLCC Chair Pat Gagliardi. “Licensees in the hospitality industry across the state won’t have to worry about losing their license over the summer months, which typically is a busy time for them.”

Licensees are reminded that failure to renew and receive an updated license may result in violations and/or automatic termination of the license.

For more information on the coronavirus / COVID-19 state of emergency, please visit the State of Michigan’s coronavirus website at: www.michigan.gov/coronavirus.

Detroit Regional Chamber Reports on COVID-19 Economic Effects

dbusiness 

February 25, 2021

By Grace Turner

The Detroit Regional Chamber, based in Detroit, examined the impact of COVID-19 on metro Detroit’s economy and found in a new report that some sectors are still struggling to overcome the pandemic.

“COVID-19 continues to leave deep scars on the Detroit region’s businesses and communities,” says Sandy K. Baruah, president and CEO of the chamber. “The pandemic has exacerbated long-term inequalities with many parts of the economy and society. This has led to a deeply uneven recovery where some industries have shown quick improvements and gains, while millions of Americans, Michiganders, and the businesses that once employed them are still struggling.”

Study Results:

  • More than 2.2 million initial unemployment claims were filed in Michigan from March-December 2020. The number of claims from those continuing on unemployment have decreased yet remained at nearly 200,000 per week through the end of 2020.
  • As of the end of December, the number of small businesses open in the region decreased by 32.6 percent, with nearly a 40 percent drop in revenues since January 2020.
  • Consumer spending in the region decreased by 18.4 percent by the end of December compared to January 2020.
  • The region’s transportation and arts, entertainment, and recreation industries experienced the most extensive consumer spending declines, by 61.2 percent and 66.7 percent, respectively.
  • In a December 2020 Detroit Regional Chamber poll of Michigan voters, one in four respondents said they continued to deal with catastrophic or major effects on their household finances.
  • Housing insecurity was amplified over the course of the pandemic, with more than one-third of households surveyed nationally and in the region in December 2020 expressing they are not current on rent or mortgage payments, to the point that eviction or foreclosure in the next two months is likely.
  • Detroit Metro Airport, paralleling national trends, saw a decrease of 61.6 percent in airline passengers in 2020 to 14 million, compared to 36.2 million in 2019.
  • Nationally, the hotel industry experienced the worst year on record. The Detroit region’s hotel occupancy rates recorded a 35.5 percent decrease in December 2020 compared to the same month in 2019, exceeding the national decline of 32.3 percent.

Reasons for Optimism and Concern:

  • Quarterly changes to Michigan’s gross domestic product fluctuated dramatically throughout 2020 as the pandemic drove economic contraction, particularly because of manufacturing-related shutdowns that occurred in the second quarter. Michigan’s GDP fell 37.6 percent from the first to second quarter but rose by 44.2 percent from the second quarter to the third.
  • U.S. light vehicle sales seasonally adjusted annual rate dropped to as low as 8.7 million in April 2020. Resilience in the retail market resulted in much better performance than expected, with the total U.S. light vehicle sales reaching 14.6 million in 2020 compared to 17.1 million in 2019, a drop of 14.4 percent annually.
  • Private sector jobs in the Detroit region reached a low of 1.5 million in April, a loss of 556,000 jobs over two months, before ending the year at 1.9 million jobs, a 10 percent decrease compared to the beginning of 2020.
  • The Detroit region’s monthly unemployment rate peaked at more than 24 percent in April, 10 percentage points above the same month’s national rate. The rate decreased through 2020, ending at 10.1 percent in December, compared to the national rate of 6.7 percent.

Reasons for Optimism:

  • The number of new business applications in Michigan saw a 42.2 percent increase in 2020 compared to 2019. New business application growth after a recession is a leading indicator of recovery.
  • As an indicator of the manufacturing sector’s economic health, the U.S. Manufacturing PMI (Purchasing Managers’ Index) reported eight consecutive months of growth, rising to 60.5 percent in December, after the low in April 2020 of 41.7 percent. All six of the biggest manufacturing industries demonstrated moderate to strong growth in December 2020.
  • In the Detroit region housing market, single-family homes’ median sale price increased 23.3 percent from the first quarter of 2020 to the third quarter, rising to $236,300. New construction remained resilient through 2020 also, with construction permits for 2020 matching that of 2019.

“There is often a strong correlation between national economic downturns and deep recessionary periods for Michigan,” Baruah says. “However, critical sectors for our economy like automotive, manufacturing, and housing have all shown remarkable resiliency. Full recovery for all sectors of our economy will require the effective administration of vaccines and targeted governmental support for the unemployed and business that the pandemic has disproportionately impacted.”

View original article here.

2021 State of the Region: Reasons for Optimism but K-Shaped Recovery Exacerbates Challenges Ahead

There are some positive economic trends that should give Michigan optimism in recovering from the pandemic. However, the disproportionate K-shaped recovery exacerbates the challenges to robust and equitable economic growth, according to Detroit Regional Chamber President and Chief Executive Officer Sandy K. Baruah.

“There are important differences between the recessionary trends of 2020 that are notably different from what we witnessed during the Great Recession – and give us some hope that this downcycle will be different from the usual ‘when America gets a cold, Michigan gets the flu’ story,” said Baruah as he presented the seventh annual State of the Region report.

Those positive trends include:

  • Unemployment levels have stabilized as has Michigan’s automotive industry after severe declines early in the state’s pandemic mitigation efforts last year.
  • Consumer confidence and the housing market have also remained more resilient than anticipated.
  • New business applications grew dramatically over the past year.
  • The vaccine rollout is gaining momentum.

However, Baruah said that long-standing challenges to economic prosperity such as education attainment are greater because of the disproportionate impact the pandemic has had on certain segments of society. Minorities, minority-owned businesses, small businesses, and industries such as travel and hospitality have been hit particularly hard.

“This “K-shaped” economy refers to the divergence in economic outcomes based on sector or demographics. While many thrive, some only see increased challenges,” said Baruah.

The correlation of wages and likelihood of unemployment to educational level clearly tells the K-shape economy disparity story.

“Persons of color are disproportionately represented in service industry jobs, such as travel and leisure, and workers in this sector make among the lowest wages of any industry – about $18 per hour – making them both more vulnerable to the unemployment line and less able to be financially resilient if unemployed,” he added.

As the region looks to accelerate its recovery, the report provides a critical first step by identifying where the region stands economically.

“This dynamic of those with less formal education faring worse during an economic downturn is certainly not new – we see it every recession. To build a more resilient regional economy and more resilient citizens and families, we need to increase our level of education attainment,” Baruah said.

Quicken Loans’ Chief Executive Officer: Economic Excitement is Building, Detroit Well Positioned

Quicken Loans’ Jay Farner sees excitement about the economy increasing and thinks the city of Detroit and surrounding region are positioned well in the post-COVID-19 era.

“The vaccine and the excitement around the vaccine and what it will do for the economy is starting to kick in. Overall, we are pretty excited for what 2021 will hold for us if we keep on that path,” said Farner, who noted it’s a great time to double down on talent and business attraction and place-making efforts.

Farner, who is also the chief executive officer of Rocket Mortgage, joined ABC News’ Rebecca Jarvis, chief business, economics, and technology correspondent, for a moderated discussion following the release of the State of the Region report.

Here are three other key takeaways from the discussion:

Home prices likely to remain high with low inventory, making it a great time to be a builder.

While mortgage rates have ticked up some, they remain low and more people are borrowing. At the same time, housing inventory remains extraordinarily low with the pandemic creating an increased emphasis on homeownership while slowing new construction.

“We are going to see housing prices continue to rise,” Farner said. “There is a lot of available cash. A lot of people want to buy a home. COVID has put a real emphasis on homeownership and yet inventory will remain low.”

“If you’re a builder, you’re going to have access to capital and great demand. It’s a great time to put shovels in the ground and launch developments,” said Farner. “People are recognizing they can do so much from home and that’s a healthy thing for the housing market for years to come.”

Employee expectations of flexible schedules are here to stay.

Farner predicted that companies that fail to maintain some of the flexibility created by working from home over the past 12 months will struggle and said that reality is driving decisions at the Rock family of companies.

“We’ve made some massive investments in our buildings in Detroit…to go from work places to collaboration spaces,” Farner said. “We see the value of the office more as the catalyst for great ideas and innovative thinking versus the day-to-day work that can be done better at home.”

“That flexibility isn’t going away, I think it benefits our teammates, it benefits our business, it benefits our clients,” said Farner, noting those realities have resulted in his companies investing heavily in technology over the long-term to maintain flexibility and productivity moving forward.

Detroit’s talent attraction efforts benefitting from remote work trends.

Detroit’s competition against other cities for top tier talent is benefitting from the life flexibility created by the pandemic. Farner noted talent is migrating to the city because the cost of living and the quality of life is far better in Detroit than many other locations.

The pandemic is also allowing employers like Quicken Loans or Rock Mortgage to take a different approach to recruiting prospective talent by allowing new hires to test out employment before moving to the area.

“It’s become an even easier way for us to attract talent that isn’t familiar with Detroit, but they become increasingly excited (about it after taking the job),” said Farner.

He also touted similar advantages for homegrown talent.

“Students don’t have to run to the coasts for a job. That allows them to stay here and plant roots, while still working wherever they want to because of the flexibility. That’s a good thing for a city like Detroit, especially considering all the investments we have been making over the last 10 years.”

Detroit Chamber report: K-shaped recovery leaving metro Detroiters behind

Crain’s Detroit Business 

February 25, 2021

By Dustin Walsh

Unemployment and the economy are moving in the right direction as COVID-19 vaccines continue to abate the coronavirus’ destruction.

For instance, new jobless claims in the U.S. were at the lowest point last week at 730,000 since the pandemic recession began in early April last year.

But bubbling underneath the positive developments is a slow-moving economic disaster leaving hundreds of thousands of metro Detroiters behind — a K-shaped recovery.

The region began 2020 with 2.1 million private sector jobs, but closed out the year with only 1.9 million jobs, a 10 percent decrease. And the longer the pandemic continues, the more likely it is that jobs and industries impacted by the coronavirus will see longer-term impact, according to the Detroit Regional Chamber’s State of the Region report released Thursday.

Polling of registered voters in the state shows the disparities in impact from the virus. Roughly 75 percent of those surveyed in December said the pandemic has had a minor or no effect at all on their finances, compared to 24.2 percent of respondents who said it’s had a catastrophic effect. And the latter figure is rising — 23.8 percent of those surveyed indicated a catastrophic impact in May.

“This really shows the K-shaped recovery,” Sandy Baruah, the chamber’s president and CEO, said in a call with reporters. “We hear that ‘COVID is not impacting me,’ but a quarter is saying it’s a major impact and this plays out in the data over and over.”

Those most impacted are also facing a growing housing crisis. About 37 percent of metro Detroit’s households surveyed in December by the U.S. Census Bureau said they are behind on their rent or mortgage and that an eviction or foreclosure is likely in the next two months.

U.S. Census survey data revealed 10 percent of the region’s households are not current on rent or mortgage payments and 37 percent of those people are facing eviction or foreclosure by the end of February.

Yet median sale prices of homes in metro Detroit rose more than 23 percent to $236,300 in the third quarter of last year from the first quarter of 2020. The national median sale price grew only 12 percent. This plays out in new housing permits. Single-family home starts in 2020 remained nearly identical to 2019 compared to multifamily unit starts being down 21 percent in 2020, as those most impacted by the coronavirus crisis are more likely to live in multifamily units.

The “who” of those impacted by the pandemic is clear. It is low-education, low-income people who worked in industries most impacted, like retail, hospitality and health care, according to the chamber’s research.

Michigan workers with at least a bachelor’s degree saw the lowest levels of unemployment throughout 2020, with an unemployment rate rising to only 4.5 percent in December from 1.8 percent in March prior to the pandemic. For those with only a high school diploma, the unemployment rate hit 12 percent in December compared to just 3.9 percent in March.

Of the roughly 189,000 jobs the metro Detroit region lost in 2020, about 81,000 of those came from the leisure and hospitality sector. More than 42 percent of the jobs in the sector, many of which don’t require a degree, have not returned since the pandemic began.

And while education attainment regularly shields workers from recessionary effects, the pandemic has severely impacted college enrollment.

Fall 2020 enrollment at Michigan’s postsecondary institutions fell by 8.6 percent, with community colleges seeing a 13.2 percent decline. And financial factors aren’t the only consideration. The Detroit Promise, a tuition-free program for Detroit residents, reported a 36 percent drop in community college enrollment in the fall, according to the chamber’s data.

“Coming out of every recession we see the people with a lack of skills fall behind,” Baruah said. “We also usually see spike in automation and spike in technology. This time, we’re going to see that spike to a greater degree than in the past because the nature of this crisis is essentially people touching things. So this has already driven spikes in automation where it takes the human element out to future proof companies’ operations.”

Look no further than manufacturing to find the long-term impact. Nationwide, manufacturing jobs have not returned to pre-recession levels during any given recession in nearly 50 years.

Manufacturing jobs in metro Detroit were down by 23,000 jobs in December from March, yet manufacturing output grew to new heights after bottoming out in April 2020. In 2020, the Manufacturing Purchasing Managers’ Index, which measures manufacturing economic growth, contracted in March 2020 after 131 consecutive months of growth, but a score of 60.5 in December, well above the 50.3 score in February. A score above 42.8 indicates growth in orders and output.

So fewer workers, more output.

Jim Malz, Midwest regional executive for Citizens Bank, told reporters on the call that solving the jobs conundrum for those left behind during the pandemic recession will be the region’s greatest challenge. Citizens is the sponsor of the chamber’s State of the Region report.

“I don’t believe (the jobs market) is going to get back to the way it was,” Malz said. “Not all those jobs will stay relevant. But it creates an opportunity though for us to figure out how to reemploy those folks. I think there is a new normal over time. Just the way the behavior of consumers has changed so rapidly. This pandemic has really brought this to the forefront. So how do we employ a certain number of workers going forward? We all have vested interest in making that happen.”

View original article here.

 

Metro Detroit economy hit hard by COVID-19: New report shows where it hurt the most

Detroit Free Press

February 25, 2021

By Adrienne Roberts

The pandemic has impacted the U.S. economy and workers unevenly, and that holds true in metro Detroit, with sectors such as automotive and manufacturing showing resiliency while small businesses and the leisure and hospitality industry getting hit hard.

That’s according to an annual report from the Detroit Regional Chamber that looks at the state of the region’s economy. The report for 2021, released Thursday, focused on the economic impact of the pandemic.

Concerning metro Detroit statistics include:

  • Private-sector jobs are down 10% compared with the same period in 2020.
  • Hotel occupancy rates declined 35.5% in December 2020 compared with the same month in 2019. That exceeded the national decline of 32.3%.
  • Consumer spending was down nearly 20% by the end of December compared with January 2020, and the transportation and arts, entertainment and recreation industries saw the greatest declines, both down more than 60% over that period.

More promising statistics include:

  • The number of new business applications in Michigan increased  42.2% in 2020 compared with 2019, a leading indicator of growth after a recession, the chamber said.
  • In the metro Detroit housing market, single-family homes’ median sale price increased 23.3% from the first quarter to the third quarter of 2020, rising to $236,300.
  • New construction permits in 2020 matched 2019 levels.

“There is often a strong correlation between national economic downturns and deep recessionary periods for Michigan,” Sandy Baruah, president and CEO of the Detroit Regional Chamber, which represents businesses across southeast Michigan, said in a news release accompanying the report.

“However, critical sectors for our economy like automotive, manufacturing and housing have all shown remarkable resiliency.”

Baruah is referring to the Manufacturing Purchasing Managers’ Index, which is based on a survey of manufacturing supply executives. The index showed growth for eight consecutive months, beginning in May through December.

While certain sectors have recovered, many haven’t. More than 500,000 private-sector employees in metro Detroit were unemployed from the start of the pandemic through April 2020, and employment remains below pre-pandemic levels.

In the city of Detroit, the unemployment rate rose from 8.8% in 2019 to 20% in 2020, according to an economic outlook prepared by a group of Michigan universities and released last week. So far in 2021, the jobless rate has declined to 14.3%, but likely won’t return to pre-COVID-19 levels until 2025.

Meanwhile, the number of small businesses open in metro Detroit has decreased by more than 32% as of the end of last year, with a nearly 40% drop in revenues since January 2020, the chamber said.

“COVID-19 continues to leave deep scars on (metro Detroit’s) businesses and communities,” Baruah said.

View original article here.

Michigan Business Leaders Share Experiences from 2020: State of the Region Response

The challenges Michigan business continue to face due to the COVID-19 pandemic are wide and varied. Keeping employees safe, managing technology challenges associated with remote work, and promoting company culture have become even more important over the past 12 months. During the Detroit Regional Chamber’s State of the Region event on Feb. 25, business leaders from the manufacturing, telecommunications, and financial services industry shared how their respective organizations have responded to the pandemic and some of the lessons they have learned. Chamber President and Chief Executive Officer Sandy K. Baruah moderated a panel with Linda Hubbard, president and chief operating officer of Carhartt Inc.; David Lewis, president of AT&T Michigan; and Jim Malz, Midwest regional executive at Citizens.

Manufacturing in Michigan

According to the State of the Region report, Michigan’s manufacturing sector helped lead a strong recovery during the third quarter. Michigan’s GDP initially fell 37.6% from Q1 to Q2 but rose significantly by 44.2% from Q2 to Q3. The U.S. Manufacturing PMI ® (Purchasing Managers’ Index) reported eight consecutive months of growth, rising to 60.5% in December, after the low in April 2020 of 41.7%. All six of the biggest manufacturing industries demonstrated moderate to strong growth in December 2020.

Carhartt’s Pivot Leads to Success

Like all businesses February and March brought considerable uncertainty for Carhartt. How would they manage working from home, manufacturing being shut down, sheltering in place, and closing retail stores? Hubbard shared how Carhartt was able to successfully pivot through a combination of remote work, a safe start to manufacturing, e-commerce, and working with retailers as they began to reopen.

“2020 ended up being a better year than we anticipated in March and April,” said Hubbard. “Carhartt’s pivot led to a better result for the year than they even expected.”

One of the most interesting challenges Carhartt faced was managing their international footprint. Carhartt produces product in the U.S. and in 15 countries around the world. The design team had to accelerate their use of technology to create products. International cross-cultural communications is an art and not a science, but Carhatt was able to navigate their relationship with partners by having well-established relationships that they will continue to rely on while they still have to collaborate remotely.

Technology Critical for Remote Work

Telecommunication and technology companies were critical in helping workers transition to remote work during the pandemic. The Chamber’s report shows how the Detroit Region began 2020 with 2.1 million private-sector jobs. By April 2020, private sector jobs had reached a low of 1.5 million, a loss of over 556,000 jobs over two months. Month-over-month job gains leveled off through the year with a December 2020 job total of 1.9 million, a 10.0% decrease over the beginning of the year.

AT&T Keeping the Businesses Connected

Lewis highlighted the seriousness that his organization took over the past year to ensure people had the ability to reliably work remotely. At the outset of the pandemic, one area of concern was how internet connectivity would be impacted by millions of people moving from their offices to homes. Bandwidth had been engineered for larger capacity connectivity at offices; however, AT&T was able to quickly find design solutions for the work-from-home environment.

“Our job is to help people connect where they need to be,” said Lewis. “As AT&T looks to the future and the workforce, it is important that people are technically ready to operate at home, in the office, or on-the-go.”

Lewis also spoke about how important it was for AT&T, other businesses, and government leaders to help close the digital divide so that the students of today are ready for the jobs of the future.

Small Business Hit Hard

The State of the Region report highlighted how, as of the end of December, the number of small businesses open in the Detroit Region decreased by 32.6%, with a nearly 40% drop in revenues since January 2020. One of the most important lifelines for businesses was the Paycheck Protection (PPP) loans to help pay employee salaries as consumer spending dropped.

Citizens Supporting Clients

For Citizens, communication was critical for employee and client success. The transition to being out of the office, where employees could not meet with each other or visit clients was difficult at first. However, it became clear that clients needed more guidance and support than ever. Malz outlined how his team used culture and communication to navigate the financial hurdles of the pandemic, “Culture is the secret sauce for any company. Leaders must be empathetic.”

Citizens made more than 6,300 PPP loans equal to more than $400 million, helping to save more than 53,000 jobs in Michigan. Across their national footprint, they provided more than 50,000 PPP loans equal to more than $4.8 billion, helping to save more than 540,000 jobs.

Echoing findings from the State of the Region report, Hubbard, Lewis, and Malz all emphasized that despite the challenges of COVID-19, their businesses and the economy as a whole have shown resiliency.

Feb. 26 | This Week in Government: $2B Senate Supplemental Passes Following Contentious Floor Debate; Low Percentage of Black Michiganders Vaccinated

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. $2B Senate Supplemental Passes Following Contentious Floor Debate
  2. Low Percentage of Black Michigan Residents Have Received COVID Vax
  3. MDE to Talk With Feds on Waiving Standardized Testing Requirements
  4. Whitmer Hints at Loosening Restrictions, Addresses Extension
  5. New Districts and a Grassroots Effort: How Dems Hope to Win in ’22

$2B Senate Supplemental Passes Following Contentious Floor Debate

A bitterly divided Senate Thursday debated and, along party lines, passed two supplemental appropriations bills meant to address the coronavirus pandemic while further exposing the gulf between Republicans and Democrats over the policy and fiscal approach to addressing the ongoing public health and economic crises.

The debate over the nearly $2 billion approved in the bills saw disagreement on removing the social vulnerability index that Michigan uses to distribute the coronavirus vaccine and over the level of federal funding. It then included some personal attacks on past comments about the Legislature being “neutered” and “emasculated” by the governor and her administration during the pandemic response.

The two supplementals, SB 29 and SB 114, passed 20-15 along party lines. Democrats proposed 10 amendments to SB 114, each of which were rejected, largely along party lines.

As passed by the Senate, SB 114 contains gross spending of about $727.8 million ($55 million General Fund).

The bill contains $445.2 million ($55 million General Fund) for the Department of Health and Human Services, with the rest being federal funding for purposes including epidemiology and laboratory capacity as well as COVID-19 vaccine grants.

The bill also includes a pay increase for direct care workers of $2.25 per hour from March 1 through September 30.

A total of $282.6 million federal funds is included for the Department of Labor and Economic Opportunity, of which $220.3 million is for emergency rental assistance, and another $62.3 million for administrative costs of disbursing the rental assistance.

There is about $1.246 billion gross spending contained in SB 29, of which $807.3 million is federal Elementary and Secondary School Emergency Relief funds, $125.2 million in federal Governor’s Emergency Education Relief funds and $313.5 million from the School Aid Fund.

The proposed federal ESSER funding is for Title I distributions while a portion designated as discretionary and offers more flexibility would be used for providing equity to districts where the per-pupil allocation otherwise is less than $450.

Additional School Aid Fund appropriations would be split between several priorities under SB 29 including various summer school and credit recovery programs as well as school mental health services.

Sen. Jim Stamas (R-Midland), sponsor of both supplementals, called the proposal before the chamber the latest in a multi-billion-dollar pandemic response to date that targets immediate needs.

“It helps meet the dire needs that face the state and our people while also being smart in how we spend federal assisted dollars instead of issuing a blank check to the governor to use without detailed plans,” Mr. Stamas said. “Our plan funds our state’s most pressing needs and saves additional resources so we can continue to assess the situation and have the ability to respond to problems as they arrive.”

Democrats have noted the federal funding comes with its own set of strings and accountability, and cannot be spent on whatever the administration chooses.

Mr. Stamas said the plan provides $20 million more for testing, provides education funding, increases pay for direct care workers, provides emergency rental assistance and addresses several other key priorities.

In a phone interview later Thursday, Mr. Stamas said the House and Senate are “very close” on finding agreement on a supplemental package and his hope is to get the legislation to Governor Gretchen Whitmer as early as next week.

Particularly heated debate erupted over an amendment in SB 114 that would strip the social vulnerability index from the process the state has been using for the distribution of the coronavirus vaccine to state residents. Proponents contended that removing the index would get the vaccine to the older vulnerable population. Democrats rejected the notion, saying communities of color and the poor are among those most impacted by the pandemic.

Sen. Jim Runestad (R-White Lake), one of the sponsors of the amendment to eliminate the index, reiterated his stance that getting the vaccine to those over age 65 is the priority, not race, gender or socioeconomic status. He referenced moves by the city of Detroit offering vaccines to lower priority individuals including those with intellectual or developmental disabilities.

“Meanwhile, the vaccines are short in Oakland County. Seniors in my district have been screaming for this vaccine,” Mr. Runestad said. “When seniors are most at risk to COVID and are struggling to get the vaccine, the state of Michigan is failing them with their social engineering policies. … This is what happens when politicians or bureaucrats start making decisions on politics and not science and common sense.”

The comments drew rebukes from Democrats, including Sen. Stephanie Chang (D-Detroit), who noted that the concept of social vulnerability is not new.

“We’ve already been doing a lot of social engineering in our country, because we haven’t dealt with systemic racism or systemic sexism, or any of these things,” Ms. Chang said. “I feel like you really, really need to sort of repeat some history lessons here if we’re going to talk about social engineering.”

Sen. Tom Barrett (R-Charlotte), who was the other proponent of the amendment to strip the index, said his interest in the issue came after the recent dispute between the mayor of Detroit and the Macomb County executive over vaccine allocations levels. He said it was ridiculous that there was the large number of vaccine doses being distributed to Detroit while not far from the city elderly individuals have been clamoring for vaccine access.

“The language we have included in this bill is sound and it is simple,” Mr. Barrett said. “It requires the department to use the estimated number of people in each priority group to distribute the vaccine.”

He rejected arguments that he was being racist with the move, pointing to the 2006 vote changing the state Constitution eliminating race-based preference in hiring and university admissions.

Sen. Erika Geiss (D-Taylor) took aim at Mr. Barrett in response, saying the index is specifically intended to help impacted communities like those of color in Detroit that were ravaged by the virus, especially early in the pandemic. She pointed to people outside of Detroit in places like Mr. Barrett described thinking that the virus was a hoax early on before it hit the entire state.

“And now you want to jump to the front of the line? It’s absolutely unconscionable,” Ms. Geiss said.

During the debate there were calls by Republicans to lift the remaining restrictions on sectors of the economy and schools.

Sen. Kim LaSata (R-Bainbridge Township) did not say much directly to the bills before the chamber in brief remarks but instead directly issued a plea to the governor to lift the remaining restrictions in the state.

“Free our state,” Ms. LaSata said. “Please, open up our businesses completely. Allow those business owners, allow the people of Michigan, to do what they know best. Treat them like adults. We are adults. Please let us make our own decisions.”

Sen. Curtis Hertel Jr. (D-East Lansing) was among Democrats who bashed the Republicans for not including all of the federal funding up front.

“I hear your frustration when you say things like you want to open Michigan and all that. Nobody likes this,” Mr. Hertel said. “But under what principal idea do you think that withholding money for vaccines and testing will actually get us to the end of this pandemic quicker?”

Mr. Hertel then took aim at comments made by Sen. Ed McBroom (R-Vulcan) during past floor debates in which he had said the Legislature is being “neutered” and “emasculated” by the governor in the pandemic response process. This prompted one of the most unexpected remarks of the debate.

“I mean, I went online last night and if it will make people feel better and we can get the help we need for people I am more than happy to purchase neuticles for anyone who feels like they have lost something in the process,” Mr. Hertel said. “But we can’t keep fiddling while Rome burns.”

Neuticles are prosthetic testicular implants that can be purchased for neutered dogs or other domestic animals.

Later Mr. McBroom during a fiery floor speech pushed back at Democrats over calls to spend all the federal funding. He said he supported using oversight in doling out the federal funds and making sure it is being used appropriately.

“Spend money, demand more money, as if money were some magic bullet that’s been missing and when it comes to solving our pandemic. And what’s more, it’s all about giving the money without caution,” Mr. McBroom said.

He then unloaded on Mr. Hertel over his earlier comments.

“This is the neutering that I’ve been talking about. This is the emasculation that I’m talking about, the willingness of my fellow senator, to not stand up for this institution, our corporate willingness as an institution to allow another to take our job, take our duty, take our responsibility, take our power from us,” Mr. McBroom said. “Far from me needing to find what I’ve lost, I ask the one who misrepresented my remarks, mischaracterized them, to take his own offer and find it for himself.”

Democrats during floor speeches pushing for failed amendments urged the use of all of the federal funding provided to the state.

Sen. Rosemary Bayer (D-Beverly Hills) said she could not vote for legislation that she believed fundamentally flawed in that it does not provide all the available federal funding for schools. An amendment she proposed to allocate all of the federal funding for schools failed.

“It’s not our money to hold on to,” Ms. Bayer said. “It’s not ours to be dribbling it out, to distribute it as if we were the parents handing out allowance. Our schools are not children.”

Sen. Jeff Irwin (D-Ann Arbor) proposed an amendment that failed to provide all federal funding for emergency evictions. He said thousands have been evicted in the time the Legislature has spent waiting to put forward supplemental proposals.

“This Legislature needs to wake up and treat this emergency like an emergency,” Mr. Irwin said. “Congress has given us these tools to address this emergency with our renters and now it is our time to do our part and simply help our people. The emergency is now, not months from now.”

Ms. Geiss, before session took one last shot at Republicans.

“Let today, February 25, 2021, go down in history as the date when, in the wake of a public health crisis of the COVID-19 pandemic, the majority of this chamber said to the people of Michigan: ‘Qu’ils mangent de la brioche,’ or rather ‘let them eat cake,'” Ms. Geiss said, referencing an infamous phrase attributed to late 1700s French Queen Marie Antoinette, a remark in response to the starving of the people, in the period before the French Revolution.

HOW HOUSE PACKAGE COMPARES: The supplemental package (HB 4019, HB 4047, HB 4048 and HB 4049) that recently passed the House includes a requirement that funding would be provided with the condition that only local health departments – and not the state – can close schools to in-person learning and halting sports events. The Senate package does not contain the requirement.

Under HB 4049, local health departments would have specific metrics that would have to be reached for schools to close in-person instruction or stop sporting events. They are:

  • Confirmed local COVID-19 cases were above 55 per 100,000 within a 14-day period;
  • The positivity rate for COVID-19 in the area was above 10 percent within a 14-day period;
  • Surge capacity for each local health facility was at 20 percent; and
  • Hospitalizations increased by 25 percent during a 14-day period.

The statistics would not be able to include those in jails, prisons or congregate care facilities and for multi-county health departments, the criteria would need to be met in all counties under its jurisdiction.

Numerous other differences are included in the House package.

Under HB 4019, $868.6 million in federal funding was included. Among the funding was $510.7 million for Supplemental Nutrition Assistance Program benefits, $143.7 million for coronavirus testing and contact tracing, $165.2 million for emergency rental and utility assistance, $22.6 million for vaccine distribution, $13.1 million in federal block grants for substance abuse treatment and $13.1 million for federal block grants for mental health.

One bill, HB 4047, was substituted by the Senate Appropriations Committee Trackand contains about $593.29 million gross ($576.95 million General Fund). It did not come up for a floor vote Thursday.

The bill would eliminate 63.8 full-time staff positions. One removed staff member would be from the Department of Agriculture and Rural Development, 39.4 staff from the Department of Labor and Economic Opportunity and 23.4 staff from the Department of Licensing and Regulatory Affairs.

The Senate also increased spending for the Department of Health and Human Services by $26.7 million federal funding. This includes $17.4 million for community substance use disorder prevention, education and treatment as well as $8 million in mental health block grants and $1.3 million for congregate and home-delivered meals, or Meals on Wheels.

A $150 million General Fund deposit into the Unemployment Compensation Trust Fund that was included in the House version remained in the bill, as did $393.5 million got tax and fee relief for businesses impacted by the pandemic.

For HB 4048, a total of $1.78 billion is included for school funding, of which $363 million in School Aid Fund was included for the per-pupil increase for schools that went back to in-person instruction February 15. The House proposed $1.5 billion in federal Title I be provided.

A total of $86.8 million for nonpublic schools is provided, as does the Senate. The House also proposes using $157.4 million for virus remediation services including summer programs as well as $21.3 million for teacher and school staff incentive payments. The remediation funding and incentives are similar in size to the Senate proposal.


Low Percentage of Black Michigan Residents Have Received COVID Vax

New racial demographic data added to the state’s online coronavirus vaccine dashboard shows that less than 4% among more than half of all residents who have received the vaccine and provided information about their race identify as Black.

The data, announced Tuesday in a news release from the Department of Health and Human Services, also shows that aside from the 3.7% who identified as Black, at least 41.7% of those who provided demographic data identified as being white.

As of Monday, a total of 1.25 million Michigan residents had received at least one dose of a COVID-19 vaccine. Of that population, 547,163 did not record any demographic information on associated paperwork.

But 56% among the 1.25 million – or a little less than 701,400 – did provide some sort of demographic data, which is a number DHHS said Tuesday that it was actively working to improve.

The dashboard shows that 9.5% listed their race as other, 1.1% identified as Asian or Pacific Islander, and 0.3% listed their racial makeup as being Native American or Alaskan Native. Another 43.7% were listed as belonging to an unknown race, the data shows.

In a statement, Dr. Joneigh Khaldun, DHHS’s chief medical executive and chief deputy for health, said ensuring those who are most vulnerable or those belonging to minority populations remains a priority in the department’s vaccine strategy.

“Black and brown communities have been disproportionately affected by the virus and improving the race and ethnicity data being collected for vaccinations is critical for ensuring the equitable administration of the vaccine,” Khaldun said. “We will use this data to continue to drive our strategy towards making sure everyone has equitable access to the vaccines.”

Khaldun added that she urges all recipients to fill out race data portions of vaccine paperwork so the state can better track which demographic is receiving the vaccine and in what frequency.

The dashboard also notes that white Michiganders have the highest vaccine initiation and completion rates (7.9% and 4.7%, respectively), followed by Native Americans or Alaskan Natives (5.4% and 2.8%) Asian, Native Hawaiian, or Pacific Islanders (5% and 3.6%) and then Black residents at 4.1% initiation and 1.6% completion.

Overall coverage rates have also been added to the dashboard by county, which shows that 15.1% of residents are in the initiation process and 8 percent have completed both doses.

A direct entry tool is also now live on the dashboard, allowing information to be entered into the Michigan Care Improvement Registry. Immunization providers across the state are also being asked to submit race data for all administered vaccines.

PILOT PROGRAM TO INFORM COVID-19 VACCINE EQUITY STRATEGY: DHHS on Tuesday also announced the launch of a new program aimed at enhancing equity in Michigan’s coronavirus vaccine strategy by reducing barriers to doses for vulnerable adults ages 60 years old and up.

Medical providers who are federally enrolled to administer COVID-19 vaccines can apply for inclusion in the community outreach pilot which would make each accepted provider able to request 2,500 doses. The application deadline is March 1.

“We want to make sure all Michiganders have access to the safe and effective vaccines as we work toward our goal of vaccinating 70% of Michiganders age 16 and up as quickly as possible,” Khaldun said in a statement. “We are working hard to eliminate any barriers to vaccine access. Your ability to get a vaccine should not be impacted by whether you are in a rural or urban part of the state, are lower-income, or don’t have access to a car, a computer, the Internet, or don’t speak English. This is what equity means.”


MDE to Talk With Feds on Waiving Standardized Testing Requirements

Officials with the Department of Education say the agency will be “initiating discussions” with the U.S. Department of Education to allow Michigan the ability to waive the federal requirement for statewide summative assessments this school year altogether, despite the federal agency communications this week on the importance of the testing.

The USDE Monday explicitly emphasized that states will not be able to request blanket waivers of assessments, but that certain flexibilities will be offered to states such as how and where an exam is administered, among other things.

On Wednesday, Superintendent of Public Instruction Michael Rice said in a statement that most of Michigan’s students have received inconsistent to no instruction in an in-person format for the current school year and that when children return to the classroom “the focus should be on teaching and learning …rather than on preparing for and taking state summative assessments.”

“With a majority of our kids at home, with the challenges of getting kids back in school, and with the need for more instructional time to maximize academic and social and emotional focus and growth, this is not the time to engage in state summative assessments,” Rice said. “We are able to discern where kids are academically for parents and for educators with our benchmark assessments, and we can use the assessments to target resources, interventions, and supports for our kids in our districts.”

MDE also said that Monday’s guidance was not a blanket acceptance or rejection of anything, “but instead an opportunity to submit state-specific waiver considerations.”

The department had previously requested a waiver from the federal government regarding the requirement to administer statewide summative assessments to Michigan students this spring, and from school accountability measures resulting from those tests. A response to the request, sent in January, is still pending. Until that flexibility is granted, however, MDE indicated it will continue to prepare for the administration of the state’s M-STEP assessments.

The federal memo did indicate that schools would be able to request a waiver for the 2020-21 school year regarding accountability and school identification requirements in the federal Elementary and Secondary Education Act of 1965.

“We also recognize that individual states may need additional assessment flexibility based on the specific circumstances across or within the state, and we will work with states to address their individual needs and conditions while ensuring the maximum available statewide data to inform the targeting of resources and supports,” U.S. Department of Education Acting Assistant Secretary Ian Rosenblum wrote in Monday’s guidance.

Officials with MDE noted that as the department has only reached out to USDE this week, it is “the beginning of a new part of a process that could take some time.”

“The letter says there’s going to be no cookie-cutter approach like there was at the beginning of the pandemic last year,” Rice said. “What USDE basically said was that it is open to considerations on the accountability side and a little less open on the assessment side.”


Whitmer Hints at Loosening Restrictions, Addresses Extension

As the state’s coronavirus metrics continue to improve, Gov. Gretchen Whitmer said Wednesday she might loosen more of the restrictions her administration has implemented to slow the spread of the virus.

But she offered no detail as to what might be coming.

The Governor, at a news briefing, was asked about raising limits for restaurants (now capped at 25% of capacity), easing nursing home visitation restrictions, and allowing larger gatherings (indoor gatherings have long been capped at no more than 10 people). She declined to say other than to signal actions are likely forthcoming.

“You probably would conclude justifiably that in the coming days we will be assessing and making more determinations on a number of fronts,” she said.

Gov. Whitmer also addressed criticism she and her administration received about extending the restrictions through March 29 without an announcement.

The latest epidemic order keeps the limitations in place until March 29, far longer than the Feb. 21 expiration date announced in the Jan. 22 order. A new order was issued Feb. 4 when it was announced contact sports could resume earlier this month that included the extension of restaurant restrictions through March 29. In general, the epidemic orders have lasted two to three weeks before being revisited and it is unclear why the current limitations are set to go for so long.

“I was a little surprised by the reaction to tell you the truth,” Gov. Whitmer said.

However, the Governor’s explanation seemed at odds with the nature of the order. She said during the pandemic, her administration has usually waited three weeks after loosening or strengthening a restriction to observe the impact on the coronavirus.

“That’s no different in this case, so frankly I was a little bit surprised by the kind of characterization of it,” he said. “We’ve been very open. We’ve been sharing data every step of the way.”

Except only 13 days had passed – not three weeks – from the January 22 order’s setting of a February 21 expiration date when the Department of Health and Human Services then extended the duration of the order by five weeks.

Nonetheless, with Michigan now at a positivity rate of 3.5%, the Governor said the state is moving into a stronger position and should be able to announce loosening of some restrictions.


New Districts and a Grassroots Effort: How Dems Hope to Win in ’22

The dismantling of gerrymandering through the new independent redistricting commission and keeping momentum among its grassroots voting base are two of the key components Michigan Democratic Party Chair Lavora Barnes sees as ways the party can win big in 2022.

Barnes, who was reelected Saturday to her second term as MDP chair, said her focus at every level of the party will be to capitalize on the momentum of the 2020 presidential election and apply that to the midterm. Come November 2022, she said she hopes to keep the trifecta of state offices – the governorship, attorney general, and secretary of state – while making significant gains in the state House, aided in part by whatever future redistricting holds for Michigan Democrats.

Whether that will be possible remains to be seen, but in an interview with Gongwer News Service Monday, Barnes said she is not writing off a single possibility as of now.

“I have faith that the Independent Citizens Redistricting Commission, they will draw fair districts,” she said. “I’m excited that drawing the districts has come out of the hands of politicians who represent those districts … We’re not giving up on any district. We are not. We believe that we will have a chance to win in each and every fairly drawn district.”

In 2018, Democrats swept the top state offices, electing Gov. Gretchen Whitmer, Attorney General Dana Nessel, and Secretary of State Jocelyn Benson. They also flipped the historically red 8th U.S. House District in favor of U.S Rep. Elissa Slotkin (D-Holly). The 11th U.S. House District, too, was a major win for Democrats during this time, as it had also been predominantly held by Republicans.

That momentum stalled somewhat in 2020 as voting turnout skyrocketed, following the passage of no-reason absentee voting in 2018. Areas of the state that had traditionally leaned more conservative – the 3rd and 8th districts – saw the gap shrink between Democrats and Republicans in the November election, with more individuals going blue on the presidential ticket than in years prior. The 11th District, which backed former President Donald Trump in 2016, went Democratic in 2020.

However, the environment was not as favorable for Democrats as 2018 with U.S. Sen. Gary Peters (D-Bloomfield Township) narrowly surviving a fierce battle and Democrats failing to narrow the gap in the Michigan House. The parties also split races for the statewide education boards.

Barnes credited gains to a heavy emphasis on grassroots support, which she hopes to double down on in 2022. The key, she added, is for the party to continue person-to-party interaction, so that the average voter is aware of what Democrats are doing in the Legislature, what Republicans are not, and who the party is supporting to oust that member of the GOP.

A portion of these results are due to the expansion of absentee voting in Michigan, but another portion too is due to the backlash against Trump, which allowed top-of-the-ticket Democrats to benefit from anti-Trump sentiments. Voters turned out in record numbers for the 2020 presidential election, but some were solely there to vote Trump out of office – regardless of their typical political affiliation – and it’s apparent, considering the lack of expected success Democrats had at the state level in 2020.

Grassroots efforts expected to yield gains for Democrats during that election cycle did not pan out as the MDP would have hoped. While the party flipped the 38th and 61st House Districts, Republicans flipped the 48th and 96th Districts, knocking out two Democratic incumbents, and held onto other key seats to maintain majority for the sixth election in a row.

Gov. Whitmer will be the first governor to seek reelection with a president of the same party in the White House since 1974. On the one hand, the president’s party historically fares poorly in midterm elections in Michigan. On the other hand, the Governor’s party typically does well when the Governor is seeking re-election, making for a mixed outlook on what the 2022 environment holds. At minimum, it appears highly unlikely to be as favorable to Democrats as 2018 was.

Asked why she’s confident this time around the results will be different, Barnes said there were a few variables at play, in addition to redistricting, including a number of disenfranchised Republicans who may not be thrilled at the direction the state (and national) GOP is heading.

Capitalizing on that availability, especially if these voters live in red areas of the state, would help bolster the Democratic base and bode well for redistricted jurisdictions if the MDP could continue to keep those voters blue.

“The folks who are best to court those voters are our candidates …they will be the ones to reach across and bring those folks over to vote for Democrats. There’s absolutely possibility there,” Barnes said. “I’m certain that there are many, many Republicans who are watching what’s happening to their party and not recognizing it anymore. …I think that there will continue to be members of that party or folks who would be members of that party start to turn away from that and turn towards Democrats. Absolutely.”

As to how the MDP could court these voters while not alienating the further left progressives, Barnes said the party has “a big tent” and that while “it’s always a challenge for us to make sure all voices are heard, we do it.”

It’s the same idea that Republicans have had in recent months – that the movable middle, or a person who votes not necessarily by party affiliation but based on the candidate themselves, is the key to winning Michigan in 2022.

She also defended Democrats’ inability to take back the state House by saying that gerrymandering throughout Michigan made it difficult to break conservative strongholds. Redistricting, Barnes said, will adjust that.

“We ran in the gerrymandered districts all over the state and these districts are about to change,” she said. “The mechanisms of grassroots organizing and conversations with voters will remain the same. …The big difference between 2020 and 2022 will be what the districts look like, and these fairly drawn districts will make such a difference in our ability to move.”

One reason for caution about what redistricting could mean, however, is the outcome in the 39th and 45th House Districts in Oakland County. President Joe Biden carried both districts, but the Democratic House candidates down the ticket ran well behind him, and Rep. Ryan Berman (R-Commerce Township) and Rep. Mark Tisdel (R-Rochester Hills) ran well above Trump to win those seats.

But Barnes’s emphasis on redistricting being a net positive for Democrats doesn’t mean they won’t lose anything in the process. Future maps will more than likely entail the party losing a U.S. House seat. There are four Democratic U.S. House members living in Oakland County, and one of them almost certainly will have to move, run in a district where they do not live, or face off against another member in a primary.

For state lawmakers, effectively anything north of Clare – at least 15 state House seats – will all but certainly remain in Republican hands even with new maps. Even the Marquette seat, the last Democratic enclave in that region, could be at risk with Rep. Sara Cambensy (D-Marquette) unable to run again because of term limits.

To that, Barnes cautioned counting anyone out due to the region of the state in which they live, adding that she saw several areas of the state – at the U.S. House level, especially, in the 3rd and 6th U.S. House Districts – that the party could win following redistricting.

“The mistake that some people make is assuming that parts of the state can be and should be written off by the Democratic Party – but they will not be, and they cannot be,” Barnes said. “It is our goal to find each Democrat, wherever they are in the state … There are enough, and we will find them and help them understand the importance of voting in the 2022 election and voting in local elections.”

Gov. Whitmer Delivers Remarks Before U.S. Senate Committee on Environment and Public Works

LANSING, Mich. – Gov. Gretchen Whitmer today delivered remarks before a virtual hearing of the United States Senate Committee on Environment and Public Works entitled, “Building Back Better: Investing in Transportation while Addressing Climate Change, Improving Equity, and Fostering Economic Growth and Innovation.”

View the live stream: https://www.epw.senate.gov/public/

See below for the Governor’s remarks as prepared for delivery:

WRITTEN TESTIMONY
OF
Gretchen E. Whitmer
Governor, State of Michigan

HEARING ON

“Building Back Better: Investing in Transportation while Addressing Climate Change, Improving Equity, and Fostering Economic Growth and Innovation.”

Committee on Environment and Public Works

United States Senate
Feb. 24, 2021

Mr. Chairman, Ranking Member Capito, and Members of the Committee, thank you for the invitation to testify before this, your first legislative hearing of the 117th Congress. I am more than pleased to appear before you today about what’s possible if we work together to address issues head-on, and how a commitment to investing in transportation and leading on climate change and equity are pathways to economic growth and innovation, not only in my state, but also across the country.

Since taking office, my administration has been focused on taking bold action to build – and rebuild – a better Michigan. Our focus and investment on improving critical infrastructure has not waned during the unprecedented COVID-19 pandemic, and I welcome all to the table, like this Committee and all our federal partners, who can help us achieve our goals.

Rebuilding Michigan

It is important for me as the “Fix-the-Damn-Roads Governor” to start by saying that we need significant investments in our roadways and bridges. Without this significant investment, we struggle to remain competitive for businesses and families. According to TRIP, a national transportation research nonprofit, a total of 43 percent of Michigan’s major roads are in poor or mediocre condition and driving on deteriorated roads costs Michigan motorists $4.67 billion a year – $659 per motorist – in the form of additional repairs, accelerated vehicle depreciation, increased fuel consumption, and tire wear.

At the start of my term, I unveiled a proposal to raise the state gas tax, which would have generated $2.5 billion a year to fix the state’s crumbling roads. Unfortunately, bipartisan consensus in Lansing could not be found to support it. Doing nothing isn’t an option for me, so that’s why I put forward “Plan B” – a $3.5 billion bonding program called “Rebuilding Michigan” to help rebuild the state highways and bridges that are critical to the economy and carry the most traffic. This is being done without raising taxes and will support thousands of good-paying jobs for our hardworking union construction workers in the state.

The first $800 million of the Rebuilding Michigan bond issuances closed last September. As a testament to the Michigan Department of Transportation’s (MDOT) creditworthiness and our timing, that $800 million in principal generated $1.1 billion in bond proceeds. Investors paid a premium, acknowledging strong endorsements of ratings agencies. The investment strategy is aimed at fixes that result in longer useful life and improves the condition of the state’s busiest commercial and commuter corridors. Rebuilding Michigan allows MDOT to rebuild major segments of highly traveled interstates in Michigan, such as I-69, I-75, and I-94, as well as several other busy freeways. When all of the $3.5 billion in bonds are sold over the next few years, they will finance or help accelerate rebuilding or major rehabilitation of hundreds of major highway segments across the state.

To be sure local infrastructure needs are also addressed, I have put forward a plan to repair or rebuild hundreds of local bridges. Michigan has approximately 1,000 local bridges in poor or critical condition, many of which have load restrictions and 59 of which are completely closed because they are no longer safe for traffic. Closed bridges, whether in urban or rural areas of my state, not only adversely affect personal mobility, but they also slow our economic recovery by impeding the flow of agricultural products to market, raw materials like lumber to paper mills, and the movement of materials and products associated with our manufacturing industries. As part of my budget proposal to the Michigan State Legislature this year, I have requested approval of a supplemental budget authorization of $300 million of our state’s precious general funds to start chipping away at this backlog and reopen the closed bridges. Building off a successful local bridge bundling pilot project led by the MDOT, in collaboration with our county and city road agencies, this new investment by our state will make a measurable impact. But it is not enough.

Just as the State of Michigan seeks to be a good partner with our local road agencies, we also have sought to be an innovative partner in high profile projects of great promise. For example, we have partnered with Canada to deliver the Gordie Howe International Bridge project. Construction of the bridge – which will link Windsor and Detroit, Ontario and Michigan, and Canada and the United States – is well underway. The Gordie Howe International Bridge will greatly enhance the flow of commerce throughout our entire region and, in particular, with Canada, our most important trading partner; Michigan exports nearly $25 billion in goods to Canada annually, representing 41 percent of the state’s total goods exports. Making this state-of-the-art international border crossing a reality requires a collaborative effort with another government and many other stakeholders. We have a good record of forming successful partnerships to achieve shared goals, but we need focused, long-term, and sustainable funding sources for continued progress on the infrastructure front. The status quo cannot be an option.

Investing in Tomorrow, Today

For too long, there has been a misconception that you can either have environmental protections and public health safeguards or economic growth and good-paying jobs. This is not a binary choice. In fact, the health of our economy is inextricably linked to the health of our people and our planet. This can be a challenge, but we can manage it if we work together.

In industrial states like Michigan, we have seen the loss of jobs to automation, modernization, and market changes. But our economy is vibrant. Michigan is not just the auto capital of the world, we’re the advanced mobility leader. Since I was sworn into office, I’ve announced more than 11,400 new good-paying auto jobs. We’ve also committed to decarbonizing the state economy-wide by 2050 – and for the state that put the world of wheels – that means aggressively advancing the future of mobility and electrification. Mobility solutions are climate solutions.

Transportation is the biggest source of climate pollution in America. Focusing on electric trucks, buses, and cars – and the batteries that will propel them – will create jobs for the future, clean the air, and help us compete with Europe and China in this rapidly expanding market. Michigan is leading the way in this work.

My state is home to the richest cluster of engineering talent in the country and has the world’s most diverse collection of autonomous vehicle testing environments, such as the American Center for Mobility, for both early- and later-stage technologies. Assets like these have helped us attract billions in new investments to fund innovative mobility projects, leading to new technologies being developed and deployed in our state and expanding on our traditional strength in the automotive sector. For example, Michigan is developing a first-of-its-kind, 40-mile driverless vehicle lane between Detroit and Ann Arbor, is working towards building an electric vehicle charging network that connects the entire state by 2030, and has the largest deployment of a Vehicle-to-Infrastructure (V2I) communications network in the world, covering over 500 miles of roadway.

We must work together, not just to fix our failing infrastructure, but to modernize it in ways that leverages new technologies, transforms communities, balances the safety of all users, and facilitates the transformation to connected, autonomous, shared, and electric vehicles. We can lead the world on autonomous and electric vehicles, or we follow. Investing in needed infrastructure will play a critical role in making us – our country – a winner in this space. This is our moment.

Federal Support for States

To effectively rebuild our infrastructure while concurrently supporting our economic growth, states need a supportive and productive partnership with our Federal Government.

The COVID-19 pandemic has had a devastating impact on Michigan’s transportation revenues. Our state lost 7.4 percent of expected state Michigan Transportation Fund revenue in fiscal year 2020 and anticipates it will lose another 5.1 and 4.8 percent in revenue in both fiscal year 2021 and 2022, respectively. Michigan, like so many states, desperately needs federal assistance to support its transportation and infrastructure goals and needs.

That is why it is imperative for Congress to enact a timely reauthorization of long-term federal surface transportation legislation with funding that is both predictable and sustainable. Funding stability provided by federal transportation programs is crucial for Michigan’s extensive capital investment needs, the needs which take multiple years to plan and construct, especially during a time of financial duress. Short-term program extensions are damaging because they can cause unnecessary program disruptions and delay essential safety and mobility benefits to Michigan communities.

A key feature of reauthorization should be shoring up and stabilizing the Highway Trust Fund. Now how to get there has been debated for years as we all know, and I am not before you today with the answer, but we know that for too long, the Trust Fund has been kept artificially solvent by the transfer of general funds. While often necessary and helpful to stave off crisis, that is not sound budgeting or good policy.

As a governor who has been forced to transfer general funds to Michigan roads to prevent further decline, I understand these pressures firsthand.

As you look to craft your reauthorization bill this year, I would ask you to support bold action to reduce carbon pollution from transportation and prepare our transportation system for climate change impacts that are unavoidable. We welcome efforts that can incentivize climate mitigation and resilience in formula and competitive grant funding and support the full transition to electric. With domestic automakers in my state pledging billions to develop and sell more electric vehicles in the coming years, the effort made by this Committee in 2019 to create new competitive grants for alternative fuel infrastructure – a $1 billion program for states and localities to build alternative fueling infrastructure along designated highway corridors – is especially relevant, important, and needed.

As mentioned above, it is tremendously important to incentivize resilience in transportation investments so that the impacts of climate change can be better weathered. Congress should expand infrastructure betterment eligibility, which would make it easier for states to incorporate resilient design and infrastructure materials when using Emergency Relief funds after natural disasters. A federally declared flooding disaster event last year washed area roads and two dams in mid-Michigan, causing immense damage and strife as the state was in the middle of dealing with the COVID-19 pandemic. An expansion of betterment eligibility would allow us to, as we rebuild, improve the resilience of Michigan’s infrastructure against future extreme weather events.

Vision for the Future

When talking about investing in transportation, we need a national vision that invests in innovative transportation ideas and needs across our country, much like the Interstate system did 65 years ago, and makes us the envy of the world.

In order to make our economy more equitable for workers and address issues like climate change head-on, we need your help. We need to ensure that these transitions are equitable, and that policies to protect workers and communities are put in place early so we can stop them from being left behind or displaced. This includes workforce investment to ensure the workforce of tomorrow is prepared for a changing transportation sector.

In Michigan, we have recognized that we need more skilled workers, which is why I launched the 60×30 initiative, setting the goal of having 60 percent of Michigan’s workforce obtain a post-high school degree or certificate for an in-demand skill by 2030. We welcome Federal Government support to help us achieve this goal by providing funding for critical workforce and education initiatives. Last year, we announced the Future for Frontliners program, a scholarship program for Michiganders without college degrees who worked in essential industries during the state COVID-19 shutdown in the spring of 2020. The program will provide these frontline workers with tuition-free access to local community college to pursue an associate degree or a skills certificate, either full-time or part-time while they work.

Additionally, our innovative post-secondary programs in Michigan, such as Michigan Reconnect, provides a tuition free pathway to a two-year degree for adults over 25, and the Going Pro Talent Fund helps employers train and place workers into high skill jobs.

With bold policy direction and a commitment to sufficiently invest in our future at the federal level – be it transforming fleets to include more electric vehicles or investing in emerging technologies and critical supply chains here at home as examples – states can respond and help the Federal Government implement a bold, modern infrastructure foundation upon which our nation’s economy can grow and flourish for decades to come, and all the while, support a commitment to improving the environment and lives of our citizens.

Conclusion

My state has earned several names or expressions over the years. We are the birthplace of Motown. We put America on wheels. We were the Arsenal of Democracy during World War II. More recently, we became part of a nationwide arsenal of health as so many of our large and small manufacturers quickly shifted to make the masks, shields, and innovations our frontline heroes needed. Our manufacturing heritage brings us pride – ask anyone who has seen the long awaited COVID-19 vaccine depart the Pfizer plant in Portage, Michigan.

The same holds for my state as an arsenal of ideas and innovation that welcomes federal leadership at this time to harness the moment — not shrink from it — to go big. Invest in the needed infrastructure and policies to address the reality and challenges of climate change and provide environmental justice to communities long underserved. Doing so will indeed build us all back better.

Let’s get to work.