Gov. Whitmer Calls for $100M in COVID-19 Relief, Increased Unemployment Payments

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Michigan Gov. Gretchen Whitmer is calling for a $100 million state-level economic stimulus to provide “direct financial support” to struggling small businesses and families, a boost in unemployment benefits, and more state aid to hospitals and nursing homes for their COVID-19 pandemic costs.

In a letter sent Wednesday to legislative leaders, Whitmer proposed the Legislature pass a pandemic economic aid package during the three-week lame-duck session scheduled to begin Tuesday in Lansing.

The Democratic governor said the $100 million stimulus plan could be in lieu of additional federal aid from Congress, which has been in a stalemate since June over a second stimulus following the federal CARES Act, which pumped more than $2 trillion into the economy during the first wave of pandemic-induced business shutdowns.

“It is crucial for us to come together now to pass a targeted, state-based economic stimulus plan of up to $100 million that will provide direct financial support to the families and small businesses that have been hit hardest by the pandemic,” Whitmer wrote in a letter sent Wednesday to the Legislature’s top Republican and Democratic leaders.

The Governor did not spell out a specific plan for how to distribute $100 million and to which kinds of businesses, but she did suggest the state’s coffers can’t afford a bigger stimulus.

“As you know, Michigan is still facing a shortfall of up to $1 billion for next year, so it is incumbent upon all of us to avoid the temptation to spend limited dollars on non-critical projects,” Whitmer said.

Whitmer’s push for direct state tax dollars to small businesses hardest hit by the pandemic came one week after her administration shuttered indoor service in restaurants and bars and ordered high schools, bowling alleys, movie theaters, ice rinks, and Detroit’s three casinos to close for three weeks in an effort to curb a surge of new cases of COVID-19.

For the movie theaters, bowling alleys, arcades, and other indoor entertainment venues, it’s the second shutdown by the governor this year following a six-month shutdown from March to September.

It’s come as COVID-19 cases have skyrocketed from a seven-day average of 854 each day on Oct. 1 to 3,283 new daily cases on Nov. 1. On Friday, Michigan’s seven-day average number of new cases of the coronavirus was 6,681.

Charles Owens, state director for the National Federation of Independent Business, said state aid for small businesses “is definitely needed and appreciated,” but the dollar amount the Governor is proposing may not come close to staving off scores of permanent closures.

“I know this is hard for the average person to understand, but $100 million is not a lot of money,” Owens said.

That amount would equate to about $10 for each person in Michigan.

Brian Calley, president of the Small Business Association of Michigan, said state aid would not be enough to stave off the collapse of ailing restaurant, hospitality, entertainment, and sports-related businesses.

“Even if we assumed only 20% of businesses remain severely impacted, the need would still be measured in billions, not millions,” Calley said.

Earlier this month, the Michigan Economic Development Corp. finished distributing $100 million in grants to 14,000 small businesses through a pot of money the state got through the CARES Act. The state economic development agency began accepting applications for those grants in mid-July.

Owens said if the Legislature does approve grants for small businesses, the process for applying and receiving the aid should be expedited.

“There are businesses a week away from going out of business,” Owens said. “Even waiting a month to fill out the forms and get that money to them, that’s a long time considering the condition they’re in.”

Whitmer’s three-week limited business shutdown is scheduled to end Dec. 8.

Rich Studley, CEO of the Michigan Chamber of Commerce, said lawmakers should wait until the expiration of the Whitmer administration’s current business shutdown orders before considering aid to those businesses shuttered by her health department’s order.

“It’s important that lawmakers are very cautious about not being pushed into or rushing into making hasty policy decisions with long-term implications during a brief lame-duck session,” Studley said. “The most important thing that the Whitmer administration can do for unemployed workers and struggling employers is to make sure that the so-called three-week pause, the current stay-at-home business shutdown orders, expires as scheduled on Tuesday, Dec. 8.”

In her letter to lawmakers, Whitmer also asked them to make permanent an extension of eligibility for unemployment benefits from 20 weeks to 26 weeks and increase the $362 maximum weekly benefit by an unspecified amount.

Michigan’s maximum weekly unemployment benefit is the lowest of any Great Lakes state and has been locked in by law since 2002. With a national average of $468 per week, Michigan’s weekly unemployment benefit is the ninth-lowest in the country, federal data show.

Any increase in weekly benefits would likely result in an unemployment insurance tax increase on employers.

In October, after the Michigan Supreme Court invalidated Whitmer’s pandemic executive order adding six weeks to unemployment benefits, the Legislature authorized the extension through Dec. 31.

Studley said lawmakers should not make additional weeks of unemployment insurance permanent until reforms are made to the Unemployment Insurance Agency, which was hampered by fraud attempts during the mass layoffs in March and April as a result of Whitmer’s order shutting down vast swaths of the state economy.

“That alone should be good reason for lawmakers on both sides of the aisle to be very wary about shoveling even more dollars out the door unless lawmakers have the time to take very strong legislative action to clean up the mess at the Unemployment Insurance Agency,” Studley said Friday.

Whitmer also called for more direct spending on public health costs “in the absence of federal funding” to sustain the health care industry’s efforts to treat Michigan residents who contract the virus and become ill.

“Additionally, as federal coronavirus relief funds expire at the end of next month, we should focus spending on direct public health costs like hospital overflow staffing, testing, PPE, and mitigating the spread of COVID in our prisons and congregate care settings that house our most vulnerable populations like those in our veterans homes, adult foster care, and nursing homes,” the Governor wrote.

“In the absence of federal funding, we also need funding to begin preparations for vaccine distribution and administration.”

*Originally published in Crain’s Detroit Business.


Related:

Brad Williams: 5 Ways Lawmakers Can Help Michigan’s Economy in Lame Duck


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