Dec. 10 | This Week in Government: Economic Incentive Package Clears Senate, Final Approval Still To Come; $1.2B Supplemental Has $667M For COVID Testing, $134M For Antibodies
December 10, 2021- Economic Incentive Package Clears Senate, Final Approval Still To Come
- $1.2B Supplemental Has $667M For COVID Testing, $134M For Antibodies
- Mueller Hopes Texting While Driving Bills Will Be Brought Back Next Year
- Biz Groups Join Call On EITC Expansion Up In Senate Panel
- Bipartisan Package Seeks To Boost Port Authorities
Economic Incentive Package Clears Senate, Final Approval Still To Come
The Senate on Thursday took action on a proposed economic development incentive program that supporters have said would enable the state to be more competitive in landing multi-billion dollar projects as the Legislature prepares for its final session day of 2021.
Passing the Senate by 27-10 votes were SB 769, SB 770 and SB 771. The bills would create an economic incentive program that would provide funding through a Strategic Outreach and Attraction Reserve Fund.
The proposed fund would be an effort by the state to remain competitive for multi-billion dollar projects for things such as manufacturing. The proposals were quickly developed following hand-wringing among lawmakers and state leaders in response to Ford announcing two electric vehicle battery plants totaling $11 billion in Tennessee and Kentucky.
Thursday’s Senate passage follows House votes on Wednesday of identical versions of the same proposal: HB 5602, HB 5603 and HB 5604, which each passed 83-21.
Further movement on the bills, as well as on SB 85, the vehicle bill to fund the proposed initiatives, is expected next week as the Legislature wraps up the year.
The Legislature is scheduled to be in all three days next week but could wrap up its activity on Tuesday.
Concerns raised by supporters of the bills have been that the state might fall behind in the electric vehicle market and lose its clout in manufacturing without providing such opportunities that they believe could attract companies to locate similar projects in the state.
An issue raised by senators opposed to the proposal was over providing incentives to major corporations at the expense of small businesses, which also led to concerns by some members over equity and access to the incentives.
Sen. Curt VanderWall (R-Ludington), sponsor of SB 770, told reporters following the votes that General Motors has various expansions it is considering and projects such as that are important ones that require the state to have incentives like the proposed legislation that could help them keep their business in Michigan.
“What we’re trying to do here, especially when it comes to site development, we’re actually going to have sites that are shovel-ready,” VanderWall said. “Now we’re giving them an opportunity to come in, it speeds up the process, all ready for them to go, and those businesses make a decision because they can be up and running in a much quicker time than what we have currently.”
VanderWall said the bills would be structured so money can be clawed back if companies do not meet their agreements. He added that the proposal would allow for communities across the state to have a chance at taking advantage of the programs.
The senator said the Ford announcement “brought to the light a weakness” he believes the state has in drawing economic development that may have moved the timetable on such a proposal forward somewhat. He said Sen. Ken Horn (R-Frankenmuth) has been working on similar issues related to economic development for some time.
“I think it’s perfect timing to get this done right now,” VanderWall said. “This gives our business people an opportunity to come knocking on the door and say: ‘we want to stay in Michigan, can you help us? This is what we’re going to do for the citizens, and this is what we’re going to for the economy here in the state.'”
The debate prior to the vote was split, with some members of both parties voicing support and opposition.
Sen. Stephanie Chang (D-Detroit) said there needs to be a broader discussion about economic development in the state, not just providing incentives to large corporations.
“I appreciate that we are having this conversation about economic development, but I truly hope we can talk about more comprehensive solutions for the future that reflect the priorities that our residents have been talking about,” Chang said.
Sen. Adam Hollier (D-Detroit) spoke in favor of the bill, talking about GM’s announcement of a major plant closure in his district around the time he was elected. He said he was quickly on the phone to begin pushing for the next project that could preserve that facility, adding that eventually there was the announcement of the all-electric assembly plant at the site.
“We are not competing with Indiana or Ohio. We’re not competing with Mexico or the South. We are competing with the whole world,” Hollier said. “For years we’ve talked about American muscle, but what we’re really thinking about now is American innovation happening in our community, and that’s what these incentives are about.”
The Strategic Outreach and Attraction Reserve Fund would be created through SB 769, introduced by Sen. Kim LaSata (R-Bainbridge Township). The Department of Labor and Economic Opportunity would administer the fund.
Under SB 770, the purpose of the fund is outlined as for providing “grants, loans, and other economic assistance for eligible applicants to conduct eligible activities for the purpose of creating investment-ready sites to attract and promote investment in this state.”
For SB 771, introduced by Sen. Roger Victory (R-Georgetown Township), the bill would create a Critical Industry Fund to provide monies to qualified businesses for qualified projects. These funds would be for gap financing, closing deals or other economic assistance for job creation and capital projects.
The Legislature and governor would receive yearly reports on the activities of the proposed funds.
Sen. Tom Barrett (R-Charlotte) before voting no on the bills questioned the effectiveness of such incentives, saying there have been efforts in the past that he did not believe have panned out for the state.
“If these programs worked, they would have already proven themselves effective by now,” Barrett said.
Barrett cited a trade magazine that ranked economic development incentives low on the list of priorities for businesses looking to locate in an area, with items including a trained workforce, public transit and dependable infrastructure to support them as higher priorities. He said he believed incentives are a way to make up for a lack of quality in higher priorities for businesses.
To this, Sen. Ken Horn (R-Frankenmuth), rose to counter those against the package.
Horn said the state missed out on 11,000 high-paying jobs in the Ford announcement, then asked members to consider the additional impacts that come over the following decades from such a project: new housing, schools, bars, restaurants, gas stations and other amenities to fuel those workers along with an increase in revenue. He said inaction by the state would be at its own peril.
“These bills that are in front of us right now, they deal with site preparation, water, sewer, electric, fire … these are community developments, these aren’t going to companies,” Horn said. “This is such a critical time. This isn’t just a year that we need to make change, this is the month that we make change. We have some opportunities on the hook right now that will change Michigan’s future.”
The response among groups following the Thursday votes in statements was also divided.
“These economic investments would support Michigan as it builds upon its successful advanced mobility and supply chain industries,” Laura Sherman, president of the Michigan Energy Innovation Business Council, said. “The bills would prevent our state from missing out on another golden opportunity for developments and would spur growth in advanced energy jobs for hard-working Michiganders.”
A coalition of groups urged what it called a more comprehensive approach to economic development beyond incentives, emphasizing a focus on not leaving small businesses behind. The coalition included 482Forward, We the People Michigan, Michigan United, Michigan Faith in Action, Clean Water Action, Detroit Action, the Sierra Club Michigan Chapter and United for Respect.
“We believe that instead of just more corporate incentives, providing robust educational opportunities, making transportation more reliable and sustainable, ensuring our water is safe, supporting families, and providing better social and built infrastructure pays off,” the coalition said. “We appreciate the willingness of the group of legislators who also share these priorities and will be watching closely to make sure Michigan doesn’t repeat some of the misguided approaches that have previously left us unable to fully invest in our people and neighborhoods.”
Clean Fuels Michigan Executive Director Jane McCurry was also in support of the proposal, which she said would provide a major chance for growth in the electric vehicle industry.
“Michigan has the know-how to meet the moment and rebuild stronger by doubling down on our automotive prowess and investing in the next generation of the mobility workforce, and this is a significant step in the right direction,” McCurry said.
$1.2B Supplemental Has $667M For COVID Testing, $134M For Antibodies
Addressing health care recruitment and retention, as well as funding coronavirus testing in Michigan communities, are among the top priorities for a $1.2 billion supplemental which came before the House Appropriations Committee on Wednesday.
HB 5523, sponsored by Rep. Julie Calley (R-Portland), appropriates $1.23 billion in federal funding, $395.8 million of which would come from the federal Coronavirus State Fiscal Recovery Funds authorized through the American Rescue Plan Act of 2021.
Among the priorities funded, the largest amount will go toward student and community COVID-19 testing. Approximately $667 million would be allotted overall for COVID testing, $300 million of which is earmarked for schools to buy testing kits directly and allows the state to stockpile additional tests for schools.
The other $367 million would go toward continued testing in communities throughout the state, setting aside $100 million of that money specifically for employers.
The bill explicitly bans the state’s National Guard from confiscating tests, which seems to be a direct response to some confusion last week where the Department of Health and Human Services said the Guard was moving expiring COVID testing kits from one school district to another with a more immediate need.
Funding for eight COVID-19 testing sites across the state, where individuals who qualify could also get a monoclonal antibody treatment that reduces the rates of hospitalization and deaths, is also included to the tune of $134 million. Another $90 million would go toward continuing vaccination programs throughout Michigan.
This vaccine-related funding could not, however, be used “for marketing, education, outreach and other community engagement strategies,” as outlined in boilerplate language.
The eight monoclonal antibody sites would be placed regionally across the state, with the idea being to provide the treatment that greatly reduces the hospitalization and potential death of COVID-positive individuals outside of hospitals as they deal with staffing issues and lack of space.
Individuals must meet a set of criteria to qualify for antibody treatment. Under the proposal, a person would go to a testing site, and if they have COVID-19, the site would determine if they qualify and could receive the treatment right away.
Rep. Thomas Albert (R-Lowell), chair of the panel, seemed to allude to reporters on Wednesday that the bill would not pass prior to the end of the legislative year next week, although he did acknowledge it would be “great to get it done by the end of the year.”
HB 5523 was not reported Wednesday, with Albert saying that he wanted to make sure lawmakers had the chance to offer any amendments to the supplemental. He did, however, emphasize that the bill was a House plan and that the next steps included getting the Senate and the Gov. Gretchen Whitmer’s administration on board.
“This is through the research that we’ve done in looking at what we can do to help Michiganders,” Albert said. “It’s pretty clear we can do better with early treatment. These monoclonal antibodies have proven to be very effective.”
Of additional funding in the bill, $25 million would be used to procure the treatment drug and $24 million under the bill would be slotted for use at nursing homes and long-term care facilities.
To get more staff into health care settings, the bill also includes $300 million for recruitment and retention bonuses. The proposal does not include any restrictions for health care facilities that are requiring vaccinations, but employers would not be able to use vaccination status to determine if a person qualifies for the bonus, as there are still exemptions in vaccine requirement policies.
Albert said earlier this week that health care facilities would come up with programs to recruit and retain workers under the spending plan.
“What we have right now, by and large, these (antibody) treatments are being done at hospitals. Well, they’re having really bad staffing problems right now – so let’s find some other areas where we can get these treatments out there,” he said. “It’ll help reduce hospitalizations. It’ll also help reduce the staffing issues we’re seeing in our hospitals right now.”
Already, the funding is being praised by those in the health care sector as being long overdue.
“A healthcare workforce shortage existed prior to the pandemic and the pandemic has only made it worse,” Brian Peters, CEO of the Michigan Health and Hospital Association, said in a statement Wednesday. “Today’s funding appropriation is a crucial step towards recognizing existing healthcare workers and providing hospitals with resources to improve recruitment and retention.”
Dominick Pallone, executive director for the Michigan Association of Health Plans, made similar remarks in a statement of his own.
“Any time the state can assist Michigan residents with expanded access to coronavirus testing and treatment options, healthier communities will result,” he said. “The Michigan Association of Health Plans supports efforts by Michigan leaders to advance and help fund preventative care awareness, testing and treatment options.”
Mueller Hopes Texting While Driving Bills Will Be Brought Back Next Year
Three bills aimed at strengthening prohibitions on texting while driving have broader support after some concessions were made, but the package was yet again pulled from the House session agenda Tuesday due to undisclosed reasons.
The package consists of HB 4277, HB 4278 and HB 4279. They are sponsored by Rep. Mari Manoogian (D-Birmingham), Rep. Mike Mueller (R-Linden) and Rep. Joe Bellino (R-Monroe), respectively.
Legislation seeking to strengthen the state’s laws around texting and driving have been unsuccessful in recent terms.
On Tuesday, the package appeared on the House’s session agenda, but did not actually come up for a vote. This has happened several times this term with the legislation.
In an interview following session, Mr. Mueller said the decision to pull the bills came from House Majority Floor Leader Ben Frederick (R-Owosso), but did not say much more. The representative did say that some concessions were made that will likely help the bills when they are brought back before the chamber for a vote. Time is running out in the year, so he hopes they’ll be brought up for a vote in the House at the beginning of 2022.
“(The Department Of) State Police asked us for a report … to study the assumed impact of this, on how many tickets are written, how man incidents of accidents that caused injury, accidents that are a result of distracted driving law, and then there’s a sunset period on it so we can see the effectiveness of the law in Michigan,” Mueller said. “Just because other states have improved safety (with similar bills) we want to make sure that we’re crafting laws in Michigan that are good for own citizens.”
He added that these types of laws are popular with Michigan’s citizenry, as poling shows there’s overwhelming support for restraints on distracted driving and more specifically texting while driving.
Mueller has also seen the effect of texting while driving as a former law enforcement officer, and said that an officer never forgets some of the accidents they see due to distracted driving, some that involve fatalities.
“That’s just part of being a law enforcement officer. You never want to see anybody injured and you don’t want to see anybody injured as a result of negligence or something that’s preventable,” he said. “I mean, we can’t prevent everything. We don’t live in a bubble. We do have to have personal responsibility in this, but I think it’s more about changing the cultural behavior of our drivers.”
Biz Groups Join Call On EITC Expansion Up In Senate Panel
Representatives from small businesses, food banks and the hospitality industry showed overwhelming support for legislation increasing the percent of federal Earned Income Tax Credit claimable for credit on state tax returns Wednesday during the Senate Finance Committee.
Those who testified before the committee echoed similar refrains the bill, SB 417, would be a good way to encourage individuals to go back to work.
The committee adopted a S-2 substitute prior to discussion, with the change increasing the proposed percentage of state earned income tax credit from 10 percent to 30 percent by 2024, estimating to reduce the General Fund by as much as $460 million.
Sen. Wayne Schmidt (R-Traverse City) introduced the bill in May of this year but has been working on changing the tax credit since former Governor Rick Snyder cut it down from 20 percent to six percent.
Since the change under the Snyder Administration in 2011, Democrats in particular along with other advocacy groups have consistently called for its expansion.
Schmidt called his bill a pro-work tax credit, saying the policy will bolster the finances of low wage workers and will provide them the opportunity to “step up and out” of poverty.
“The EITC is a hand up, not a hand-out,” Schmidt said. “It provides support to low-income earners and when the EITC has served its purpose and help lift the family out of poverty and income has increased, they no longer qualify. In fact, many beneficiaries use the EITC for just a few years.”
Chair Sen. Jim Runestad (R-White Lake) asked how the senator planned to prevent fraudulent activity since the state credit eligibility was determined by the federal eligibility. Schmidt said it is based on the W-2 tax form and if someone is putting in a fraudulent tax form, there are ways to stamp that out.
Starting in 2021-22, the introduced bill increased tax credits from 6 percent to 10 percent by one percentage point per tax year until 2024. Now, the revised bill increases it to 30 percent and the percentage per year is to be determined.
John McNamara, vice president of governmental affairs of Michigan Restaurant & Lodging Association, was one of many to shower support onto the bill. He said after the first indoor dining lockdown ended, most staff returned to work. Twenty percent of the hospitality labor force disappeared after the second dining shutdown, leaving the industry approximately 66,000 workers short.
McNamara said some workers went to work at Amazon or found employment in the state’s expanding marijuana industry. One key appeal here is being paid in cash, he said.
“Others were forced to not return to work to care for a child whose education or care was interrupted because of COVID-19,” McNamara said. “This is a responsibility which is typically faced on females who make up a significant portion of the hospitality industry.”
He also said the hospitality industry is “years away” from returning to pre-pandemic levels and the bill would help the industry rejuvenate their workforces. Runestad asked aside from the bill, is there anything else to give back to the employees. McNamara replied many of MRLA’s members have given cash bonuses and one employer set up a corporate gym membership.
“They’re trying, but this is something that if you go to work, you’re going to get some more money, it’s in the paycheck and we’re hoping that just incentivizes some people to return,” McNamara said about SB 417.
Small businesses have also suffered during the pandemic. Alexa Kramer, director of government operations at the Small Business Association of Michigan, said the dollars saved through this credit would help their workforce pay for their necessities, like transportation and childcare, which can act as barriers to working.
“Could they earmark this earned tax credit to go toward child care payments, or is there a way that we can opt that to give them those opportunities?” Sen. Curt VanderWall (R-Ludington) asked.
“I’d have to look into that, but I think the beauty of this program is that it’s money directly to that family to pay for the necessities that they think they need,” Kramer said. “I know that we had a lot of conversations around child care, knowing the need for access and getting to the affordability conversation. It’s something to look into, but maybe not for this program.”
Feeding America estimates that one in eight people in Michigan face hunger and 33.8 percent of households receiving SNAP benefits have children. Phil Knight, Food Bank Council of Michigan spokesperson, said over 50 percent of those who come to food banks are employed.
The food bank serves all 83 counties and increased their distribution by 47 percent during the pandemic. He said they support the bill simply because if it puts more money in households’ budgets.
“They will be able to provide for themselves and take trade-offs off the table, between rent and food and utilities and whatever else they may have to choose between, then it lessens the stress on our network,” Knight said. “We’re overwhelmed with opportunities to give the right food to the right people at the right time, and we’d like a little less opportunity.”
After the committee, Schmidt acknowledged VanderWall’s question of tailoring the tax credits specific to needs such as child care, but SB 417 will help families with whatever they deem necessary.
“This is about making sure that those families, those individuals, that single mom or dad, that two-income family, if they need to make a car repair, they can do it. If they need to make a housing payment, they can do it. If they need to make a child care payment, they can do it,” Schmidt said. “It’s really getting those families that are making the right moves, doing all the right things, it gives them that little extra boost.”
Bipartisan Package Seeks To Boost Port Authorities
A recently introduced bipartisan Senate package would provide additional supports to the state’s port authorities and maritime industry, bill sponsors said, and help ensure the state is more competitive with surrounding states that border the Great Lakes.
Last Tuesday the four-bill package of SB 743, SB 744, SB 745 and SB 746 was introduced, with provisions including for the establishment of grant funding for port authority projects, allowing for revenue bonds for transportation projects that could help enhance ports and the establishment of a Great Lakes Maritime Office within the Department of Transportation.
Sen. Stephanie Chang (D-Detroit) introduced SB 744 and SB 746. The first bill would establish a Great Lakes Maritime Grant Program within the Department of Treasury, allowing for grants of between $10,000 and $2.5 million to port authorities.
Projects including the repair of seawalls, dredging of harbors or waterways and obtaining green marine certification would be among those that would qualify under the proposed program. The funds would also be available to use for the purpose of meeting federal funding matches for projects. Reporting requirements would be in place for proving grants are leading to set goals.
Under SB 746, port authorities would be required to develop five-year environmental impact transparency plans.
In a statement, Chang said Michigan’s location along the Great Lakes gives the state a competitive advantage it must continue to work on to capitalize.
“We can better utilize this strength to boost our local economies while simultaneously protecting our waterways and the neighborhoods closest to our ports,” Chang said. “We can create jobs and economic opportunity through a strengthened maritime industry while also protecting this precious resource our residents can enjoy for recreation and living.”
Introduced by Sen. Wayne Schmidt (R-Traverse City), SB 743 would create a Great Lakes Maritime Office within MDOT. The director of the proposed office would be appointed by the head of MDOT, and that person’s responsibilities would include overseeing the proposed grant program in Chang’s bills.
He cited a 2017 report showing 59.2 million tons of goods being moved through the Great Lakes yearly valued at $3.23 billion. The report said commercial ports in the state support 25,910 jobs and generate about $763 million in federal, state and local tax revenue.
“Michigan’s ports are essential to our state’s economy and this package of bills underlies their importance,” Schmidt said in a statement. “My bill would create a Great Lakes Maritime Office within the Michigan Department of Transportation. Doing so would show that we understand the value and contribution that ports and the maritime industry provide to our economy.”
Introduced by Sen. Dale Zorn (R-Ida), SB 745 would allow port authorities to use revenue bonds for the funding of transportation projects to enhance facilities. In a statement, he said projects would include those that enable ports to handle more cargo.
“This legislation is about standing up for Michigan jobs and making sure our ports, like the port of Monroe, have the ability to compete with other U.S. ports for cargo,” Zorn said. “Allowing more ships to use our ports would help reduce the costs for Michigan businesses and consumers and provide more high-wage jobs for Michigan workers.”
The bills were referred to the Senate Economic and Small Business Development Committee.