July 22 | This Week in Government: Whitmer Signs 2022-23 Budget To Mostly Praise; State Seeks Stay in Adopt and Amend Case, Appeal Planned

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.

DETROIT – Gov. Gretchen Whitmer signed the omnibus 2022-23 fiscal year budget on Wednesday, joined by Detroit and state leaders, as the $54 billion spending plan heard mostly praise.

Whitmer spoke Wednesday on Corner Ballpark, the redevelopment of Tiger Stadium that is now the permanent home of Detroit PAL’s, a youth advocacy group that partners with the Detroit Police Department for the athletic and academic program. She paid her respects to Officer Loren Courts, the DPD officer who lost his life in the line of duty earlier this month.

In total, HB 5783 (PA 166) includes roughly $54 billion ($13 billion General Fund).

Whitmer said public safety and public health were two of her top priorities, saying the budget invests funding for local law enforcement and first responders. The Department of State Police will also receive $832.7 million ($552.7 million General Fund), including more than $9.2 million in the General Fund for a trooper school to graduate 50 new troopers and hiring and training 120 new troopers.

The fourth budget signed by Whitmer invests nearly $33.4 billion for the Department of Health and Human Services, which appropriates $103.7 million General Fund to make up for Medicaid match rate and Children’s Health Insurance Program match rate decreases.

“The budget improves dental care access for Michiganders enrolled in Medicaid, cleans up contaminated sites, speeds up lead service line replacement and funds construction of the new psychiatric hospital in the state, expanding mental health services,” Whitmer said.

The Department of Labor and Economic Opportunity budget includes $5 million more for Michigan Reconnect and $15 million more for Going Pro, two LEO programs Whitmer said have the potential to grow the state’s workforce, especially with Michigan Reconnect offering tuition-free higher education or skills training.

With programs like these, there is no limit to what the state can do, Whitmer said.

For Detroit specifically, the governor shared the budget includes funds for local greenways connecting more than 27 miles of parks and neighborhoods, funds for the Detroit Center for Innovation, and funds for a new research center for the Wayne State Cancer Institute.

Last week, Whitmer signed the education omnibus budget, which increases the per pupil funding to $9,150 for K-12 students, invests $250 million for infrastructure, and $50 million for school districts for increasing access to mental health services.

The budget plan does not include any tax cuts as Whitmer and the Republican Legislature say negotiations continue. They did leave $7 billion on the balance sheet.

The budget also pays down the $2.6 billion in debt, an item House Appropriations Chair Rep. Thomas Albert (R-Lowell) was proud of when it passed the Legislature on July 1. In a statement today, Albert said it was wrong to pass debt along to the next generation, and this budget “makes things right.”

“This financially responsible budget addresses the needs of Michigan families and communities today and helps ensure those needs will continue to be met tomorrow,” Albert said. “Neighborhoods will be safer and stronger with new investments in law enforcement and community development. People of all ages will have more access to mental health care so they can face their challenges and reach their full potential.”

However, Albert said in his statement the budget could have been better if Whitmer did not veto the $20 million included “to promote adoption and help women facing a crisis pregnancy.”

“To be clear – this funding was not about access to abortion. It’s about helping women in need and actually sustaining life, and I am profoundly disappointed that the governor would veto this assistance,” he said.

Whitmer vetoed anti-abortion funding, which included $10 million to fund marketing for programs promoting adoption and adoption as an alternative to abortion, $3 million for maternal navigator programs that assist programs that promote childbirth over abortion, and $2 million for a tax credit for adoptive parents. She also vetoed a line item that allocated $100,000 to the Department of Corrections to pay any legal defense needed against litigation challenging the prohibition of using state funds for gender surgeries or therapies for prisoners.

“Every cycle, no matter who’s the governor and no matter who’s in the Legislature, that is a part of what happens in negotiation. I don’t think that there were any surprises,” Whitmer told the press Wednesday about the vetoed line items.

The Michigan Catholic Conference released a statement after the bill signing, with Tom Hickson, the group’s vice president for advocacy and public policy, calling the budget good in many regards and disappointing in others.

“We are grateful that this budget contains important funding to help protect children in all of Michigan’s schools and provides important resources for the less fortunate,” Hickson said. “Both budgets, however, contained critical funding to provide expectant mothers with assistance in raising their babies. Sadly, these programs were vetoed by the governor as ‘anti-choice.’ This decision will harm women who choose to start a family. Michigan women deserve better.”

Other organizations responded more positively to the budget signing. Angela Madden, executive director of the Michigan Association of Ambulance Services, applauded the budget and its inclusion of $30 million for first responder training.

“The EMS staffing crisis has been worsening every day and state investment is critical to getting more first responders into the field to guarantee ambulance service across Michigan,” Madden said in a statement. “We are very appreciative of the $30 million investment in the state budget for EMS recruitment and training. It will be a game-changer for the future of EMS and the safety of our communities. The funding will help alleviate the staffing crisis and bring critical support and training into communities across our state.”

Ron Bieber, president of the Michigan AFL-CIO, praised Whitmer for her leadership on the budget but called on the Republican-led Legislature to do something with the remaining balance.

“This budget also invests tens of millions of dollars in pre-apprenticeship training and apprenticeship program. This budget also makes critical investments in our states’ infrastructure and working people who build it,” Bieber said in a statement. “We implore the Republican-led legislature to come back to the table and complete the work. With nearly $8 billion left on the table, Michigan’s working families need solutions now – not partisan games.”

Related: Chamber, MICHauto Priorities Included in Bipartisan 2023 State Budget

Lawyers for the Department of Attorney General are asking a judge to halt the enforcement of an earlier ruling that laws increasing the minimum wage and requiring paid sick leave should take effect as they plan to appeal the opinion.

An appeal has not yet officially been filed with the Court of Appeals, but the state’s attorneys have begun the process. In the meantime, attorneys are arguing that the decision by Judge Douglas Shapiro earlier this week does not take effect until August 9.

Shapiro ruled the adopt-and-amend strategy the Republican-led Legislature and Republican Governor Rick Snyder used in 2018 to adopt proposals raising the minimum wage and requiring paid sick leave to avoid them appearing on the ballot, only later to gut those measures, was unconstitutional.

The filing asks for a stay in the ruling – and a decision on that point by August 2 – to provide certainty to businesses and others that would be affected by the ruling.

If the ruling were to take effect, the minimum wage would seemingly increase to $12 per hour immediately, and the tipped minimum wage from $3.75 to $9.60 per hour, or 80 percent of the regular minimum wage.

“To sum it up, any effort to give this ruling immediate effect would be chaotic,” the filing says.

There are questions around the implementation, though, attorneys in the filing argue. Since the initiated acts never took effect as written because of the Legislature passing PA 368 of 2018 and PA 369 of 2018 – effectively gutting the initiatives they adopted during the same session – the minimum wage increases specifically were not able to go through the incremental increases outlined.

The filing questions if the ruling would mean the minimum wage would immediately go to $12 as it was scheduled to do so in 2022 under the initiated acts or start the phase-in process.

“The parties and the stakeholders of the state are entitled to stability and predictability in the law. Notably, Public Acts 337 and 338 were enacted by the Legislature on September 5, 2018. They were scheduled to take effect on March 29, 2019, more than six months later,” the filing says. “In this way, there was significant lead time to enable employers and employees to prepare for the significant changes to Michigan’s minimum wage law and sick leave laws. These laws never took effect as originally enacted, because they were subsequently amended by the Legislature during the same session.”

Additionally, the filing indicated Attorney General Dana Nessel took no position on the motion, and the plaintiffs opposed the stay.

“In 2018 our organization stood shoulder-to-shoulder with others in the fight to get earned paid sick time on the Michigan ballot,” Eboni Taylor, Michigan executive director for Mothering Justice, said in a statement. “The Republican-controlled Legislature took up our proposal only to cut more than half of Michigan workers out of the deal. It was wrong then, which is why we took the issue to court and this ruling is a testament to the hard work of advocates all those years.”

Michigan Restaurant & Lodging Association President & CEO Justin Winslow, in a statement earlier this week, said the group disagrees with Shapiro’s interpretation and strongly encourages the decision be stayed.

“If the 2018 proposals are allowed to be implemented as originally crafted, restaurant operators would immediately experience 156 percent labor cost inflation at a time when their recovery is already tenuous and the average wage for tipped employees in Michigan is currently $24 per hour,” he said. “The inevitable result would be instantaneous menu price increases and significant layoffs during peak travel season. And those operators still indebted from over 400 days of dining room closures and occupancy restrictions that barely survived the last two years would be forced to close their doors permanently.

Related: Chamber Perspective: What to Know About Recent Minimum Wage, Paid Leave Rulings

Organizers for a ballot proposal changing regulations on payday lending said Tuesday they are disappointed after the Bureau of Elections recommended the Board of State Canvassers deny certification for the 2022 ballot.

The Michiganders for Fair Lending ballot proposal did not collect enough signatures to go before voters, the Bureau of Elections said in a staff report dated last week.
The staff report said, based on the sample reviewed, the proposal turned in 274,668, which is 72,513 fewer than the 340,047 required.

While the group is disappointed, its signature gathering efforts have led to a “coalition that is larger and stronger than ever,” Josh Hovey, spokesperson for the campaign, said in a statement.

“Michiganders for Fair Lending spoke to more than half a million people in Michigan about the need to stop payday lenders from preying on vulnerable people in this state. More than 35 new organizations have joined the effort, including chambers of commerce, local credit unions, community organizations, mayors, and more,” Hovey said. “What’s more, the state Black Leadership Advisory Council, in an official report to the state, identified payday lending reform as one of the solutions necessary to stop inequities and to promote economic growth and wealth equity for the state’s Black community.”

Hovey said the groups will now be working as a coalition to push for changes in payday lending through the Legislature “to ensure predatory lenders stop taking advantage of hardworking Michiganders.”

Last month, organizers submitted 392,009 signatures, with bureau staff winnowing the universe of signatures down to 382,633 after a facial review. It determined 9,376 were invalid for a variety of reasons, including missing information in the circulator certificate on 923 sheets containing 4,146 signatures and failure to check the box indicating if a circulator was paid or unpaid on 353 sheets containing 1,472 signatures.

After pulling a sample of 522 signatures and accepting some challenges from an opposing group, the report says 375 signatures of the sample were valid, meaning the board should deny certification.

Of the sample, the bureau said 66 signatures did not come from registered voters, two included no address, eight included an incomplete signature, along with other reasons to deem the signatures as invalid. Fraud was not listed in the staff report as a significant concern.

The opposition group Fair Lending said 206 signatures in the 522-signature sample should have been invalidated. The bureau agreed that 25 of those were invalid.

Michiganders for Fair Lending had initially pushed back on the staff report and went to court to challenge its methods. In the staff report, the bureau said it did accept some objections from the organizers and added 295 signatures back to the universe after its original facial review.

Court of Claims Judge Brock Swartzle on Friday denied a request for a preliminary injunction from Michiganders for Fair Lending, ruling in part the issue is not ripe as the Board of State Canvassers has not yet made a determination. That case now seems likely to be dismissed.

The board is scheduled to meet at 10 a.m. Thursday.

Michiganders for Fair Lending was the only initiative petition proposal to turn in signatures to the state by the deadline. Some, which hope for the Legislature to adopt their proposal, say they will still turn in signatures this year. Others decided to look ahead to future elections.

Two proposals that would amend the Constitution turned in signatures last week. One would include reproductive rights, including abortion, in the Constitution and the other expands voting rights.

A proposal expanding term limits and financial disclosure requirements will be on the ballot in November after legislative approval.

Internet gaming and sports betting operators reported a combined $136.9 million in total gross receipts in June, according to data released by the Michigan Gaming Control Board on Tuesday.

The figures were a decrease from May. Internet gaming gross receipts decreased 4.6 percent, from $127.4 million to $121.5 million. Gross sports betting receipts fell 54.2 percent, from $33.5 million to $15.4 million.

In the first half of 2022, aggregate adjusted gross receipts for internet gaming totaled $681.7 million, while sports betting aggregate gross receipts were $74.1 million.

Compared to this time last year, internet gaming adjusted gross receipts were up 65.3 percent, and internet sports betting was down 70 percent.

The total internet sports betting handle at $270 million in June declined 19 percent compared with the May handle of $333.4 million.

The operators submitted $22.8 million in taxes in June, $22.5 of that being from internet gaming taxes and fees and $328,954 from internet sports betting.

The three Detroit casinos reported paying the city $6.3 million in wagering taxes, including $6.1 million from internet gaming and $201,320 from sports betting.

Tribal operators reported making $2.5 million in payments to governing bodies.

The state’s seasonally adjusted unemployment rate sat for the third consecutive month at 4.3% in June, the Department of Technology, Management and Budget said Wednesday.
Nationally, the jobless rate has remained at 3.6 percent for four months.

“Michigan’s labor market continued to remain stable in June,” Wayne Rourke, associate director of the Bureau of Labor Market Information and Strategic Initiatives, said in a statement. “Both employment and payroll jobs edged up slightly over the month, while the unemployment rate was unchanged.”

The statewide labor force participation rate, at 60.1 percent, and the employment-population ratio, at 57.5 percent, also did not change much during the month, increasing by one-tenth of a percentage point each since May. Both June 2022 measures remained below their February 2020 values, which were 61.1 percent and 58.8 percent, respectively.

The Detroit-Warren-Dearborn area’s seasonally adjusted jobless rate decreased to 4.4 percent in June. The area saw a workforce decline of 5,000 since May.

Nonfarm employment increased by 10,000 or 0.2 percent during the month. The payroll job total was 4,327,000, with minor job gains occurring in multiple sectors.

The most pronounced growth was in the professional and business services sector – 7,000 – and in the manufacturing sector – 4,000.

“Thanks to our hardworking people and innovative small businesses, Michigan’s economy added 10,000 jobs last month,” Governor Gretchen Whitmer said in a statement. “Our state’s unemployment rate also remains low, at 4.3 percent, and we will continue our work to do to help families, communities, and small businesses do even better.”