Detroit Regional Chamber > Advocacy in Action > June 17 | This Week In Government: Lilly To Resign July 1; Senate Passes Mental Health Supplemental Pushed By Shirkey

June 17 | This Week In Government: Lilly To Resign July 1; Senate Passes Mental Health Supplemental Pushed By Shirkey

June 17, 2022

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.

Lilly To Resign July 1, Lead Government Affairs for Food Distributor

Rep. Jim Lilly will become the fourth House lawmaker to resign this term with plans to start a new job as vice president of government affairs at SpartanNash, a West Michigan-based food distributor.

Lilly (R-Park Township) made the announcement on Thursday. He is in his third term and cannot seek reelection this year.

While there is a law on the books prohibiting a resigned lawmaker from lobbying during the remainder of the term to which they were elected, Lilly said he looked into that extensively and will not be violating the law.

For the next six months to a year, he will be developing an advocacy strategy for the company as the government affairs arm is being built from the ground up, he said.

He said it was a tough decision to resign but also said for the remainder of the year, there are few session days left.

Once Lilly officially resigns, Governor Gretchen Whitmer would call a special election though it would be complicated. A special election would require the use of the existing House map, so if the special primary and special general election were timed with the regular August/November election, a different set of voters would be filling the partial term compared to the full term. There also might not be enough time to use the special August 2 primary for the special primary.

Most of Lilly’s current district is in the new 88th District, where Rep. Greg VanWoerkom (R-Norton Shores) is running. But unless VanWoerkom moved, he would be ineligible to run for the partial term, which does not include his hometown. However, VanWoerkom’s Republican primary opponent, Mick Bricker of Spring Lake, lives in both the current Lilly district and the new 88th District.

Lilly’s resignation will put the House at 56 Republicans and 53 Democrats, with 55 votes needed to pass a bill. That means Republicans will continue to only be able to lose one member on votes to pass bills.

As to what he is most proud of during his time in the House, Lilly said his bipartisan record, which “speaks for itself.”

“I am hopeful others can figure out how to do the same thing,” Lilly said.

Indeed, Sen. Curtis Hertel Jr. (D-East Lansing) praised Lilly in a statement announcing his resignation.

“Jim earned his reputation as one of our most pragmatic and bipartisan legislators. He has been a great partner to work with,” Hertel said. “I always knew that, with Jim, I could find someone willing to put partisan politics aside to get something done. Working together, we’ve made real progress in strengthening Michigan’s economy and supporting local communities. I’m glad he’s found a way to continue that work in a new way.”

Lilly was the only legislative Republican to attend the 2021 Detroit Regional Chamber Mackinac Policy Conference, which required attendees to be vaccinated against COVID-19.

Lilly chairs the House Rules and Competitiveness Committee, the only panel on which he serves.

“We are all sad to see Jim go, but we are also happy for him as he begins a new chapter,” House Speaker Jason Wentworth (R-Farwell) said. “This is a great opportunity, and I sincerely wish him the best. Until the time comes, we will work closely together to transition the leadership of the Rules Committee and make sure Rep. Lilly’s constituents are taken care of until a new representative is chosen this fall.”

With his pending departure, Lilly is the fourth lawmaker to resign this term. Now-Sen. Doug Wozniak and Sen. Mark Huizenga both resigned after winning Senate seats, and former Rep. Abdullah Hammoud is now the mayor of Dearborn. A fourth vacancy had to be filled when the late Rep. Andrea Schroeder died last year.

“This is a great opportunity to help move this entire country forward on issues related to labor shortages and supply chain challenges,” Lilly said. “I have always been passionate about solving problems faced by families and local businesses in our community, and that’s why I know this is the right time to make the transition to work on these issues in the private sector. It is hard to leave public service and the Legislature behind to focus on issues at the federal level, but I know this is the best way I can give back and have a meaningful impact both now and for the next several years.”

Senate Passes Mental Health Supplemental Pushed by Shirkey

The Senate on Wednesday passed more than $565 million in supplemental spending with several funding items not taking effect unless a proposed integration of mental and physical health Medicaid services becomes law.

The bill, SB 714, was passed 36-1 with little discussion, though Senate Majority Leader Mike Shirkey (R-Clarklake) did give a floor speech.

Democrats, however, denied the bill immediate effect.

“They should have access to quality mental health services regardless of their means and what their ZIP code happens to be,” Shirkey said prior to the vote. “We need to make everyone aware of the importance of mental health and where their loved one, their neighbor, their co-worker can receive quality care when needed.”

Shirkey said the proposal before the chamber would direct money to numerous priorities, including the bolstering of services, helping recruit and retain health care staff, and to help proactively address mental health risks among children.
“I’ve said this before, and I’m not proud to say it again: Michigan’s mental health system is failing patients, their families, providers, and taxpayers,” Shirkey said. “This bill is a piece, an important piece, for what I hope is a comprehensive plan to address a broken system.”

As passed by the Senate, SB 714 contained $565.5 million gross ($17.5 million General Fund) for the 2021-22 fiscal year for the coronavirus pandemic response.

Of this, $548.7 million would be from the Coronavirus State Fiscal Recovery Fund. A total of $15 million in local funds would be shifted to General Fund for Medicaid mental health services within the Department of Health and Human Services. The fund shift would only occur if SB 597 and SB 598, the policy bills for Shirkey’s proposed mental and physical health integration, were to become law.

The policy bills from Shirkey were subject to multiple committee hearings and were reported in October 2021, but no votes have yet been taken. The two policy bills would require DHHS to develop and implement a phased-in plan to integrate the administration and provision of Medicaid physical care services and behavioral health specialty services for behavioral health populations through the creation of specialty integrated plans, beginning January 1, 2023, and extending through 2030.

Shirkey’s plan has drawn support from groups who have said it would simplify the process while mirroring private insurance, while opponents have raised cost concerns and feared it could create hurdles to obtaining care.

Under the bill, $100 million would go toward infrastructure grants for pediatric inpatient services.

Other key funding items within the bill include monies for community mental health services integration readiness ($50 million); an expansion of mental health services ($35 million); a clinical integration fund ($25 million); assistance for crisis stabilization units ($25 million); Michigan essential health provider loan repayments ($25 million); psychiatric residential treatment facilities ($25 million) and for state psychiatric hospital capital outlay ($25 million).
The bill also contains $20 million for telemedicine infrastructure improvements, $20 million for hospital infrastructure improvements, and $15 million apiece for behavioral health provider recruitment, for the Detroit Wayne Integrated Care Center, and for community mental health first aid training.

Several items would not take effect unless SB 597 and SB 598 were passed into law, which was outlined in boilerplate language. This would include the $15 million local funding to General Fund shift for Medicaid mental health local match funding.

The $25 million Clinical Integration Fund line item for providing grants to facilities and providers for integrating their setting for physical and behavioral health services and providers would also require the two policy bills to be enacted and spent.

The $50 million line item for community mental health services integration readiness would also be subject to passage of SB 597 and SB 598, as would the $15 million for the Detroit Wayne Integrated Health Network and $10 million in jail diversion funding.

Shirkey has not yet brought SB 597 and SB 598 up for votes despite previously stating he was hoping to do so earlier this year.

What level of support the majority leader might have outside of his own caucus is unclear, given that the bills were reported from the Senate Government Operations Committee Track along party lines with one Democratic abstention. Earlier this fall, DHHS Director Elizabeth Hertel said the concept for integration was not currently a focus for the department.

K-12 Alliance to Legislature: Pass School Budget by July 1

A group of educators on Wednesday called on the Legislature to pass a K-12 budget before July 1 as at least the House plans to limit session days so negotiations can continue.

With the Legislature’s summer recess during an election year inching closer, it is unclear if the GOP majority and Governor Gretchen Whitmer’s administration will agree to a proposal before the end of the month.

The House will not be meeting Thursday and is likely to just meet one day next week. As for the week of June 27, the House could be in one day or all three. For the Senate, that last week is tentative.

On Wednesday, Ken Gutman, superintendent of Walled Lake Consolidated Schools and president of the K-12 Alliance of Michigan, said the Legislature and administration should focus on passing the budget for schools even if it has to pass it separately from the rest of the budget.

“While we appreciate the incredible amount of work that goes into crafting state budgets, we have only two weeks left until our schools’ new fiscal year starts, and seeing the legislature cancel session days is raising the concern of every school administrator about Lansing’s commitment to completing this budget on time,” he said in a statement. “Having a finalized budget is what allows school leaders to plan for the upcoming year, make critically important hires, and set our schools up for success. Any delay in that process will make hiring critically needed tutors, reading coaches, and other staff harder as we are forced to put those decisions off while potential employees take jobs elsewhere.”

Indeed, last year the Legislature passed the K-12 budget and then negotiated the rest throughout the summer.

This time around, the Legislature and Whitmer are in a similar situation as there remain billions in surplus revenue to be spent and a disagreement on tax policy.

Conversations are continuing on how to best spend the extra fund and the tax changes both sides can agree on. Whitmer has vetoed several proposals from the Republicans, who have passed various tax cuts without negotiating.

Whitmer has most recently called for $500 rebate checks to go out to undefined taxpayers and previously proposed the expansion of the Earned Income Tax Credit and a repeal of the so-called pension tax.

The Legislature most recently passed a $2.5 billion tax cut with the EITC expansion, an income tax reduction, a disabled veteran property tax expansion, a $500 child tax credit, and a tax decrease for seniors.

Whitmer has also vetoed a proposal that would have paused the state’s fuel tax – though it did not get immediate effect – but recently, the Senate passed another proposal to do the same. The House has not yet acted on the Senate bills, a potential sign talks are ongoing.

Gideon D’Assandro, spokesperson for House Republicans, when asked about the prospects of the budget being finished by July 1, said: “That’s the goal everyone is working toward.”

Craig Begins Write-in Bid; Sues Fraudulent Circulators

James Craig said Tuesday that he is powering forward with his bid to take the Republican nomination for governor, albeit in a position he hadn’t initially planned for – as a write-in candidate with a longshot campaign ahead of him and just two months to make a splash before the August 2 primary.

He also told reporters after filing that he has filed a lawsuit in Kent Circuit Court against the fraudulent signature gatherers that were, in some ways, responsible for the final implosion of his campaign.

Craig on Tuesday filed with the Bureau of Elections as a write-in candidate, as he was one of five candidates who were disqualified from appearing on the primary ballot due to numerous fraudulent signatures flagged by the bureau in late May. He and the other disqualified candidates – which include Perry Johnson, Michael Brown, Michael Markey, and Donna Brandenburg – sued the state in various courts to get back on the ballot, but those efforts were unsuccessful.

While Johnson continued to seek relief in the federal courts, efforts that have thus far failed, Craig said he would be embarking on the enormous lift of seeking the nomination as a write-in.

“This is undoubtedly an uphill battle. This is certainly not the path I chose. The path I would have chosen would be to be on the ballot, to compete,” Craig said outside the Richard H. Austin Building in Lansing after filing. “Frankly, and I won’t speak for (Johnson) or any of the other candidates, but I think we have a strong case. Granted, we were duped. Forgers came in, and as it was indicated, widespread forgery.”

When asked about his chances as a write-in candidate, which Johnson indicated would be a massively expensive effort in a joint interview last week with Craig, the former chief of the Detroit Police Department said he was optimistic. He did not downplay, however, how much of a lift he was facing as the clock ticks down to August.

“I think I have a good chance. One of the reasons I decided to do this, I’ll tell you, over the months I was leading the other GOP candidates, consistently,” Craig said. “Compared to the incumbent governor, I was ahead in two polls with independents. … Sometimes it showed me in a dead heat. But all of that said, I’m doing this for the voters. They matter. They count.”

Craig then said that several have reached out to him, encouraging him to take the write-in route, and now he appears to be making good on that commitment.

“That’s motivation for me,” he added. “I’m not going to sit here and tell you it’s going to be easy. It’s an uphill battle. I know it. You’re talking about a statewide race. My team and I get together, talk strategy and what that will look like as a write-in candidate.”

Part of that includes figuring out what would be a legally accepted write-in vote, such as just his last name, “Chief” as he is known among his supporters, or “Black man,” a hypothetical option considering he was the only Black candidate in the race.

He also said that he would likely have to pare down his campaign staff to stay afloat, and that could mean parting ways with Axiom Strategies, his campaign consulting firm. This would represent yet another major shakeup of his campaign staff, a common theme throughout his bid for governor.

Craig said he had some campaign money left but wouldn’t clarify how much he had on hand. The candidate had several fundraising woes even when he was the supposed frontrunner in the race, a title that had yet to be bestowed on any of the candidates as the playfield continues to shift by the day. That was evident by candidate Tudor Dixon catching some headwind in her bid after Craig and Johnson were bounced from the ballot, and later Ryan Kelley, who gained a boost in profile (and maybe notoriety) when he was arrested last week and charged with misdemeanors in relation to his activities in Washington, D.C., during the U.S. Capitol insurrection attempt on January 6, 2021.

That said, Craig said he was hoping his early name recognition can be a catalyst to a successful write-in campaign. When asked if he would consider running as an independent, he dismissed the notion, stating that he wanted to run and win as a Republican.

When asked about his quality control processes before filing his signatures, Craig scoffed at those who said he should have known his own signatures were fraudulent before turning them in.

“I think it’s unreasonable when people say, ‘well, you’re the candidate, you’re supposed to know,’” he said. “If people sign a petition, the only way to know and validate that they are a registered voter, you have to go into a computer system to do that, and I don’t have access to that. I don’t know how you overcome that. It’s very troubling and disturbing that this happened.”

He also explained the nature of his complaint in Craig, et al. v. In Field Strategies, Inc, et al. (Kent Docket No. 22-05367v), which was filed Monday in Kent Circuit Court. The complaint includes plaintiff Vanguard Field Strategies and names In Field Strategies as the first-named defendants, as well as 18 individual circulators who had been implicated in the alleged fraud scheme.

“My attorney, who has initiated lawsuits against two petition companies, indicated that he’s never seen anything like this,” Craig said. “And so, we’re going to move forward with that because we want to hold people accountable. This should have never happened.”

The complaint says as much in its opening paragraphs, alleging that a “cadre of circulators signed affidavits falsely swearing that they had obtained genuine signatures from among the thousands of voters who support Chief James Craig, the leading Republican gubernatorial candidate.”

It goes on to say that unbeknownst to him and Vanguard, thousands of those signatures were forged in the process.

“For reasons that will be discovered in this case, this cadre of circulators committed massive fraud when it would have been easy to gather legal signatures from Chief Craig’s massive energized base of supporters,” the complaint states. “(The) plaintiffs do know – now – that the fraudulent circulators had one thing in common: they were hired by a subcontractor of a subcontractor whose principal, Shawn Wilmoth, had previously (pleaded) guilty to signature fraud.”

Craig also called out Wilmoth by name, making the same accusation against him in front of members of the media that appeared in his legal complaint.

The complaint goes on to assert that In Field had promised Vanguard that it would collect signatures from Craig supporters “with a high validity rate.” The fact that a great deal of those signatures would end up being flagged as fraudulent, the complaint states, was at minimum a breach of a contractual promise. It goes on to say that In Field had secretly and “recklessly” subcontracted Wilmoth’s firm and installed an alleged Michigan manager as a front while Wilmoth’s circulators committed the alleged fraud.

As a prayer for relief, Craig is seeking to recover damages for breach of contract and fraud “for the crushing loss inflicted by In Field and Wilmoth’s circulators.”

In an interview with The Detroit News on Tuesday, Johnson also told the newspaper that he was meeting with attorneys to contemplate a lawsuit against the same group that managed his signature-gathering efforts. He did so on Monday and was to meet with them again on Tuesday.