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Mar. 25 | This Week In Government: Legislature Sends $4.7B ‘Transformational’ Spending Plan To Gov; Ananich Introduces Sales Tax On Fuel Suspension Package

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. Legislature Sends $4.7B ‘Transformational’ Spending Plan To Gov
  2. Ananich Introduces Sales Tax On Fuel Suspension Package
  3. Backlash Prompts ICRC To Reverse 7% Pay Raise
  4. Unemployment Down Slightly In February; ’21 Revised Upward
  5. Shirkey, Who Once Praised Craig, Endorses Dixon

Legislature Sends $4.7B ‘Transformational’ Spending Plan To Gov

The Legislature on Thursday in broad, bipartisan votes sent a multi-billion supplemental to Gov. Gretchen Whitmer with investments in water infrastructure that was described as historic and transformational.

SB 565 is highlighted by billions for water infrastructure improvements. The bill also includes millions for parks and recreation, broadband, homeowner and rental assistance, coronavirus recovery efforts and local governments.

The House passed the bill 95-7 and the Senate quickly followed suit 34-3.

HB 5525, which provides $100 million to the Unemployment Compensation Fund, was also passed by the Legislature. It passed 36-1 in the Senate and 98-5 in the House. That bill also provides roughly $40 million toward improvements and anti-fraud efforts at the Unemployment Insurance Agency.

Both bills together expend $4.8 billion and Ms. Whitmer is expected to sign both bills.

House Appropriations Chair Rep. Thomas Albert (R-Lowell), Senate Appropriations Chair Sen. Jim Stamas (R-Midland) and Whitmer announced Wednesday an agreement on the spending plan. It came the day before the Legislature takes a two week-break and also in the midst of public disagreements concerning tax cut plans.

Whitmer dubbed the proposal the “Building Michigan Together Plan,” and said she looks forward to continuing the spirit of collaboration through to the budget.

“Together, we stay focused on solving our shared challenges and delivering for Michigan,” Whitmer said. “These are tough times for families, small businesses, and communities, and this supplemental will help grow our economy, create jobs, and invest in every region of our state. I am proud that so many of the proposals I introduced last year to invest our federal resources have been fully funded in the Building Michigan Together Plan that was just passed by the Legislature.”

The spending proposals saw almost universal praise from lawmakers and environmental groups in particular.

The crux of the spending is for various water projects. This includes loans for wastewater infrastructure ($154.3 million), drinking water infrastructure ($88.2 million), stormwater and wastewater cleaning ($8.1 million) and drinking water ($37 million). Additionally, the bill provides $138.8 million to replace lead service lines and assistance for disadvantaged communities addressing water infrastructure projects ($43.3 million).

Another $50 million goes toward the purchase of filters for schools and child care centers, $20 million for drinking water asset management, $10 million to address recommendations in the Michigan Water Use Advisory Council’s 2020 report, $43.2 million for dam-related projects, $35 million for loans on failing septic system loans and $15 million for PFAS remediation.

Notably, another $1.3 billion is appropriated for wastewater, stormwater and drinking water infrastructure improvement projects. These could include mitigation grants, regional water authorities, lead line replacements and PFAS remediation. Another $59.9 million would go toward disaster recovery as result of the May 2020 floods and $206.8 million for other dam-related projects.

“This is huge across the state,” Albert told reporters. “Even if you look in my district, the city of Belding has a huge wastewater issue. The total plan cost well north of a million dollars. This funding will be available across the state to all these communities like this, to make sure they’re not going to have some extremely large tax on their citizens. This is really going to help out.”

House Minority Leader Donna Lasinski (D-Scio Township) said Democrats have been working toward a proposal like this for a long time as tireless advocates for safe drinking water.

“These federal dollars will benefit Michigan families for many years, from their ability to trust that their first drink of water in the morning is free from lead and PFAS contamination to the safety of their families on our roadways,” she said. “We will continue to push our legislative partners to spend all available federal dollars because projects like we’ve funded today make a difference in the lives of our neighbors and our communities.”

Stamas called passage of the bill a historic moment for putting significant monies into long-term infrastructure needs across the state, thanking leadership on both sides of the aisle and the administration for its work.

He echoed those remarks following session in comments to reporters, adding the funding for dam replacements in his district would be a huge win for mid-Michigan.

“I’m just humbled that we were able to actually come together … and provide this type of funding and actual infrastructure that will really help all Michigan families across the state,” Stamas said. “We sort of dream of the opportunity to make differences in Michigan families’ lives, and this legislation does that.”

Senate Minority Leader, Jim Ananich (D-Flint), told reporters Thursday was “a good bipartisan day” for the Legislature. He was also asked whether negotiations should have gone faster to get the federal funds out the door.

“As long as we got it done, I was happy,” Ananich said. “Whenever we got it done, but getting it done now is the most important thing.”

He said after working on securing funding for years, getting the funding for the state park in Flint was a top local priority for him.

On broadband, the bill provides $250.6 million for competitive infrastructure grants in underserved areas. Another $322.2 million in COVID relief funds is appropriated and could be used on a variety of things, including broadband investment.

For housing, the bill provides $121.4 million in homeowner assistance, $50 million to expand affordable housing, another $50 million to increase housing supply for those with incomes between 185% and 300% of the federal poverty level and $382.9 million in rental assistance.

On parks and infrastructure, the plan provides $200 million for local park and trail infrastructure grants, $250 million for state park improvements and $30.2 million for a state park in Flint.

Additionally, the bill appropriates:

  • $88.1 million for legislatively authorized infrastructure grants;
  • $1.1 million for demolition of the former Deerfield Correctional Facility;
  • $50 million for potash extraction operations;
  • $25 million for Mobility Futures Initiative;
  • $25 million for grants dealing with low carbon energy facilities;
  • $25 million for an Office of COVID-19 Office of Accountability;
  • $316.7 million for roads and bridges;
  • $66.2 million for public transportation programs;
  • $97.8 million for airports;
  • $46 million to ensure local governments that saw population declines due to the U.S. Census remain whole on revenue sharing; and
  • $66 million for pump station back-up generators.

Lisa Wozniak, executive director of the Michigan League of Conservation Voters, said in a statement the bill represents “the single-greatest investment in our history toward protecting our water and addressing critical drinking water contamination that is threatening the health of communities across the state.”

“This transformational investment demonstrates yet again that protecting our water is not a partisan issue, and ensuring all Michiganders – urban, suburban and rural – have access to clean, safe drinking water is paramount to our future,” she said. “We applaud lawmakers on both sides of the aisle for standing up for our water.”

Michigan Municipal League Board President Barb Ziarko, a Sterling Heights City councilmember, said in a statement the proposal shows “amazing results can happen,” when leaders work together.

“The budget supplemental approved in the Legislature today represents historic investment in our communities. This is nothing short of a significant victory for all in our great state,” she said. “We look forward to leveraging these funds with resources at the local level to amplify the impact and create shared prosperity. It is through these investments that our communities will continue to be the economic backbone of this state, drive growth, and increase our competitiveness.”


Ananich Introduces Sales Tax On Fuel Suspension Package

Senate Minority Leader Jim Ananich introduced legislation Thursday that would suspend the 6% sales tax on motor fuel for up to one year, a move he said would provide relief the residents in a time of rising prices on fuel and other products.

The bills, SB 984, SB 985 and SB 986, would amend parts of statute to suspend the sales tax on motor fuel purchases through March 31, 2023.

The plan by Ananich (D-Flint) is the second sales tax plan introduced in the Senate, with Republicans introducing bills last week. Ananich told reporters following session Thursday the GOP plan would be a permanent cut compared to his proposal, which is temporary.

“I’m open to having a conversation about long-term, but I think we’d have to replace revenue at least in some way, and I don’t think that’s going to happen in an election year,” Ananich said. “A temporary pause is a smarter way to look at it and have the interest groups and other folks at the table to talk about how do we make sure that we don’t hurt local governments or schools.”

He reiterated that he is open to talking about a long-term cut of the sales tax on motor fuel, but he believed a temporary pause would be a better approach to see how it works while discussing a long-term solution.

When asked about the opposition from House Speaker Jason Wentworth (R-Farwell) to suspending the sales tax on fuel, Ananich said a sales tax suspension would be a smarter way to address the issue. He said suspending the state fuel tax of 27.2 cents per gallon would lead to cuts to government services and road construction projects without backfilling the reduction in revenue.

Both Ananich’s bills and the Republican package have been referred to the Senate Transportation and Infrastructure Committee.

Sen. Tom Barrett (R-Charlotte) told reporters earlier this week the GOP bills, of which he was one of the lead sponsors, would be taken up shortly after the Legislature returns in April from its legislative spring recess.


Backlash Prompts ICRC To Reverse 7% Pay Raise

Members of the Independent Citizens Redistricting Commission on Thursday overwhelmingly reversed course on a 7% raise it approved last month, bringing its pay back to 35% of the governor’s salary.

Commissioners voted 12-1 to set its pay to what it was before the raise with Commissioner Brittni Kellom, a Democrat, the lone no vote.

A month ago, the commission voted 8-3 to increase its salary – labeled as a cost-of-living adjustment by the body’s staff – to align with rising inflation. With the raise, commissioners would have made nearly $60,000 annually. At 35% of the governor’s salary, commissioners make about $56,000.

The Constitution requires commissioners make at least 25% of the governor’s salary, which is about $40,000 annually. On Thursday, some members moved to make the minimum amount allowed, but that motion failed.

After weeks of backlash and repeated discussions – the commission shot down a motion to reconsider the raise at its last meeting – some commissioners who supported the raise said they would change their vote in an effort to end the discussion once and for all.

Others noted the backlash would put a shadow on the good work they have done, make it harder to work with the Legislature on funding and, as the body winds down its work, may just not be necessary.

Some commissioners expressed frustration at the issue coming up again while others supported reducing salaries to 25%, so the end product of reverting back to their original salary was somewhat of a compromise.

Commissioner Rhonda Lange, a Republican, said the body owes it to taxpayers to be as resourceful as possible and said it is unlikely her colleagues are doing as much work as they were earlier in the process.

“It has been said that most of us have gone back to our regular jobs. If anybody can tell me what commission business they are doing if you are working 40 hours a week on commission business, I am wiling to listen,” she said. “There are a lot of folks out there … feeling inflation that don’t have jobs, that don’t get a raise. And this is taxpayer funded money. And not to mention, we have to go to the Legislature asking for money. How does that look?”

Commissioner Richard Weiss, an independent, agreed. He said he would support going to 25%, as did Lange, but would settle for just going back to the original salaries.

“We really did a really, really, really good job when they all said we couldn’t do it. … And we drew some really good maps,” Mr. Weiss said. “So my belief is if we have to go before the Legislature, they are going to crucify us on this subject. I would just assume if we set our salaries … at the 35%. … if we stay where we are at, we should be fine. The Legislature will have to find something else to pick on us about.”

Weiss said his understanding is the commission got maps drawn for less than any other similar commission in the country every did.

Kellom said the body owed taxpayers a lot in its decision making throughout the process.

“We are so deeply considering this and yet we didn’t consider the public opinion for other things,” she said.

On Thursday, the commission also formally approved a new contract for Edward Woods III, who will be working as both communications and outreach director and executive director, beginning April 1. His new salary is $152,000 annually and the contract runs through the end of the fiscal year unless ended sooner.

Finally, the commission determined it would hold an in-person meeting on its next scheduled date of April 14. The meeting will be in Detroit.


Unemployment Down Slightly In February; ’21 Revised Upward

Michigan’s seasonally adjusted unemployment rate fell by 0.2% in February to 4.7% as the state saw a modest gain in an employment though the annual revision process for 2021 data showed that the unemployment rate for most of 2021 was far worse than initially reported.

This is the second significant revision from the Department of Technology, Management and Budget.

Last year, DTMB’s Bureau of Labor Market Information and Strategic Initiatives warned that even as it reported relatively low monthly unemployment rates ranging from 4.7 to 5.7%, it was unsure if those numbers were correct because of the turmoil in the labor force.

The bureau in November announced it was revising the September jobless rate from 4.6 to 6.3% and that it was reviewing the preceding eight months.

Thursday, the bureau announced the result of that review of 2021.

It made the following revisions (original reported rates in parentheses):

  • January: 6.4% (was 5.7%)
  • February: 6.3% (5.2%)
  • March: 6.2% (5.1%)
  • April: 6.2% (4.9%)
  • May: 6.2% (5%)
  • June: 6.3% (5%)
  • July: 6.2% (4.8%)
  • August: 6% (4.7%)

In a note about the revision, the bureau pointed out all states participate in the revision process. It did not get into further details about why the revision was so significant and a message seeking additional information was not returned prior to publication.

As far as the month over month changes, Wayne Rourke, associate director of the Bureau of Labor Market Information and Strategic Initiatives, said the state’s job climate saw signs of improvement in February. The number of employed persons rose 14,000 while the number of unemployed fell by 6,000. The labor force grew by 9,000.

Michigan’s jobless rate is 0.9 percentage points higher than the national rate.

Payroll jobs increased by 0.2% in February with gains in trade, transportation and utilities as well as professional and business services. Job losses were focused in the auto sector as a result of temporary layoffs stemming from the global shortage in semiconductors.

In a statement, Gov. Gretchen Whitmer noted that Michigan has added 172,000 nonfarm payroll jobs in the past year.

The state is still 141,000 jobs below the February 2020 prepandemic numbers, however.

“Michigan is on the move,” Whitmer said in a statement. “Through tough times, Michiganders continue to work hard and build on our economic momentum. For ten straight months, our economy has added jobs and our unemployment rate continues to decrease. From February 2021 to February of this year, Michigan added 172,000 jobs, and that trend will continue as we build on our efforts to empower economic development, deliver relief to small businesses, and cut taxes for seniors and working families.”


Shirkey, Who Once Praised Craig, Endorses Dixon

Republican gubernatorial candidate Tudor Dixon landed the endorsement Wednesday of the state’s top elected Republican official with Senate Majority Leader Mike Shirkey announcing his support of her.

It is a big change from last July when Shirkey (R-Clarklake) lavished praise on one of Dixon’s rivals for the GOP nomination, former Detroit Police Chief James Craig, when Mr. Craig gave his first speech as a potential candidate at a Republican Party gathering in Jackson.

Dixon has had some success in landing endorsements from prominent Michigan elected officials, but Shirkey’s is the most significant yet. She also has endorsements from U.S. Rep. Bill Huizenga (R-Zeeland) and U.S. Rep. Lisa McClain (R-Bruce Township).

There is a large crowd of Republicans seeking their party’s nomination for the right to take on Democratic Gov. Gretchen Whitmer in November but so far none has been able to emerge as the favorite. At one point, former Detroit Police Chief James Craig looked like the clear frontrunner but fundraising issues and staff turmoil have raised concerns about his standing in the campaign.

It’s also unclear how many Republicans will attain access to the August primary ballot given the requirement that they file no fewer than 15,000 valid signatures from registered voters by 4 p.m. April 19. So far, two Republican candidates have filed signatures: Michael Markey and Garrett Soldano.

Shirkey said Dixon reminded him of Florida Governor Ron DeSantis.

“When I look around at the people running for governor today, it’s clear to me that Tudor Dixon would be the Ron DeSantis kind of governor. A governor who inspires and leads, not a governor who just bosses people around. A governor who gets in the trenches with us, not a governor who rules us by decree,” he said in a statement. “I’m excited to endorse the person I think has the right values, the right temperament, and the right leadership qualities to turn Michigan around: Tudor Dixon. I’ve worked with Governor Whitmer about as closely as anyone in the legislature has and I’m here to tell you, I sure wish I’d been working with Governor Dixon instead because Michigan would be a very different – and better – place.”

Shirkey was on hand last summer at a speech Craig gave in Jackson prior to his formally announcing his bid. He was one of several Republican elected officials attending the speech where Craig explained more about why he is a Republican and delivered opening remarks.

In introductory remarks, Shirkey lavished praise on Craig.

“A man who leads by bringing people together, finding common good, standing strong to defend the importance of law enforcement and keeping our community safe,” he said. “A man who grew up on the streets of Detroit, who had (a) distinguished career in law enforcement across this great country and came back to the city and the state that he loves. A man who defends our Second Amendment rights in earnest, is featured on the front page of the NRA magazine. This guy knows how important our Second Amendment rights are. A man who is here today to join with us on this special day in this country’s special history. A man with I hope a very bright, bright future in our party our state and our nation.”

Michigan Democrats were quick to spin Shirkey’s endorsement of Dixon as more of a rebuke for Craig than a coup for Dixon.

“Senate Majority Leader Mike Shirkey’s endorsement of Tudor Dixon certainly must sting for James Craig, as the coronation grace he’s enjoyed since teasing his run last May has since been replaced with body blow after body blow for his spiraling disaster of a campaign,” said Rodericka Applewhaite, a Michigan Democratic Party spokesperson.