Yesterday, the Michigan House adjourned until Dec. 31, effectively ending the Democratic trifecta before the officially scheduled final days of the Michigan legislature. However, the Senate still has second-chamber bills from the House, which they can pass and send to Gov. Gretchen Whitmer’s desk if there are no amendments.
What Happened This Morning, Dec. 20
Before 7 a.m. on Dec. 20, among the forty bills passed overnight, the Michigan Senate passed two bills that the Chamber was closely monitoring, with one major piece of legislation that has been a Chamber priority for many years.
- Research and Development Tax Credit: HB 5100 and HB 5101 provide a tax credit for research and development that occurs in the state. The two qualified types of businesses that may receive credits are entities subject to corporate income tax or any flow-through entity subject to tax withholding requirements under the Income Tax Act.
- Businesses that employ over 250 people are eligible for up to $2 million, and businesses under 250 people are eligible for up to $250,000. There are also bonuses for working with Michigan’s research universities.
- The Chamber encourages you to contact Gov. Whitmer and urge her to sign these bills.
- Regional Transit: HB 6088 passed the Senate just before noon on Friday. This bill allows Wayne County to exceed their millage cap and place a county-wide transit millage on the ballot.
- Should Wayne County residents vote in favor of this proposal, Wayne County will join Macomb and Oakland Counties in having SMART transit services available to every resident in every corner of the county.
- “80/20”: Public employee unions would have more ability to collectively bargain their members’ health insurance costs under legislation that moved early this morning in the Senate on a party-line vote after 6:30 a.m. HB 6058 sets up public entities and universities for financial devastation, as the potential to spend millions of dollars more in health care costs is now a reality.
- The Chamber lobbied against these bills, believing that many local governments would now have to raise revenue through taxation to make up for these unexpected costs.
What This Means
With the House’s adjournment and fewer actions for the Senate to take, many items failed to reach the Governor’s desk, bringing breathing room to businesses and advocacy groups worried about extreme labor policies being pushed through.
- Local Preemption: The proposed package from the Senate would have allowed municipalities to create their own local labor laws, such as minimum wages and mandatory family medical leave, resulting in a patchwork of labor laws across the state.
- Polluter Pay: The proposal would have overturned Part 201, the standard for Michigan’s environmental cleanup and a framework across the nation of fair industry standards.
- Price Gouging: In an overreach of government regulatory powers, especially that of the Attorney General, the proposal would have prohibited price increases during declared states of emergency, leaving small businesses to foot the bill for supply chain challenges.
- Tax Evaluation Changes: References to abandoned properties and storefronts would have been banned from tax evaluations, resulting in higher tax bills in areas that are economically challenged.
What’s Next
Many items remained on the agenda for the House, leaving uncertainties in the air that will need to be solved by the next Legislature.
- Earned Sick Time and Tipped Minimum Wage: With the Supreme Court decision this summer enacting a 2018 voter-initiated change to employment law, many uncertainties exist within the Earned Sick Time Act (ESTA) that need to be addressed before its effective date of Feb. 21, 2025.
- Therefore, Michigan businesses need to prepare now for the new year as ESTA currently stands, with regular minimum wage increases, a tipped wage credit phase-out, and extreme changes to earned sick time.
- Extend SOAR Funding: The keystone economic development tool has brought hundreds of jobs and billions of dollars in private investment to the state. With the funding all but dried up, the new Republican-controlled House will need to coalesce around a solid economic development strategy.
- HIRE Michigan: These bills would have brought back tax credits for businesses expanding in Michigan, creating thousands of high-paying jobs.
- Productivity Credits: The Michigan Senate was successful in creating a new program for commuting sentences of inmates completing workforce training, but the House failed to ever take up this legislation. Had this passed, there would have been a direct influx of returning citizens into the workforce, particularly in entry-level positions that have the highest vacancy levels.
The Detroit Regional Chamber looks forward to working with Speaker-elect Matt Hall to create a more economically competitive state that continues Michigan’s strong growth. The Chamber extends its gratitude to Speaker Joe Tate for his dedicated service to Michigan and looks forward to working with him in his upcoming term in the legislature.