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Sept. 25 | This Week in Government: Budget Decisions, Calls for National COVID-19 Strategy

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. See below for this week’s headlines.

  1. Budget Deal Mixes Investments, Patches, Reductions
  2. Pure MI, Going Pro, ‘Enhancement Grants,’ Reconnect Dominate LEO
  3. Whitmer Again Urges National COVID Strategy As U.S. Sees 200K Deaths
  4. Consumers, DTE Join Effort To Build Out EV Charging Network
  5. House OKs COVID-19 Liability Protections With Tight Margins

Budget Deal Mixes Investments, Patches, Reductions

The 2020-21 fiscal year budget agreed upon by Gov. Gretchen Whitmer and a bipartisan majority of the Republican-led Legislature navigates the tumult caused to state revenues by the coronavirus pandemic through a mixture of funding shifts that avoided wholesale programming cuts and freed up enough money for Gov. Whitmer and legislators to invest in some of their top priorities.

Wednesday was an extraordinary day at the Capitol that saw the culmination of weeks of work outside of public view by a small number of legislative and administration staff and legislators to cobble together the budget for the fiscal year that starts in eight days.

Not until 8 a.m. was there anything official about what the budget would contain when the House and Senate Fiscal agencies posted their analyses of the education omnibus budget (SB 927) and the general omnibus budget for departments and other major budget areas (HB 5396). The actual bill for the general omnibus budget did not become publicly available until about 5 p.m. By 5:20 p.m., both bills had passed both houses of the Legislature – passage of the entire budget 24 hours after legislators were briefed on high-level details and only eight hours after the fiscal analyses were online.

Not in memory have a governor and the Legislature come to a budget agreement where virtually no one outside of the governor, top staff and a few legislators developed a full fiscal year budget with no apparent outside input and then jammed it through the Legislature within hours after making it public.

Yet it also was a complete 180-degree shift from this time a year ago, when negotiations broke down in acrimony between Gov. Whitmer and Republican legislative leaders, leading to a protracted budget standoff that was not resolved until December, nearly three months into the start of the fiscal year and even then left some programs in tatters.

Gov. Whitmer, House Speaker Lee Chatfield (R-Levering) and Senate Majority Leader Mike Shirkey (R-Clarklake) issued a joint statement praising each other that would have been unthinkable a year ago when they were sharply, vehemently at odds.

“Saying that the development of the 2021 budget has been difficult would be an understatement, but I am very proud that we’ve been able to work together with the Legislature to put together a budget that moves Michigan forward,” Gov. Whitmer said. “I’d like to thank Senate Majority Leader Mike Shirkey and Speaker of the House Lee Chatfield for their hard work and collaboration at a time when Michigan needed us to come together. I appreciate their commitment and the trust that has been built over this past year.”

Shirkey said the budget “increases school funding, protects funding for local communities, and supports the men and women who keep us safe. And, we did it all without raising taxes on our hardworking citizens. This budget is proof that our citizens and our state benefit most when there is an equal and cooperative relationship between the legislative and executive branches of government.”

Chatfield said the budget delivered the resources to keep the public safe and help them make ends meet while protecting funding for other programs and other priorities.

So quick was the process to assemble the bills and for the House and Senate Fiscal agencies’ staff to produce analyses of more than 1,000 pages of legislation that the two agencies had very different takes on whether the $62.8 billion in funds represented an increase or a decrease from the current year. The HFA used Feb. 6 – well before the massive supplementals loaded with federal coronavirus relief funds were enacted – as its year-to-date point of comparison while the SFA used Sept. 15.

This led to major differences. The HFA shows the final budget as a 7.4% increase in all funds from the current year and a 2.2% increase in General Fund. The SFA shows the final budget as a 7.9% reduction in spending from all funds and a 9.7% increase in General Fund spending. Gongwer News Service story’s on today’s budget action use the HFA numbers when comparing year over year spending.

Both agencies agree combined spending for the fiscal year starting Oct. 1 is $62.8 billion ($10.6 billion General Fund).

The education omnibus budget, covering K-12 schools, higher education and community colleges, flew through the Senate 36-1 and the House 103-2. The budget for state departments, agencies and other major budget areas also won overwhelming approval, 101-4 in the House and 37-0 in the Senate.

A huge upswing in forecasted revenue spared Gov. Whitmer and lawmakers from a feared $3 billion shortfall. Instead, they reduced General Fund spending by $250 million though did so mostly through funding shifts, not through cuts to programs. Probably the only major spending cut was the one announced Monday with the announcement the Department of Corrections will close the Detroit Reentry Center to save $12 million.

Another balm was remaining federal coronavirus relief funds that allowed Gov. Whitmer and lawmakers to repurpose General Fund elsewhere. It allowed the swapping out of $191 million in General Fund for Department of Corrections payroll, $45.5 million in General Fund from the Department of State Police budget and $22.5 million General Fund at state psychiatric hospitals.

“This year is about protecting funding,” said Rep. Aaron Miller (R-Sturgis), chair of the House Appropriations School Aid and Dept. of Education Subcommittee. “Let’s celebrate protecting this year’s funding.”

Rep. Shane Hernandez (R-Port Huron), the House Appropriations Committee chair who was one of the few involved in building the budget, said there will likely be difficult decisions ahead for the state because federal funds helped plug holes.

The details of the budget announced Wednesday matched what was first reported Tuesday in Gongwer News Service – a small increase for K-12 schools, flat funding for higher education and community colleges, among other moves.

Both parties could point to the fulfillment of some key spending priorities. Gov. Whitmer’s proposed expansion of postpartum coverage to mothers on Medicaid got a green light, as did her Michigan Reconnect program to pay for postsecondary education for some residents and workers.

Two Republican priorities Gov. Whitmer vetoed in the in the 2019-20 fiscal year budget – Pure Michigan and Going Pro – will see funding, though Pure Michigan will be at a far smaller level than it was.

And as has seemingly become custom in the past couple years, there was a pot of funds for local projects coveted by lawmakers called Michigan Enhancement Grants (about $31 million worth).

Rep. Jon Hoadley (D-Kalamazoo), the minority vice chair on Appropriations, said the budget even in trying times manages to invest in public health, education, public safety, jobs and families.

“We are playing defense, but we came together as one team to make sure we could invest in the priorities of our state,” he said.

Sen. Curtis Hertel Jr. (D-East Lansing), minority vice chair of the Senate Appropriations Committee, called this budget “by far the most collaborative process I’ve been part of.” He lauded Sen. Jim Stamas (R-Midland), the Senate Appropriations Committee chair, for his approach and said the content of the budget was commendable, especially given how dire the situation seemed just months ago.

“This budget is an amazing budget in that I don’t think anyone three months ago thought we would have gotten here,” he said.

Stamas thanked staff and legislators from both parties, but decided to cut his speech short, recalling one of the Capitol’s long-time axioms that seemed to underscore the tactical approach to the budget. “When you’ve got the votes, vote,” he said.

Pure MI, Going Pro, ‘Enhancement Grants,’ Reconnect Dominate LEO

Several high-profile programs receive new funding in the Department of Labor and Economic Opportunity budget with lawmakers and Gov. Gretchen Whitmer even finding room for $31 million in local projects designated by legislators dubbed again Michigan Enhancement Grants.

LEO sees one of the largest overall increases with the infusion of federal CARES Act funds and new state job training and development grants under the conference agreements passed Wednesday.

The overall budget for LEO increases 24.4 percent to $1.63 billion. General Fund is up 35.5% to $192.87 million.

The largest piece of the increase is for the Unemployment Insurance Agency, which saw its federal funds increase by $159.88 million to $294.34 million. The additional funds were provided for the state’s high unemployment rate during the COVID-19 pandemic. The total includes some restricted fund, but not General Fund.

The Michigan Enhancement Grants see $31.29 million General Fund for 33 projects specified in the agreement. The largest of those grants is $5 million for the McLaren Greater Lansing Greenlawn Campus in Lansing for a behavioral health pilot and $3 million each for the McLaren Northern Michigan Cheboygan Campus for 12 new psychiatric beds, the Statewide Preapprenticeship Program and bridge repairs in Allegan County. Kalamazoo County would see $1.8 million for design work on the US 131 interchange and Western Upper Peninsula Workforce Development would see $1.1 million to cover a retirement fund shortfall. There are also grants for rail improvements in Alcona ($41,000), Bay ($94,000), Chippewa ($200,000), Grand Traverse ($500,00) and Gratiot ($211,000) counties.

Gov. Gretchen Whitmer had vetoed a similar set of grants in supplemental appropriations earlier in the year. Legislators had agreed to the veto because the pandemic had just begun with uncertainty about state revenues prompting the pull back on spending.

Gov. Whitmer had also vetoed the Pure Michigan program for the current fiscal year. The legislative agreement would partially restore the program with $15 million General Fund matching $5 million each in local and private funds.

Going Pro, which provides grants to employers for job training, would be restored to $28.67 million, including $19.13 million General Fund. That funding also was vetoed for the current fiscal year.

The Michigan Works! Association praised inclusion of the funding in the budget.

“The need for highly-skilled talent has never been greater in our state. The COVID-19 crisis has created an even greater need for reskilling and retraining dollars for Michiganders,” Luann Dunsford, CEO of the group, said in a statement. “Many Michigan residents are now facing situations in which they will need to pursue a completely different career path and this funding will go a long way toward helping with that situation. Going PRO Talent Fund has proven to be one of the most effective resources available to address Michigan’s talent crisis.”

The Michigan Reconnect Program would see $30 million, all restricted, restored of the $35 million vetoed for the current fiscal year.

The Community Development Block Grant program would increase $15 million to $62 million, all federal funds, with the addition of CARES Act money.

The department would also see $10 million in federal Coronavirus Relief Fund for grants to various health and human services programs.

The budget replaces General Fund in several lines, including moving $11.13 million from Business Attraction and Community Revitalization. 21st Century Job Funds more than offsets the shift, to provide an overall increase of $20.62 million to $100 million gross. The program still includes $40.65 million General Fund.

Workforce development programs would see $3.2 million in General Fund cuts, leaving $385.61 million gross and $6.28 million General Fund.

Arts and cultural grants would lose $650,000 General Fund with no proposed offsets.

Rural blight elimination grants, $250,000 General Fund, would be eliminated, as would $2 million in one-time General Fund appropriations.

Whitmer Again Urges National COVID Strategy As U.S. Sees 200K Deaths

The United States surpassed 200,000 COVID-19 deaths on Tuesday, leading Gov. Gretchen Whitmer to reiterate her call to President Donald Trump to develop a national new coronavirus strategy.

“As we remember and honor all of those we have lost to this virus, we must not forget that each life was a person who had a story: plans, dreams, and more life to live,” Gov. Whitmer said in a statement. “We owe it to our families, our neighbors, all of the brave frontline workers, and to our fellow Michiganders to continue taking this virus seriously and prevent more devastation in our communities. My heart is with the families of those whose lives were tragically cut short by COVID-19.”

Gov. Whitmer said during the last six months, the state has worked hard to slow the spread of the virus while the entire country has also grappled with the same emergency.

“At this moment, all 50 states and the federal government are in some sort of declared emergency,” she said. “We have made tremendous progress as a state and as a nation, but we must stay the course. As we continue to face to the biggest health emergency of our lifetime, we may never know the number of lives that have been saved, but we do know that in doing our part by wearing a mask, remaining six feet apart, and staying home and stay safe, we have saved many lives.”

Consumers, DTE Join Effort To Build Out EV Charging Network

Consumers Energy and DTE Energy on Tuesday announced the two utilities are joining with four other utilities to help in pushing for the construction of electric vehicle charging infrastructure to expand the ability for interstate travel using the vehicles.

The utilities said the goal is to enhance fast charging station infrastructure for the increasing number of electric vehicles on the road by 2022.

In a release, the companies said the additional infrastructure would extend from Michigan to Kansas. The utilities noted that a lack of fast charging infrastructure, making it more difficult for electric vehicle owners to drive long distances, is a significant hurdle to the industry’s growth and preventing more motorists from purchasing such vehicles.

“Consumers Energy is committed to building the backbone of the charging network for electric vehicles across Michigan,” Brian Rich, the company’s senior vice president for customer experience, said in a statement. “We know we can play an important role in charging the growth of EVs in our state and region, and know that will be good for Michigan’s economy, our communities and the environment.”

The other four companies joining DTE and Consumers in the effort to expand infrastructure are Ameren Missouri, Ameren Illinois, Oklahoma Gas and Energy and Evergy. In the release it was noted that the network’s buildout would be subject to regulatory approval in each state.

“DTE has a significant role to play in helping make EVs a viable option for many,” DTE Electric President Trevor Lauer said in a statement. “This pledge, along with the rebates we offer for EV chargers installed at homes and businesses, shows DTE is committed to a future of more environmentally-friendly transportation.”

Statistics from the Edison Electric Institute put the number of electric vehicles on the road today at about 1.4 million, with the possibility of that total reaching 20 million by 2030.

House OKs COVID-19 Liability Protections With Tight Margins

Bills shielding employers from what supporters call potentially “frivolous” lawsuits related to the COVID-19 pandemic passed the House on Wednesday with narrow votes as Democrats and unions oppose the package as a gift to bad actors.

HB 6030 passed 57-49, HB 6031 passed 59-47, HB 6032 passed 83-23, and HB 6101 passed 61-45.

Separately, but related, HB 6159, which provides health care workers immunity, passed 58-48. Supporters said this bill is close to an executive order previously issued by Gov. Gretchen Whitmer on the topic.

Under the bills, employers would not be liable for an employee’s exposure to COVID-19 if the exposure happened during the COVID-19 state of emergency and the employer was in compliance with federal or state law or regulation, executive order or public health guidance. Immunity would not apply if the employer willfully exposed the employee to the disease.

HB 6032 codifies certain employee protections if they test positive for the virus or come into close contact with someone who does. The bill specifies when employees should not report to work due to COVID-19 exposure and allow civil action for aggrieved employees.

While Democrats, unions including the Michigan Education Association and other advocacy groups mostly opposed the bills, no Democratic House members spoke in opposition on the House floor Wednesday.

Rep. Thomas Albert (R-Lowell), one of the main sponsors of the bills, said a wave of lawsuits would hurt already struggling businesses.

“COVID-19 has created an unprecedented situation, and our current laws do not do enough to protect employers and employees who have done nothing wrong from those who are looking to turn the pandemic into their own financial gain,” he said. “An opportunistic attorney can easily pressure someone to settle, regardless of whether they have been negligent, by bringing a class action lawsuit or a flood of individual claims.”

A spokesperson for Gov. Gretchen Whitmer said in a statement the bills were a “solution in search of a problem.”

“Michigan law already provides that anyone taking reasonable care to protect workers and customers can’t be held liable in court,” Tiffany Brown said. “We must remain vigilant in encouraging everyone – individuals and businesses alike – to take reasonable care to protect each other during this pandemic and most Michigan businesses are doing the right thing. Instead of passing this legislation, which is a solution in search of a problem, the Legislature should be focused on helping our businesses implement health and safety standards to keep their employees and customers safe.”