Aug. 19, 2022 | This Week in Government: Expanding Michigan Reconnect, Stamas on Tax Deal, and More

Legislators discussed ways to improve the Michigan Reconnect Program and offered the opportunity for more Michigan residents to earn a post-secondary degree during the House Appropriations Committee meeting Wednesday.

Rep. Ben Frederick (R-Owosso) and Rep. Sarah Anthony (D-Lansing) presented HB 6129 and HB 6130 before the committee, which would modify and expand the Michigan Reconnect Program.

The committee also reported HB 5956, extending the ability for courts to levy some costs on defendants without discussion beyond the need to find a permanent solution. HB 6357 and HB 6358 were also reported. HB 6357 would amend the Public School Employees Retirement Act by lowering the payroll growth assumptions to 1.75 percent. HB 6358 would transfer some state-owned property from the department of corrections to the state land bank authority.

Sponsored by Frederick, HB 6129 would require institutions to demonstrate they are following best practices for supporting adult learners. Those practices include providing credit for prior learning and offering opportunities for work-based learning. The bill would also require institutions to have policies for determining a student’s eligibility to enroll in freshman-level courses without remediation classes. HB 6129 also would set up a system for measuring outcomes of the program and completion rates for students.

“Just ensuring generally that there is a credible system for serving these reconnect students at those institutions who are taking on reconnect dollars to provide that service,” Frederick said. “Those conversations are continuing to happen in a way that really can be fairly assessed and the institutions think they have some measure of control over.”

Sponsored by Anthony, HB 6130 would expand the Michigan Reconnect Program to students between the ages of 21 and 24.

“I’ve heard from so many folks in my community that this is a really powerful statue to expand the Michigan Reconnect Program to a new cohort of men and women,” she said.

The bill also would expand short-term training grants for career training programs. These grants would be available for high-skill, high-wage, in-demand occupations as determined by the Department of Labor and Economic Opportunity. Additionally, the bill would provide flexibility for how many credit hours students would have to be enrolled in per semester.

More than 100,000 Michigan residents have applied to the program since it was launched in February 2021, according to Brandy Johnson, president of the Michigan Community College Association, and the average age of students at community colleges has increased as a result of the bill.

“Michigan Reconnect changed the game for Michigan’s working aged adults, and now Michigan is considered one of the country’s leaders in providing affordable post-secondary pathways for adults that need to upskill,” she said.

Rep. Samantha Steckloff (D-Farmington Hills), who serves on the House Appropriations Higher Education and Community Colleges Subcommittee, spoke in favor of both bills.

“The opportunity of Reconnect is not only essential, but this is a game changer,” she said.

Rep. Ann Bollin (R-Brighton) asked if the program could be modified so that students would know how much of their work experience would be credited to them before accepting enrollment at an institution.

“I’d just like to see it considered earlier on,” she said. “That might help be a determining factor if you get in and then it’s determined that that work credit is not going to count.”

Frederick said that process would be something to consider as part of an institution’s best practices.

Several committee members raised concerns about the lack of opportunities available through the reconnect program to Michigan residents who don’t live in a community college district or who live in a district with a community college that doesn’t offer the program they’re interested in.

Johnson also expressed concerns about the accountability system for community colleges as described in the new bills.

“Because this program just started a year ago, we aren’t sure what that baseline is yet,” she said. “Once we have a baseline, I think we can develop goals for improvements that are reasonable and achievable, so we need a couple more years to calculate that.”

Small Business Association of Michigan President and CEO Brian Calley also spoke in favor of the bills, saying that the program was important for upscaling the state’s workforce and highlighted the importance of creating accountability for institutions.

“Helping people that are already here is the low hanging fruit and the most logical place to start,” he told the committee. “For a program like this, accountability is going to be really important. … I think that everybody is on board with this concept of increasing the completion rates, of course it’s the goal. The question is how you do it, and the bills that are before you would accomplish a really stepped-up process.”

The chair of the Senate Appropriations Committee said talks between lawmakers and the governor’s administration are progressing slowly and he believes a deal is ultimately possible, but he is not fully confident in it being completed at this stage.

Senate Appropriations Committee Track Chair Sen. Jim Stamas (R-Midland) said Tuesday that conversations over a potential tax deal with been slow, with weekly conversations covering different areas.

“Things are slower than I’d like to see personally,” Stamas said, adding the positive is that conversations remain ongoing.

This year being an election year could be a significant factor as to whether a deal will ultimately be reached, he said.”I feel it’s possible,” Stamas said, adding he is not confident at this stage that a deal can be a sure thing.

When lawmakers return for the fall session talks might be able to ramp up, he said.

Gov. Gretchen Whitmer, for her part, has not provided a specific number on what she would be comfortable with for a potential deal. When she signed the education budget in July, she said her hope was that having worked together on a record budget the two sides could come together and get down to business on a deal when lawmakers return in the fall. (See Gongwer Michigan Report, July 14, 2022.)

While Stamas would not get into specifics, he said all sides are largely feeling each other out at this stage to see what an initial framework of a deal could look like.

“It’s just at what point do we … come together,” Stamas said and hammer out a deal.

He compared it to the budget process, where one day, things may be looking good, and the next, the various sides at the negotiating table may have drifted further apart.

Items including the gasoline tax, the sales tax on gasoline, and the EITC are among the items being discussed. The governor’s call on Tuesday for a suspension of the sales tax on school supplies for the upcoming school year added another element to the discussions, he said, stating that it likely was too late to address such a proposal given that most schools are on the verge of returning for the fall semester.

A tax cut has been seen as a priority for months by leaders seeking to provide what they have called relief to families struggling with high inflation and gas prices.

Gas prices, however, have been coming down following a peak earlier this summer. AAA Michigan put the average price of gasoline in Michigan at $3.94 per gallon as of Wednesday. This was down 1 cent from the previous day and well below the $4.63 per gallon price of one month ago. Whether the decline continues or cycles back upward at some point is unclear.

Lawmakers upon completion of the fiscal year 2022-23 budget in late June left Lansing for their summer legislative recess. There is a session day scheduled for Wednesday, followed by the return of lawmakers on Sept. 7 for the beginning of the fall session.

Being an election year, the focus of members has been on campaigning during the summer thus far.

The two sides have appeared to be far apart on the contents of a potential tax deal, however.

Whitmer has called for targeted cuts and an overall smaller package than Republicans, which she repeated in her remarks Thursday. Her proposals have included rebate checks to an unspecified group of taxpayers, expanding the Earned Income Tax Credit, and repealing the so-called pension tax. What the rebates would cost is unclear, but the other proposals are estimated to be in the ballpark of $800 million.

The governor has also been in support of a temporary suspension of the sales tax collected on motor fuel purchases.

Republicans have wanted more broad-based cuts on a larger scale, twice passing packages without negotiations of more than $2 billion in yearly costs. Their packages have included an income tax rate cut, a child tax credit, and more. Whitmer vetoed the most recent GOP tax cut package in June (See Gongwer Michigan Report, June 10, 2022).

The Legislature has also pushed legislation to suspend the state’s fuel taxes and sales tax collected on fuel purchases.

One area of possible bipartisan support in any tax deal could be increasing the EITC. There have been proposals to raise it from 6 percent of a taxpayer’s federal EITC to 20 percent, and other plans to raise it to 30 percent.

The Board of State Canvassers Track is planning to meet on Aug. 31 to determine if two constitutional amendments have sufficient signatures to make the ballot and make any subsequent decision on 100-word summaries.

A notice from the Bureau of Elections dated Friday said the board would consider both the sufficiency of signatures and the potential 100-word summaries for Promote the Vote 2022 and Reproductive Freedom for All during one meeting on Aug. 31.

As of Monday, the bureau has not released a staff report recommending action either way for either proposal.

However, since both actions will take place during the same meeting, the bureau on Friday set the timeline for taking public comment on the 100-word summaries that will appear on the ballot.

Individuals have until 5 p.m. Friday to submit suggested language or explanatory materials to staff.

The Department of State has until 5 p.m. Sept. 9, 2022, to certify ballot contents to county clerks.

Last week, the bureau announced the deadline for challenges to signatures for both Promote the Vote and Reproductive Freedom for All is 5 p.m. Aug. 18.

The bureau announced that it found Reproductive Freedom for All, based on the staff’s face review of the petition, submitted 147,994 sheets containing 735,439 signatures on those sheets that were facially valid. This is down from what the group said it submitted, 753,759, though by far still a record number and well above the 425,059-signature threshold needed for certification.

The bureau is pulling a sample of 514 signatures to determine the validity for certification. If at least 315 are valid, the bureau will recommend certification. If the valid number is between 280-314, then the bureau will draw a larger signature sample. If 279 or fewer signatures are valid, the bureau will recommend denial of certification.

For the Promote the Vote 2022 proposal, the bureau announced its face review and determined there were 137,041 facially valid petition sheets with 650,415 signatures. This was down from the 669,972 signatures the group said it filed but again still well above the minimum threshold.

The bureau is pulling a sample of 570 signatures to determine validity for certification. If at least 390 are valid, the bureau will recommend certification. If the valid number is between 356 and 389, the bureau will draw a larger sample. If the valid signatures total 355 or fewer, the bureau will recommend denial of certification.

In its Friday announcement, the bureau said it is still processing the signatures for both proposals and will post its recommendation on its website.

The reelection campaign of Michigan Supreme Court Justice Brian Zahra saw heavy financial support from members of the DeVos family, giving the maximum amount each to his campaign during the pre-convention reporting cycle, as did GOP high court bench candidate Paul Hudson, campaign finance disclosures filed Tuesday show.

The same cannot be said of Republican attorney general candidate Matthew DePerno nor secretary of state candidate Kristina Karamo, who saw no support from the Republican megadonors who have supported their fellow executive office gubernatorial candidate in Tudor Dixon.

Both DePerno and Karamo also appear to be at a serious disadvantage in cash on hand compared to their opponents and incumbents, Attorney General Dana Nessel and Secretary of State Jocelyn Benson, who have cash on hand to the tune of millions of dollars.

Much of Karamo’s contributions came from individuals outside of Michigan and did not net contributions from familiar names in state Republican politics and not from the DeVoses.

DePerno saw his largest support from Rep. Matt Maddock (R-Milford) and his leadership fund, as well as several of the former GOP gubernatorial candidates, like Ryan Kelley and his wife Tabitha, Perry Johnson, Kevin Rinke, and Ralph Rebandt. The attorney general candidate also dumped more than $80,000 into his own campaign via his law firm and received support from his consultant, John Yob, and his wife, Erica Yob, each giving the maximum amount allowed.

The attorney general candidate raised $577,258 in the period leading up to the party’s Aug. 27 convention and a total of $768,990 throughout the cycle. He received $424 in in-kind expenditures and spent $512,731 during the reporting period between January and August. DePerno spent $643,284 overall throughout the cycle.

That leaves him with just $125,706 cash on hand. Compared to Nessel, she raised $1.55 million during the period and $3.74 million overall throughout the cycle. She has $2.51 million cash on hand.

DePerno owes his committee $94,670.

His expenditures show that a majority of his campaign cash was spent on consulting work with Strategic National, owned by Yob, two additional individual consultants, and LCM Strategies for data consulting.

DePerno also spent $5,737 on catering at former President Donald Trump’s Mar-A-Lago estate at 1100 S. Ocean Blvd in Palm Beach, Florida, although the contribution lists the same address but in Alexandria, Virginia, which is likely a typographical error.

Looking at Karamo’s disclosure, the secretary of state candidate raised $467,373 during the reporting period and raised $695,577 overall throughout the cycle.

She spent $323,176 during the period, leaving her with $277,250 cash on hand. Compared to Benson, the incumbent raised $2.1 million during the reporting period, $3.76 million during the entire cycle, and has $3.2 million cash on hand.

One race observer noted on Twitter that the cash-on-hand advantage Benson holds over Karamo is 11.5 to 1.

Michigan Republican Party Chair Ron Weiser and Robert Beale of Premier Property Management were Karamo’s largest in-state supporters, followed by two others from Texas and Georgia. While there are some donors listed as living in Michigan, a fair amount of her financial support came from residents in various states around the nation.

Unlike DePerno, she received no support from previous gubernatorial candidates who had sought the nomination against Dixon except for Johnson, who gave $950 to her campaign, nor did she net any donations from the Maddock Leadership Fund or Maddock himself.

A majority of her expenditures were spent on billboard advertising, consulting work for strategy and fundraising, bumper stickers and yard signs, and other advertising. She also spent $1,515 for event venue rental at Trump National Golf Course in New Jersey on Aug. 11.

As to the Supreme Court candidates, Zahra and Hudson both got big boosts from the DeVos family, including both Dick DeVos and former U.S. Secretary of Education Betsy DeVos, Daniel DeVos, Doug DeVos and his wife Maria DeVos, and Suzanne DeVos VanderWeide. Each donated the maximum amount to both Zahra and Hudson’s campaigns.

That shows how important flipping the high court bench majority may be to the DeVos family as well as other high-ranking GOP power players. The court fell into a 4-3 majority of Democratic Party-nominated justices consisting of Chief Justice Bridget McCormack, Justice Richard Bernstein, Justice Megan Cavanagh, and Justice Elizabeth Welch – the latter of which secured the liberal majority after she won the election to fill the seat of now-retired Justice Stephen Markman, a GOP stalwart.

Zahra raised $435,025 during the entire cycle and garnered $3,546 in in-kind contributions while spending $92,166 of that money during the reporting period and $141,923 overall throughout the cycle.

He owes $100 in debt to his campaign committee and has $342,858 cash on hand.

Hudson raised $450,075 during the cycle, slightly more than Zahra, but also dumped $250,000 of his own money into his campaign. He spent $124,215 throughout the campaign cycle and has $325,859 cash on hand, a slight disadvantage compared to his likely fellow nominee in Zahra.

While it may be the GOP’s aim to flip the makeup of the Supreme Court, ousting incumbent high court justices is often difficult as their incumbency offers a unique advantage before voters – evidenced by those seeking reelection getting the designation of incumbent justice next to their names on the non-partisan section of November general election ballots.

Hudson, therefore, is gunning for Bernstein’s seat, whereas likely Democratic nominee and current Rep. Kyra Bolden (D-Southfield) is aiming to unseat Zahra.

As it stands, Bolden has a slight cash-on-hand advantage over Zahra, with $388,400 compared to his $342,858. Bernstein has $278,608 cash on hand, giving Hudson the money edge going into the general election.

The state’s seasonally adjusted unemployment rate fell by 0.1 percentage point in July to 4.2%, the Department of Technology, Management and Budget announced Wednesday.

Employment rose by 8,000, with unemployment falling by 5,000. That boosted the labor force by 3,000 though the labor force participation rate of 60.1 percent was unchanged.

The state’s unemployment rate remains above the national average, which for July was 3.5%.
“Michigan’s jobless rate slid down to 4.2% in July after lingering at 4.3% over the previous three months,” said Wayne Rourke, associate director of the Bureau of Labor Market Information and Strategic Initiatives, in a statement. “Payroll jobs advanced by 26,000 in July, reflecting gains throughout most major statewide industries.”

The largest payroll employment gains came in the leisure and hospitality sector, with growth from June of 10,000 or 2.6%.