May 26, 2023 | This Week in Government: Dem Leaders Pushing New Public Safety Fund Supported by Sales Tax

House Speaker Joe Tate is backing the creation of a new trust fund to supplement public safety and violence prevention using revenue from the state sales tax.

“We know our local partners are stretching available dollars to help keep neighborhoods safe and prevent escalation of violence, but they need more support from our state,” Tate (D-Detroit) said during a press conference Wednesday.

Tate was joined by the bill sponsors, Rep. Alabas Farhat (D-Dearborn) and Rep. Nate Shannon (D-Sterling Heights), along with Detroit Mayor Mike Duggan, Detroit Police Department Chief James White, and Grand Rapids Police Department Deputy Chief Joe Trigg to discuss the legislation.

“The overarching aim is to provide local communities with the additional funding they need to address crucial public safety and violence prevention,” Farhat said. “Local governments are struggling with unique issues that require stable funding.”

HB 4605, sponsored by Shannon, would amend the state’s sales tax law so that 1.5% of the money collected at a rate of 4% would be added to a new Public Safety and Violence Prevention Fund, which would be created by Farhat’s bill, HB 4606.

For the current fiscal year, an estimated $1.6 billion from sales tax revenues is expected to go to the General Fund. The bill would pull just over $100 million from that total.

The money would be distributed proportional to a municipality’s share of the reported statewide violent crimes, as determined by the three most recent annual crime reports from the Department of State Police. For example, if a city accounted for 5% of the crime reported in the state, it would receive 5% of the total fund. No municipality would receive more than 25% of the total disbursement each month, and the goal is to deplete the fund on an annual basis, Farhat said.

The money couldn’t be used to cover existing expenses within a department unless there was a decline in the estimated total general fund revenue for the municipality for the previous fiscal year. The funds would be required to go toward new expenses, like supporting investigative work, community policing, additional staffing, and mental health resources.

“The idea is that we want municipalities to be able to meet their obligations to keep residents safe, and we acknowledge that public safety presents unique obstacles in every community,” Farhat said. “To increase public well-being and decrease violence, we have to take a comprehensive approach.”

Duggan said that the bill package was a way to address rising crime.

“We are seeing far more incidents of violence from people who have been in and out of the mental health system, and so we could just say crime is up and throw up our hands, or we could do something,” he said. “We know what the answers are. Up until now, we haven’t had the resources.”

Mental health-related calls account for more than a third of calls for service in the state, Farhat said.

In Detroit, the police department has responded to 6,137 mental health-related calls this year compared to 5,455 last year during the same time period, White said.

“We are facing unprecedented gun violence and mental health related calls of service in this country and in this state,” he said. “We can’t arrest our way out of crime. …The proposal today will help us do innovative things that we can’t do right now because we don’t have the resources.”

White said Detroit would use the funding to address gun violence, employ neighborhood police officers, expand its mental health unit, fill vacancies, and address staff shortages.

Trigg said the bill would provide public safety departments with critical funding for additional officers.

“Building relationships is nothing new. You’ve got to be there, and you’ve got to be present, and that’s what we’ve lost with our low numbers,” he said.

Leaders said that the fund puts a specific emphasis on public safety that wouldn’t be achieved simply by increasing local revenue sharing.

“We want to ensure that the state is supporting our local municipalities around public safety. How are we creating those safe and strong communities?” Tate said. “This is a real opportunity for us.”

Both bills have been referred to the House Local Government and Municipal Finance Committee.

Democrats said Tuesday an initial hearing is expected to be held next month on legislation that would phase out the use of fossil fuels for energy production in the state within 15 years, saying the time is now to make a strong push toward a renewable energy future.

Senate Majority Floor Leader Sam Singh (D-East Lansing) told reporters during a press conference on the Capitol lawn the first hearing on the package he and other Senate Democrats introduced last month is expected to be held before the Senate Energy and Environment Committee in June.

Senate Democrats introduced legislation that would phase out coal-fired power plants in the state by 2030 and create a 100% renewable energy standard by 2035 (See Gongwer Michigan Report, April 12, 2023).

Singh acknowledged that the proposals could lead to negotiations with the House and other stakeholders in what would be the state’s biggest change in energy policy since the passage of the 2016 energy law.

“When we do this type of activity, it really does require all people to come to the table,” Singh said. “I wouldn’t be surprised if you don’t see some kind of master deal at some point in time.”

The senator said grid reliability will be a key priority along with climate readiness of the grid.

Now is the time for such a move, Singh added, pointing to the billions in federal monies the state has access to under federal legislation passed during the coronavirus pandemic.

“We have federal dollars and resources that we’ve never seen before,” Singh said. “As you pool down those federal resources with the state dollars that we’re going to put into our budget, this is going to make the transition much easier.”

He added that the public can expect to see record spending in the budget on climate change activities.

Sen. Sue Shink (D-Northfield Township) said in conversations with utilities there is a willingness to engage with the process.

She acknowledged utilities have made some progress on expanding their use of renewables in their energy portfolios but said more can be done.

“If you watch the ads, they’re already there. If you look at the reality, it’s not quite the same as the ads,” Shink said.

Two of the state’s largest utilities, DTE Energy Company and Consumers Energy Company, have in recent years made multiple announcements of plans to phase out its coal-fired power plants and produce their electricity through renewables.

Consumers announced a goal of ending its use of coal by 2025 (See Gongwer Michigan Report, June 23, 2021). DTE has announced it is seeking to phase out its coal plants by 2035 (See Gongwer Michigan Report, November 3, 2022). Consumers has set a goal of achieving carbon neutrality by 2040 and DTE by 2050.

Rep. Jenn Hill (D-Marquette) said House legislation is still being prepared to be introduced. She pointed to recent examples of extreme weather in the U.P., including flooding and then a massive May snowstorm as being signs of climate change.

“We are seeing the immediate consequences of climate change right now,” Hill said.

Wesley Watson with the Michigan League of Conservation Voters said Michigan has reached a critical moment to pursue policies that would protect residents and improve the state’s environment.

“We have the opportunity clean up our air, clean up our water and protect our health and ensure a livable future for our kids and our grandchildren, because water is a basic human right,” Watson said.

Brownfield redevelopment funding would be expanded under a Senate bill package heard before a House panel on Tuesday.

The package – SB 129, SB 130, SB 131, SB 132, and SB 289 – would update the Brownfield Redevelopment Financing Act and allow housing development to be included under brownfield redevelopment funding. Sponsored by Sen. Jeremy Moss (D-Southfield), SB 289 would modify tax capture revenues to include sales and use tax capture revenues to allow for more flexibility in the program. The bill would also remove the $800 million cap on the total amount of income tax capture revenues, and withholding tax captures revenues the Michigan Strategic Fund and Department of Treasury could commit to the program. It would also increase the yearly cap on total capture from $40 million to $80 million.

“There is no other economic development program that is designed for or capable of supporting brownfield redevelopment of this scale, magnitude or impact,” Moss said. “These plans will have a transformational impact on local economic development and community revitalization based on the extent of brownfield redevelopment, growth and population, commercial activity and employment that will result from the plan.”

Brownfield redevelopment legislation was first passed in 2017, and Moss told the House Economic Development and Small Business Committee that it’s proven effective.

“This is a tool in our toolbox that works to grow our population, retain and attract talent and build the kind of vibrant locations that people want to live in, while most importantly including input from local communities,” he said.

As the state nears the current cap, it’s important that the legislation is updated.

“All of our partners across the state are now saying we need to reauthorize it,” said Jared Fleisher, vice president of government affairs for Rocket Companies.

The legislation would also improve the program to make it easier for smaller communities outside the population hubs of Detroit and Grand Rapids to be awarded funding.

“Grand Rapids doesn’t compete with Detroit. Pontiac doesn’t compete with Grand Rapids. The Upper Peninsula doesn’t compete with Grand Rapids. We’ve tiered it and mandated for each of those projects each of those tiers,” Fleisher said.

The economic development needs of municipalities are different now than they were before the pandemic, Fleisher said. Housing has become increasingly important.

“The world has changed, and the law needs to change,” he said. “This allows sales and use taxes to go to the formula so the program can support these live, play developments. And it doesn’t favor some developments and disfavor others.”

The legislation would have no effect on the School Aid Fund, Fleisher said, though the Senate fiscal analysis said that it could reduce the overall revenue for the School Aid Fund through a decrease in the State Education Tax.

Under current law, 35% of all projects are committed to communities with fewer than 225,000 people. The change would require 66% of the projects to be committed to communities with fewer than 225,000 people. The Senate adopted an amendment to the legislation requiring around one-third of the plans to be in communities of 100,000 or fewer.

“Our collective challenge is not the capacity of the program, it’s how do we educate folks in other communities, in northern Michigan, to actually take advantage of the program,” Fleisher said.

If no smaller cities apply for the funding, then larger cities like Detroit and Grand Rapids could be granted the money. Five projects will still be approved for brownfield redevelopment.

“There is a long-standing limitation on how many projects an area can get in the interest of geographic equity,” Fleisher said.

Pontiac Mayor Tim Greimel also testified in support of the legislation.

“We have communities all across the state that have been ravaged by industrialization, that have been ravaged by demographic shift … that have been really devastating,” Greimel said. “These bills are about really ramping up the state’s commitment to rejuvenate older cities.”

Greimel said that brownfield redevelopment often helps older, low-income communities of color.

“This legislation is about the state really committing resources to ensuring that communities have a fighting chance to get back on their own two feet,” he said. “Without these tax incentives, those redevelopments would never happen.”

Grand Rapids Mayor Rosalynn Bliss also supported the bills.

“If we’re going to be a state with a growing population, we have to invest in cities, and we have to have cities and places where people want to live and raise their families,” she said. “This tool will allow us to do that.”

Shannon Morgan, managing partner of Renovare Development, also testified in support of the legislation. Morgan is working on mixed-use development projects in Munising, and she said the expansion to current brownfield development laws would help those get across the finish line.

“Over the last several years, Munising has become the poster child for the Pure Michigan campaign, and thus has seen a 70% increase in visitor-ship. This visitor-ship has impacted the community … they have not seen any new housing in over 40 years. They have local small businesses that want to grow, but simply cannot because of the lack of housing,” she said. “The transformational impact to this community will … have a lot of impact for all the local businesses.”

Jennifer Rigterink of the Michigan Municipal League said that the bills would allow a lot of important projects to happen in smaller Michigan cities.

Officials from the Grand Rapids Chamber of Commerce, Lakeshore Advantage, the city of Rochester Hills, the city of Sterling Heights, the Saginaw Chamber of Commerce, Southwest Michigan First, the Lansing Economic Area Partnership, and the Home Builders Association of Michigan all submitted support for the legislation, among others. The Mackinac Center for Public Policy opposed the bill.

No action was taken on the legislation on Tuesday.

Gov. Gretchen Whitmer urged legislative leaders to continue with the state’s economic strategy of investing in economic development efforts in a letter sent Monday in a bid to set the tone for budget negotiations.

“Our economic strategy is working,” Whitmer said in the letter, citing higher than projected corporate tax revenues, low unemployment rates, high participation in the labor force, and tax cuts passed earlier this year through legislation.

“All this progress has been powered by our economic development efforts which have helped us secure thousands of good-paying manufacturing jobs and brought home critical supply chains of cars, chips, and clean energy,” she said. “As I said in my state of the state earlier this year, for too long we were fighting with one hand tied behind our back. Now, we are competing with anyone and everyone to bring the next generation of manufacturing home to Michigan.”

Whitmer praised Michigan’s “economic development tools,” during the State of the State address, citing many projects supported by the Strategic Outreach and Attraction Reserve fund, which is better known as SOAR (See Gongwer Michigan Report Jan. 25. 2023).

In her budget proposal, introduced in February, Whitmer requested a $500 million deposit into the SOAR fund. That sum has already been contentious in the Department of Labor and Economic Opportunity budget passed by the Senate (See Gongwer Michigan Report May 11, 2023) and was left out of the House’s budget entirely (See Gongwer Michigan Report May 2, 2023).

Earlier this term, the House struggled to pass supplementals with funding for SOAR because of the fund’s unpopularity with some members of the Democratic majority (See Gongwer Michigan Report Feb. 9, 2023).

House Speaker Joe Tate (D-Detroit) did not return a request for comment on Monday prior to publication.

In response to the letter, Senate Majority Leader Winnie Brinks (D-Grand Rapids) agreed that Michigan was on the right track.

“Governor Whitmer is right, we have so much going for us right now with revenues up, unemployment down, and new policies going into place that make Michigan an even more attractive place to get an education, raise a family, open a small business, or retire,” she said in a statement. “A rising tide lifts all boats, and right now we are focused on putting together a smart budget that ensures all Michiganders share in our state’s economic successes.”

The House and Senate have passed their own versions of the budget and have started the process to trigger budget conference committees, which could happen as soon as this week.

Senators took the chamber’s first-ever vote Tuesday on legislation that would ban discrimination based on a person’s display of their natural hair.

SB 90 passed the chamber easily by a wide margin. Sen. Sarah Anthony (D-Lansing) said it was significant progress from earlier attempts at pushing similar legislation, which she said years ago was widely dismissed by others as not being a serious issue.

The bill would implement the Creating a Respectful and Open World for Natural Hair Act. Specifically, the legislation ties the definition of race in the Elliott-Larsen Civil Rights Act to include traits historically associated with race, including hair.

Anthony told reporters following the 33-5 vote for SB 90 that when she introduced similar legislation in her first term, she was laughed out of the room at times over the bill. Since then, support for it has grown.

“There’s been many rooms that we’ve been laughed out of, but this isn’t one today,” Anthony said.

During committee testimony, supporters spoke of people being passed over for jobs or promotions based on their hairstyle as well as instances of students being sent home or disciplined in school for the same reason (See Gongwer Michigan Report, May 4, 2023).

Anthony and other members shared those stories in floor speeches prior to the vote.

Sen. Sylvia Santana (D-Detroit) said: “the legacy of slavery has left an indelible mark on many aspects of African American life,” including in hair style. She said people have long changed their hair style to conform.

Santana said those who embrace their natural looks, including hair have experienced economic and professional consequences.

“We must recognize that embracing natural hair is not a political statement or a trend but an essential part to affirm the humanity and dignity of all individuals,” Santana said.

Sen. Erika Geiss (D-Taylor) asked members to picture being sent home from school or not being able to participate in school sports due to their hairstyle.

“Imagine the psychological toll this takes daily everywhere. It’s cumulative, lasting, perverse, traumatic, and wrong. The cost is significant,” Geiss said.

Anthony cited stories she has heard of people being barred from having school pictures taken, from participating in school sports, or being denied walking at graduation due to their hairstyle.

“Black women and girls … have been embarrassed, mistreated, denied opportunities and unfairly disciplined because of the way God has created us,” Anthony said.

Anthony told reporters having younger generations of Black girls visit the Capitol and see leaders who look like them and being able to lead is a powerful example for them to potentially follow.

Geiss told reporters discrimination happens in various forms, pointing to how when she was first elected, she used to straighten her hair because, at the time, she believed it was necessary.

“It does take a toll on mental health, on being able to navigate spaces, and wanting to show up as yourself authentically and knowing you somehow have to pivot and alter yourself to be taken seriously,” Geiss said.

Not everyone supported the bill.

Sen. Jim Runestad (R-White Lake) cited what he called unintended consequences in his no-vote explanation, saying the definition of race as presented in the bill is too broad.

“What we’re talking about is about as open-ended a language as you could possibly imagine,” Runestad said. “If it were more narrowly tailored, I could support it. It is not, so I would oppose it.”

Also voting against the bill were four other Republicans: Sen. Thomas Albert of Lowell, Sen. Jon Bumstead of North Muskegon, Sen. Michele Hoitenga of Manton, and Sen. Jonathan Lindsey of Coldwater.

Anthony was also asked following session about Black women lawmakers being targeted in recent years by threats from the public. She mentioned an ongoing case from someone making a threat against her in 2020 that she said is still going through the courts.

Anthony also spoke about more recent reports of threats she has passed along to law enforcement. She said several were forwarded by her office after the Senate Appropriations Committee

vote to approve state incentives for the proposed Gotion, Incorporated, electric vehicle battery manufacturing facility to locate in Mecosta County. She said the reports were in reference to being “threatened to be raped, lynched, shot.”

“We signed up for a job to try to govern and do that job and obviously in the back of our minds, we always have to be concerned with our journey just being a little bit different,” Anthony said.

In a statement Tuesday, Michigan Democratic Party Chair Lavora Barnes and Vice Chair Geiss praised the bill’s passage while also taking aim at Republicans who voted against the bill.

“For too long, Republican leadership in our state has allowed people of color to be denied employment, educational, and extracurricular opportunities because of how we wear our hair,” the two said. “To the five Republican senators who voted against the CROWN Act, your votes are doing nothing but maintaining racist ideals. But let’s be clear, you have no power to diminish the beauty and acceptance if Michiganders of color.”