Oct. 6, 2023 | This Week in Government: New Coalition Has Family Leave Concern

A coalition of business groups announced its intention Wednesday to work against paid family leave and other proposals it says threaten Michigan’s economy, while House Speaker Joe Tate declined to commit to the policy, which was a key item floated by Gov. Gretchen Whitmer in August.

This week, Tate (D-Detroit) outlined the House’s priorities for the fall, saying the chamber would focus on codifying portions of the federal Patient Protection and Affordable Care Act and passing the Reproductive Health Act, energy proposals, and the land value tax plan supported by Detroit Mayor Mike Duggan.

Asked about paid family leave, Tate said discussions are “ongoing.”

“Conversations are still being had,” Tate said. “I think that’s where we’re at right now. There’s a lot of other items and priorities, but that’s something we are continuing to have conversations on.”

The paid family leave proposal Whitmer called for in an August speech to lawmakers is a key concern of the new Great Lakes Growth Coalition. The group includes the Michigan Chamber of Commerce, the Detroit Regional Chamber, the Michigan Manufacturers Association, and the Grand Rapids Chamber, among others.

“The business groups that are here today with you have been trying to work with the new majorities in Lansing. We’ve been working in the middle and trying to find positive policy outcomes for our members, but also for our state and for its citizens,” Wendy Block with the Michigan Chamber said during a Wednesday press conference. “And you’ll notice that we use the word ‘growth’ in our coalition name and that’s because we do share the governor’s vision for growing Michigan’s population and making Michigan a place that everyone wants to call home. But we are increasingly concerned that the policies being pushed in Lansing are putting Michigan’s path to economic and population growth at risk.”

Block said the coalition is urging the Legislature not to rush and to listen to both sides of an issue to truly understand the potential impacts of policy changes.

Other than paid family leave, the group is concerned about Democrats considering energy proposals that would increase mandates on renewable energy production, bills setting penalties for misclassifying “independent contractors,” and legislation repealing a ban on local governments setting individual minimum wage levels.

Brad Williams with the Detroit Regional Chamber said the Legislature should remain focused on things that make the state more competitive, citing wins in economic development and the expansion of the Elliott-Larsen Civil Rights Act as items Democrats have championed this term.

“We’d encourage them to continue to do those types of things. There’s plenty of things that are available on their agenda that will grow Michigan’s population, as opposed to some of the things that we’re talking about today,” Williams said.

Andy Johnston with the Grand Rapids Chamber said he recently spoke to a small business owner who was visibly upset about the paid family leave proposal and what it would mean for their business.

“Everyone across the nation is talking about population growth because of the demographics,” he said. “So, this is fierce competition. We can’t afford a whipsaw state economy or policies.”

Mike Johnston with the Manufacturers Association said retaining the state’s existing businesses and attracting new investment is key.

“If we can’t do it effectively, we will continue to lose population and lose our economic vitality going forward,” he said.

Changes to a key economic development incentive program were introduced Wednesday, with the main bill sponsor saying the legislation would add transparency to the process and help communities make local improvements to align with projects.

Sen. Mallory McMorrow (D-Royal Oak) told reporters the bill package changes the Strategic Outreach and Attraction Reserve Fund into what the governor in recent months renamed the Make It In Michigan Fund.

A key change, McMorrow said, would be to add a third program under the fund called Michigan 360, which would require 20% of any offer made to a company as part of an economic development deal to be under this program. This 20% would come from the up to $500 million approved through the 2024-25 fiscal year under HB 4001.

Currently under SOAR there is the Strategic Site Readiness Fund and the Critical Industry Program. Michigan 360 would be a third program under the Make It In Michigan Fund umbrella.

The Michigan 360 program, she explained, would be directed not to the company or for site development but for local needs, including infrastructure, child care, or community college programs.

“This will allow us to leverage economic development opportunities to make smart strategic investments directly in communities that align with the community’s goals and align with the company’s goals,” McMorrow said.

She said the proposal was modeled after the incentives package approved in Virginia to attract a new headquarters from Amazon. McMorrow said last month a top priority for her this fall was to work on making changes to the economic development incentive program (See Gongwer Michigan Report, Sept. 1, 2023).

The Senate bills are SB 559, SB 560, SB 561, and SB 562. A House package will also be introduced. Another provision to address transparency concerns raised by some lawmakers would be to add four members of the Legislature to the Michigan Strategic Fund Board: the majority chair and minority vice-chair of a committee in each chamber selected by the Senate majority leader and House speaker.

“It’s no secret that a lot of our colleagues have had frustrations with a lot of these votes on both sides of the aisle,” McMorrow said. “We promised that we would put reform forward and that’s what we intend to do.”

Having lawmakers on the board would enable them to be involved in conversations from the beginning of the process, she said, and would hopefully enable those members to see proposals before they are offered to the board and the appropriations panels in both chambers for final approval. There has been frustration, she said, about members learning about incentive packages shortly before they come before appropriations.

When asked if the lawmakers appointed to the Michigan Strategic Fund Board would have to sign nondisclosure agreements, McMorrow said that would be a topic of discussion.

“You want to have as much information as possible to be able to understand if this is aligned with the vision of the legislation,” McMorrow said.

McMorrow was asked if the proposed changes could help in reducing or eliminating pushback to projects seen in the Blue Oval Battery Park project in the Marshall area and the proposed Gotion, Inc. project in Big Rapids Charter Township for an electric vehicle battery campus.

The senator said under the changes, one could imagine the Michigan Economic Development Corporation bringing in a community as a partner on a project immediately.

“Working together, you might work with the local community to assess is there something in their master plan that maybe this could accelerate, so the community is a partner and a stakeholder from day one to have a voice in this process so that it’s a win for everybody, not just the company, but for the community themselves so that everybody can thrive,” McMorrow said.

She explained that discussions on making changes to the fund have been underway since the beginning of the legislative session with the governor’s office and the MEDC.

McMorrow acknowledged there is a finite window for securing major projects in Michigan as federal funding for infrastructure and the chip sector is allocated, adding there are also opportunities for small to medium-sized projects across the state.

“Our hope is that this diversifies the portfolio of what gets into the SOAR pipeline,” McMorrow said.

Detroit Mayor Mike Duggan’s proposed land tax act hit another snag after the House abruptly adjourned session Thursday following hours with Democrats in caucus trying to secure votes to push the bills.

The bills were in the tentative session, but after long caucuses, the House adjourned, leaving several items, including the land tax act, to be dealt with in the next session. Amber McCann, spokesperson for House Speaker Joe Tate (D-Detroit), told reporters that a House member was rushed to the hospital for a medical emergency. McCann did not disclose the name of the individual. The situation was said not to be life-threatening.

McCann also said several caucus members brought forward suggested changes to include their municipalities in the legislation, which currently applies only to the City of Detroit. A Democratic official told Gongwer News Service that a small number of representatives – less than 10 – wanted their municipalities to be included in the package. Though the bills are aimed at Detroit, where blight is all too frequent, it is not exclusive to Detroit, the official said.

The package – HB 4966, HB 4967, HB 4968, HB 4969, and HB 4970 – would create the Land Equity Tax Act. This legislation would substantially increase property taxes on land and cut property taxes on the buildings sitting on land. Detroiters have some of the highest property taxes in the nation. Duggan has said the new plan if implemented, would provide some relief to residents and shift the tax burden to land speculators hoarding vacant lots and enjoying lower property taxes under the current system. Late September, the package squeaked by to the full House after one of the Democratic members abstained from voting on HB 4966 during the House Tax Policy Committee (See Gongwer Michigan Report, Sept. 27, 2023). Rep. Alabas Farhat (D-Dearborn), the sponsor of HB 4968, told Gongwer after session that Tate was reviewing amendments other Democrats brought forward that could possibly include other municipalities.

OTHER ACTION: Prior to the abrupt adjournment, the House passed SB 179 

and SB 180 with bipartisan support, 91-15 and 90-15, respectively. The bills would amend the Michigan Regulation and Taxation of Marihuana Act and would allow the Cannabis Regulatory Agency to enter into an agreement with an Indian tribe regarding regulatory matters. It also allocates a portion of the unexpended balance of the Marihuana Regulation Fund to an Indian tribe to a retailer or microbusiness located on tribe lands. A “filter first” bill, SB 88, sponsored by Sen. Sylvia Santana (D-Detroit), was moved out of committee by the House but was not put up for a vote. The bill would require the installation of drinking water outlets and tap filters in daycares. Rep. Ranjeev Puri (D-Canton) sponsors HB 4341, which would have the same requirements for public schools. The bills are tie-barred.

“I don’t think any of today’s proceedings were reflective of where we stood on Filter First,” Puri told the media. “I think everyone in my caucus is very committed to doing whatever we can to make water safer.”

Puri said he expected the vote next week to go smoothly, saying this issue transcends party lines. He also said he was confident the bills would reach the governor’s desk.

Senators were told Wednesday during the first hearing on legislative changes to the 2019 auto insurance law that the proposed bills would restore access to care for the catastrophically injured that have been impaired by the changes.

The bills discussed would raise the cap on family-provided attendant care and increase reimbursement rates.

The Senate Finance, Insurance, and Consumer Protection Committee heard all supportive testimony Wednesday on SB 530 and SB 531, with further testimony from supporters and opponents expected to come at the next hearing. Sen. Sarah Anthony (D-Lansing), the sponsor of SB 531, told the committee the scope of the issues facing providers and the catastrophically injured is significant.

“We know there’s more work to be done, because all Michiganders deserve real relief,” Anthony said. “But it’s not a zero-sum game. So we can do both … these few bills are a step in the right direction.”

As introduced, the bills would make changes to the reimbursement structure within the Medicare fee structure, establish a new non-Medicare fee schedule, make changes to the rate structure in what bill sponsors said would increase access to specialized care and add a requirement for accreditation for agency providers (See Gongwer Michigan Report, Sept. 26, 2023).

One provision that has already drawn significant focus is one that would bring reimbursement rates for all hospitals, not just those with a large indigent patient population, to 250% of the Medicare rate. The provision has been pointed to by business executive Dan Gilbert, a key proponent of the 2019 law, as a bad idea that would raise rates (See Gongwer Michigan Report, Oct. 3, 2023).

Under the existing no-fault law, hospitals receive 200% of the Medicare reimbursement rate, while those with indigent populations of 30% or more receive 250% of the Medicare reimbursement rate.

As introduced, the bills before the committee Wednesday would increase the Medicare reimbursement rate to 250% for all hospitals and change the existing four-tier system for Medicare reimbursement to a single tier.

Providers, including Tammy Hannah, president and Chief Executive Officer of Origami Rehabilitation, spoke in favor of the bills. She said the 2019 law hampered their ability to provide essential care and the same for other providers.

“The questions of this reform have been profoundly felt by organizations like ours, hindering our ability to provide essential care to those in desperate need,” Hannah said. “The financial shortfall has unfortunately forced us to turn away a staggering number of survivors with intense needs following an auto accident.”

Hannah said prior to the July 2021 reimbursement cuts that went into effect under the 2019 law, the five-year average net margin was about 10%. She said in 2021, the first year with the new fee cap, the company saw a negative 14% margin even with operational changes to cut costs. This grew to a negative 30% margin in 2022 and is on track to be a similar figure in 2023.

“These figures are not just numbers. They represent lives impacted, opportunities lost and communities in distress,” Hannah said.

Sen. Jeremy Moss (D-Southfield) asked Hannah about their operations versus those who have had to close shop.

Hannah said Origami has diversified into other areas of care. As to other businesses, she said the lack of sufficient reimbursement drains resources quickly.

Hannah was then asked what Origami’s percentage of patients who are auto crash survivors pre- and post-2019 law. Hannah said their clientele of auto crash survivors was about 80% prior to the law changes, and now that figure is about 54% and falling each year.

Tom Judd, executive director of the Michigan Brain Injury Provider Council, said his members “have been slandered by the public relations and lobbying arm of the auto insurance industry, broadly labeling them as greedy and unethical medical providers.”

He said the 2019 law’s 45% reduction in reimbursement put the rate below the actual cost of providing care. The bills before the committee, he said, would address these concerns and improve access to care.

Bill Buccalo, Chief Executive Officer of BlackRocks Group, said it “was a matter of survival” to figure out how to address the 55% issue.

Buccalo said the focus of the proposed changes was to undergo a diligent process to find numbers that can provide stability to the industry and ensure a quality level of care.

Wayne Miller, a lawyer who specializes in issues dealing with automobile crashes and an adjunct professor at Wayne State University, said the fee schedules under the no-fault law need to be crafted taking into account the business realities of the marketplace.

“The problem has been that the 45% rate cut has no basis in reality,” Miller said.

Maureen Howell of We Can’t Wait outlined her son’s catastrophic auto crash injury in the 2000s.

“With a catastrophic of someone you love and care for, it never ends, it remaps your life,” Howell said.

She said thousands of others in the state have had similar experiences.

“After finding a new normal, survivors and their families faced yet another tragedy: this one provided by our Legislature deciding high cost of insurance were due to providing care to these survivors,” Howell said.

hief Court of Appeals Judge Elizabeth Gleicher will resign from her post on the appellate bench and the Court of Claims in March of next year, setting up an opportunity for Gov. Gretchen Whitmer to appoint her replacement.

In an interview with Gongwer News Service, Gleicher confirmed that she would be resigning and that her motivation was to allow Whitmer to choose her successor. She also emphasized that she was not “retiring” but resigning and hoped to have another job lined up before March 2024. If she does find a job prior to that date, Gleicher said she would step down earlier.

“I’m too young to retire. I’ve been working since I was 14 and I can’t imagine not working,” she said. “My term is up at the end of next year, and I can’t run again because I was born in 1954, so that’s that. And I would very much like for Gov. Whitmer to appoint my replacement.”

Gleicher said she issued a letter to the governor’s office announcing the move and that her colleagues on the court have known for months. She said there was a mix of gratitude and sadness about her decision in the Hall of Justice.

“I would like to think that most of my colleagues respect the work that I’ve done for the last 17 and a half years, even if they’ve disagreed with it at times,” Gleicher said. “The best part of the job in the last few years has been the opportunity to help mentor the new judges and that I will miss.”

The judge was appointed in 2007 by then-Gov. Jennifer Granholm. She had previously worked as an attorney in private practice for 27 years, beginning her career at Goodman, Eden, Millender & Bedrosian in Detroit, her court biography states. She opened her own litigation practice in 1994. Gleicher has received various distinctions and awards during her time on the bench.

When asked what her crowning achievement was on the court, Gleicher said she hopes her lasting contribution to the court would be in her child welfare decisions.

“I’m very proud of that work,” she said. “I didn’t know anything about the child welfare area, zero, when I came on the court in 2007. It quickly became an area of special interest for me. So, I’ve written a lot about that.”

Gleicher also said she’s tried to lead by example as the chief judge and has worked to provide quality opinion writing and to elevate the writing on the court.

“Both of those things have been important to me, and as chief judge for the last two years, I’ve tried to expand the transparency of our courts operations, both internally and externally,” she added. “Internally meaning allowing judges to have a better idea of how their court functions on a day-to-day basis.”

When asked who she might like to see ascend to the chief judge position out of her colleagues, Gleicher said that was a decision for the Supreme Court.

“And for the Supreme Court alone,” Gleicher said. “I don’t want to step on their toes.”