Oct. 20, 2023 | This Week in Government: Senate Panel Discusses Requiring FAFSA for GraduationOctober 20, 2023
Each week, the Detroit Regional Chamber’s Government Relations team, in partnership with Gongwer, provides 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.
Senate Panel Discusses Requiring FAFSA for Graduation
Legislation that would require high school students to fill out a federal college student aid form to graduate high school drew mostly supportive testimony Tuesday before a Senate panel, with supporters saying it could help children learn about their higher education opportunities.
Supporters of SB 463 told the Senate Education Committee that requiring students to complete a Free Application for Federal Student Aid to graduate high school could help improve student access to federal loans and help grow the state’s skilled workforce.
Sen. Darrin Camilleri (D-Brownstown Township) called his bill a major opportunity for students, adding roughly a dozen other states have similar requirements in place. He said the bill also allows for multiple exceptions from filling out the form.
Camilleri said in the most recent year only about half of graduating high school seniors in Michigan applied for FAFSA. The senator added that the state is leaving about $100 million in federal student aid on the table as a result.
“Not only is this a huge waste when we know there are so many students who need it, it also means the students are not finding out about all the post-secondary opportunities available to them,” Camilleri said.
The senator shared the story of being the first in his family to attend and graduate from a four-year university. Without using the option of FAFSA, his top choice of college would not have been possible, he said.
“If I did not know that filling out this form was the ticket to get me there…my life would not be the same if I didn’t go to that school,” Camilleri said.
Camilleri said the Michigan bill would be one of the most comprehensive such proposals in the country if enacted.
“I don’t want any other student to fail to realize what their potential could be simply because a form got in the way,” Camilleri said.
Sen. John Damoose (R-Harbor Springs) said the forms are a great avenue for providing significant opportunities for children. He pointed out how his children are attending or have graduated from institutions he did not initially believe they would have been able to attend or for him to afford.
He asked about personal data safety concerns as well as questioned why schools might not simply have a student workshop or other form of educational option on the topic instead.
Not everyone supports the proposal. Last week the State Board of Education in a resolution voiced its opposition to the bill, expressing concerns including that it could create unintended barriers to graduation (See Gongwer Michigan Report, October 11, 2023).
During Tuesday’s hearing, Danelle Scott, assistant principal at Caledonia High School, spoke in opposition.
“Our families should have the right to decide whether they want to fill the form out, and even creating an opt-out form puts an unnecessary burden on both of them and our schools,” Scott said.
Scott said she recently filled out a form unsuccessfully as a parent.
The impact on counseling staff is also a burden, she said.
“My counselors want to see as many students fill the FAFSA out as possible and work hard to that effect each year, but there are limits to what we can accomplish,” Scott said.
Officials with the Michigan School Counselor Association also spoke against the bill, saying there is a major shortage of school counselors statewide and adding an increased FAFSA component to their responsibilities would increase their workload.
The hearing Tuesday was for testimony only. An S-1 substitute was adopted 7-0 that makes several changes to the bill. One change made would have the Department of Lifelong Education, Advancement and Potential create the informational packet on FAFSA.
A requirement for school districts to certify students have received informational packets on FAFSA would be removed. Students experiencing homelessness would also have to be informed of their ability to apply for FAFSA as an independent student.
Ryan Fewins-Bliss with the Michigan College Access Network told committee members “college is as important now as it’s ever been” while speaking in support of the bill.
“This really isn’t about sending kids to college, it’s about sending more students to college, more Michigan students to college,” Fewins-Bliss said. “If we don’t, we end up importing talent from other states and other countries while our Michigan residents and students are left behind.”
He said the FAFSA process is helpful in obtaining information on what a student’s options are. He compared it to buying a car, saying it is important to know about potential deals or discounts off the vehicle price.
“If you hadn’t got the entirety of the information available, you may have made a different decision,” Fewins-Bliss said. “FAFSA provides that information, but for post-secondary education, and, unlike buying a car, getting an education is transformative for a lifetime.”
Sarah Gammons, past president of the Michigan Association of College Admissions Counseling, said the bill could be a game-changer for students.
“Families are leaving money on the table,” Gammons said. “As my role as a school counselor, I have seen students rule out the possibility of post-secondary learning before the conversation even starts, this happens all the time. That for me as a counselor, it’s really frustrating.”
Changes Coming for Senate Economic Development Bills
A Senate committee panel Thursday discussed ongoing changes to bills that supporters say would improve the state’s economic outlook and provide businesses and Michigan residents with more opportunities.
The Senate Economic and Community Development Committee heard more testimony on the Good Jobs bills, SB 579, SB 580 and SB 581, and the Strategic Outreach and Attraction Reserve Fund bills, SB 559, SB 560, SB 561 and SB 562. The first set of bills would revive the Good Jobs for Michigan program and modify the program’s qualifications for an eligible business and certified new jobs, increase the wage requirements, decrease the required number of jobs and require those jobs to be permanent, full-time positions.
Committee members were provided with pages of substitutes, and Chair Sen. Mallory McMorrow (D-Royal Oak) said she would allow members and stakeholders to have time to read and review the bills. Sen. Mary Cavanagh (D-Redford Township), sponsor of SB 580, said the substitutes allowed for more inclusivity of novelty and smaller businesses.
Jennifer Hayes, senior vice present of operations and public policy for Invest Detroit, said one of the organization’s big goals is to revitalize the city and these bills would be a good step forward.
There was mixed testimony during the committee for SB 559, SB 560, SB 561 and SB 562. The bills would rename the SOAR Fund to the Make it in Michigan Fund and would require the Michigan Strategic Fund to operate the Michigan 360 program and modify the scope of the Michigan Strategic Site Readiness program.
Tim Bartik, senior economist with the Upjohn Institute, testified in support of the bills. He said states should be shifting their mix of what they do to include a greater emphasis on various customized business services, like infrastructure, customized job training and business advice programs.
Bartik said the Make It In Michigan Fund proposes 20 percent of the fund goes into these types of services which is a step in the right direction.
“An absolutely key thing to do is to make sure that you don’t just create jobs and don’t just create good jobs, but to make sure that Michigan residents…who are unemployed, underemployed can get those jobs,” Bartik said, saying targeting the stress counties versus targeting the booming counties ensures more unemployed people have access to those jobs.
The state can tie a job creation program to job training programs and other neighborhood programs so that people can get into the hiring queue, Bartik added.
Michigan Economic Development Corporation CEO Quentin Messer, Jr, said the bills would attract financial and human capital, saying several times throughout his testimony that Michigan needs to cultivate and revitalize places to attract people and projects.
Smaller businesses, Messer said, can take advantage of the community revitalization grants the state provides.
Sen. Jonathan Lindsey (R-Coldwater) asked about the “very long list” of criteria a company must meet to receive funding from MEDC. One of the criteria requires the consideration of the amount of local community and financial support for the project. What does it mean, Linsey asked.
Messer said many projects come from local and regional economic development partners. By coming through that door, they are pre-vetted for local support, Messer said.
There are also site selectors who advise companies where they should allocate their funds. Coming from either a site selector or a local economic development partner, Messer said that particular criteria about local support has been satisfied.
Mike Johnston, the executive vice president of government affairs for the Michigan Manufacturers Association, said they were concerned the proposals do not meet the standard for competitiveness. There has been a dramatic increase in the number of considerations under the Critical Industry Program and the Michigan Strategic Site Readiness Program, he said.
“We just think the list is getting long and probably not competitive in the marketplace compared to the offerings of other states,” Johnston said.
Sen. Dayna Polehanki (D-Livonia) asked if the list of considerations had gotten longer, how would that make the state less competitive if there are more opportunities to qualify.
Johnston said if there are 32 considerations under the Critical Industry Program and the applicant must meet the majority of them. McMorrow, one of the bill sponsors, said they are working to clarify that language and recognize the different sizes and types of projects within both programs.
Lindsey Case Palsrok, vice president of government affairs for the Business Leaders of Michigan, said her organization shares some of the same concerns as MMA. She said talent was the number one way to attract businesses and there needs to be a continued investment in K-12 outcomes.
The state is below the national average for labor force participation and getting people to fill new jobs is ultimately the goal.
“We just want to encourage you to keep the criteria for qualifying as simple as possible,” Palsrok said.
Research and Development Tax Credit Bill Needs More Time for R&D
Proposed legislation that would provide a tax break for businesses that want to do research and development in Michigan saw multiple recommendations from supporters during a House hearing on Tuesday and are expected to see changes before any movement might occur.
The House Economic Development and Small Business Committee heard testimony on a research and development tax credit bill package Tuesday. The bills included in the package are HB 5099, HB 5100, HB 5101 and 5102.
“There have been so many conversations this legislative term as to what economic development should look like in the state of Michigan,” said Rep. Jasper Martus (D-Flushing), one of the bill sponsors during testimony. “While we consistently rank as a good state to do business in … countless companies and organizations list the lack of an R&D tax credit as the largest deficiency in our economic vision as a state.”
There are 37 states that already have a research and development tax credit, Martus said. Michigan is also the only state in the Midwest without such a credit.
The COVID-19 pandemic and subsequent influx of once in a generation federal funding showed that it was critical for the state to invest in research and development, Martus said.
The bills would make $100 million available through the Michigan Strategic Fund on an annual basis.
“We know that as federal funds dry up, we have to prioritize programs that work and R&D’s track record in unimpeachable. I’m asking all of you not just to invest in another tax credit, but to invest in our state’s future,” Martus said. “This is an opportunity to legislate in this moment.”
To be eligible for the credit, businesses would have to increase research and development spending in Michigan through projects with the potential for significant advancements in technology, job creation and economic development. Businesses with more than 250 employees would have to increase research and development funding by at least $500,000, and businesses with fewer employees would have to increase it by at least $100,000. The credit would be done through the Michigan Strategic Fund
“These efforts acknowledge the reality that our competitor states already know, which is these credits encourage investment, innovation and lead to the growth of good paying jobs,” said Tyler Rossmaessler, executive director of the Flint and Genessee Economic Alliance, who testified in support of the bill.
Although Rossmaessler and many of the others who testified before the committee supported an research and development tax credit, they brought concerns and recommendations.
Common recommendations included tying the state tax credit to the federal tax credit, tying the credit to state tax returns, and having the credit monitored by the Department of Treasury. Supporters also asked for a clear requirement of accredited activities, an expansion to include all state universities as research universities and an increase in the amount of funding available for the program.
“Michigan has a heritage of innovation. We have more engineers per capita than any other state. We have the best universities in the world,” Rossmaessler said. “We took four wheels and an engine and put the world on wheels, and we can do it again. And I think it’s time that we stop allowing other states to take this mantle from us.”
Rep. Rachel Hood (D-Grand Rapids) said creating a research and development credit was a way to get more high paying jobs in Michigan.
“It’s critical to continue to build a concentration of high-tech engineering and design and we know that families need to be well into the upper five figures to be sustainable in Michigan. And so, we need to make sure that we are providing jobs that start at $80,000 and move into the six-figure category,” she said. “It’s through R&D that we’re able to attract those jobs and then subsequently that talent and retain it.”
Dr. Anthony Chang, founder and CEO of BAMF Health, also testified in support of the legislation. He said the tax credit would allow for the failure that innovation requires.
“Innovation takes time, and it constantly fails. How to create the environment that allows us to fail faster, allows us to fail more efficient, allows us to fail safer. This is critical for a company like us to survive,” Chang said.
Rep. Ranjeev Puri (D-Canton Township), another bill sponsor, said the state needs to invest in the businesses of tomorrow.
“As we look to the industry of tomorrow, whether it be automotive or any other industry, we want to be creating an ecosystem where Michigan is attractive to that next billion-dollar unicorn, so that we could say that company came here or started here and grew up here,” Puri said. “An R&D tax credit would help boost Michigan’s economy by creating jobs and keeping our state competitive.”
Jeff Stoutenburg of Dow Chemical also testified in support of the bill, but he raised concerns about how complicated the legislation was in its current form.
“To be effective, that credit has to be simple and has to provide certainty for businesses, otherwise we will not use it,” he said.
Rep. Greg VanWoerkom (R-Norton Shores) agreed that the package was complicated, calling it “convoluted.” He also agreed that the funding should be handled by the Department of Treasury rather than the Strategic Fund.
Rep. Julie Rogers (D-Kalamazoo), one of the bill sponsors, said that multiple bills were necessary so that the state could meet the needs of small and large businesses.
Hood added that the state’s approach was limited by the amount of funding available, and that’s why it made more sense to start with the Strategic Fund rather than Treasury.
“I think there is a moment in the future where we may have more revenue to invest in the transition to a Treasury based system and it would be appropriate in the context of $250 or $300 million in a fund or more,” she said. “We know that we are looking at constricting budgets in future years, and we won’t have the same kind of flow of federal revenue moving through the budget we’ve had this past year. So, we need to approach this conservatively.”
The bills don’t lay out what guidelines the Michigan Strategic Fund would use to distribute the funds, other than the size of the company, but Rogers said there would be clear guidelines established by the board.
Rep. Jason Hoskins (D-Southfield), who chairs the committee, said that the bills would be brought back next week for additional discussion.
“We are still taking input and making changes, so we are hoping to have any of those suggestions potentially put into amendments or subs soon,” he said. “We’re trying to get this to a good place.”
Panel: Much Work Needed to Keep Young People, Workforce in MI
Business group officials told a gathering last week the state has a lot of work to do to maintain young people in Michigan if it wants to attract a skilled workforce and see growth after decades of little to no population growth.
Officials highlighted recent polling showing more than 25 percent of young adults would likely leave the state within a decade during a luncheon event held last Wednesday by the Institute for Public Policy and Social Research at Michigan State University.
About 64 percent of those polled in the 18- to 29-year-old age group said they would be living in Michigan in 10 years, he said.
“The numbers get worse the more you drill it down,” Williams said.
That number drops to 52 percent among college students from out of state. A total of 79 percent of married people would stay, but that is a small part of that age group, he added. Those with college degrees were also more likely to leave than those with no more than a high school diploma.
“We have work to do. We have trends that we need to reverse,” Williams said.
Tim Sowton, vice president of public policy with Business Leaders for Michigan, said “forecast is not fate” and there is an opportunity to address such numbers.
In a presentation, Sowton and Williams said there were various motivating factors for moving to other states. Those factors include weather, cost of living, taxes and the state’s politics.
Social issues are increasingly important to the younger generation, too. Racial equity policies were important to 74 percent of respondents, firearms-related policies important to 60 percent, LGBTQ rights to 48 percent and a state being friendly to abortion rights was important to 47 percent.
Business Leaders for Michigan is deeply involved in working to attract and retain a strong workforce, Sowton said. He pointed to the group’s proposed plan for helping the state’s economy be successful released earlier this year (See Gongwer Michigan Report, May 10, 2023).
“We need to make sure that we continue to make the state attractive to both employers and employees. You can’t have one without the other,” he said.
Sowton said the organization has been stressing to lawmakers and leaders in Lansing that the state not too long ago went through the Great Recession.
“One of the things we need to be careful about as we continue to make policy in this state is that … we are presenting ourselves as somebody who can consistently put forward good policy,” Sowton said. “Sometimes what we see happening as what has often been the case in this state, is an election comes along and we pinball all over the place on policy.”
He said that from the outside, those looking at Michigan see inconsistency on policy and an inability to maintain them long-term compared to other states.
“We need to make sure that we’re keeping in place those things that work, and continue to work on those things that haven’t,” Sowton said.
Being a welcoming state with world-class educational opportunities and eliminating barriers to work such as affordable child care and housing are all important in improving the state’s economic opportunities.
Sowton said economic diversity and enacting policies to make the state more competitive are important.
Michigan Works! Association CEO Ryan Hundt agreed with Sowton on the need for consistency in state policy.
“Where we get into situations where we have different election outcomes, especially with different parties taking over, there’s not really that focused, sustainable policy, or set of polices, that are forward-thinking on making sure that we as a state are attracting and retaining our talent,” Hundt said.
Hundt agreed with the other speakers that much work is needed to turn the tide.
“Some of the headwinds that we are seeing here in the state … are perceptions, especially among younger generations of talent,” Hundt said.
He said there have been ongoing headwinds about labor force participation rates despite low unemployment. Part of this stemmed from the coronavirus pandemic.
He highlighted the Going Pro program as an example of something that has shown results and has drawn strong demand.
Last fiscal year he said there was about $108 million in private sector requests for access to about $55 million in state funding.
“We’re hopeful that we see an increase funding for the Going Pro Talent Fund in future years so we can more adequately meet the demand that is out there from the private sector for that key program,” Hundt said.
Hundt spoke of hearing a presentation in Adrian four or five years ago in which someone presented survey results of high school students and their top professions of interest. The top two were professional athlete and actor or actress.
“We need to do a better job of encouraging and educating not only students but also teachers, guidance counselors, parents themselves, so they can be champions in their children’s’ future,” Hundt said. “We have a ton of career opportunities here in Michigan, and if we are not educating individuals and students until they are in 11th or 12th grade, we get survey results like the one I just referenced.”
Hundt said there needs to be a push to speak about career exploration at the junior high-level or even younger to better inform young people of what skills and jobs are important as they grow up and consider their career paths.
Hollier Sets Up Rematch Against Thanedar – Will it be Less Crowded?
Former Sen. Adam Hollier is taking another shot at Congress, announcing Tuesday he is running against U.S. Rep. Shri Thanedar for the 13th U.S. House District.
Hollier of Detroit was in a crowded Democratic primary in the 13th last year, where Thanedar ultimately prevailed. Thanedar put a significant amount of his own wealth behind his candidacy.
In announcing his congressional run, Hollier resigned from his position as Michigan Veterans Affairs Agency director.
Hollier announced he has the endorsement of former U.S. Rep. Brenda Lawrence and Wayne County Executive Warren Evans. Lawrence backed one of the other Democrats in the 2022 primary.
With Thanedar’s win in 2022, Detroit for the first time in 70 years doesn’t have any Black representation in Congress. It seemed likely Thanedar would again face competition from a Black Detroiter in 2024.
The question, however, remains if the primary can remain a one-on-one race between Thanedar and Hollier. If many again throw their hats in the ring, it could be harder to beat the first-term incumbent.
There was considerable criticism after the 2022 elections that so many continued to run in the primary. There were nine candidates for the Democratic nomination. Thanedar won with just 28.3 percent of the vote. Hollier was second with 23.5 percent.
In an interview Tuesday, Hollier said Thanedar has been ineffective in Congress, and his constituents know it.
“I think our community is coming together,” he said. “We understand how important it is to have a member that represents this district.”
Thanedar has recently come under criticism from U.S. Rep. Rashida Tlaib (D-Detroit), who told The Detroit News that constituents call her office for help when they don’t receive it from Thanedar’s. A former staffer also recently blasted him online as well.
For his part, Thanedar has said not to believe everything you read on social media and has emphasized money he has brought to the district and other actions.
Still, Hollier, who said he was on a UAW picket line on Tuesday, said the district needs someone who understands what it’s like to work and still not make enough.
Hollier also said representation matters in the district, whether it’s in relation to law enforcement, Detroit institutions or small business development.
“We are finally getting to this place where we don’t have to explain why,” Hollier said. “People need to know that you know what is going on.”