Nov. 17, 2023 | This Week in Government: A Request For Increasing Licensing EfficienciesNovember 17, 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.
Governor Asks LARA to Increase Licensing Efficiencies
Gov. Gretchen Whitmer on Wednesday sent a letter to the acting Department of Licensing and Regulatory Affairs director, urging the department to look at ways to amend or eliminate regulations to improve efficiency in state government.
The governor pointed to the Public Health Code, in particular, in areas for physical and respiratory therapists, sanitarians, and nurses to ensure maintaining licensure without undue delays.
In her letter to Acting LARA Director Marlon Brown, Whitmer said a balance could be struck between improving efficiency and maintaining public health and safety.
“It is my hope that LARA can work with interested stakeholders to examine the public health code and find ways to cut red tape and remove unnecessary bureaucratic barriers, which will save workers time and money without diminishing the safety and quality of the world-class services provided to Michiganders,” Whitmer wrote.
Brown, in a statement, said the department is committed to reducing barriers where possible as part of its strategic plan.
“We have made great strides in meeting these strategic goals and are looking forward to continuing to work with Gov. Whitmer, the legislature, and our stakeholders to reduce barriers resulting in the promotion of Michigan businesses, while also protecting people,” Brown said.
Economists: Slow-Down Expected, But US Likely Avoids a Recession
ANN ARBOR – The U.S. economy is expected to avoid a recession during the next two years, economic experts at the Research Seminar in Quantitative Economics at the University of Michigan said Thursday.
Economists gave presentations on the national economic outlook for the next few years at the seminar, a two-day conference held at the University of Michigan in Ann Arbor.
“Spending was quite strong in the third quarter, and so it’s been surprising how resilient that has been and how resilient the overall economy has been faced with these tightening credit conditions and financial conditions,” said Daniel Cooper, vice president of the Federal Reserve Bank of Boston, who presented at the conference.
The annualized pace of economic growth unexpectedly jumped during the third quarter of 2023 to 4.9%, the strongest reading since the fourth quarter of 2021 and more than double the pace during the first half of the year.
Real disposable income fell, so consumers cut back on savings to fund increased spending. The expectation is that with student loan payments resuming, rising interest rates, and real disposable income growing at a modest pace, people will begin to exhibit more restraint in spending, at least temporarily, said Daniil Manaenkov, the U.S. forecast lead for the Research Seminar in Quantitative Economics.
“I still want to say that uncertainty is pretty high,” he said. “Our main outlook is for modest, slowing growth in 2024, but mild recession is still possible.”
Economists expect that the GDP growth pace will slow sharply in the final quarter of 2023 and to stay below the longer-run trend for most of 2024. By late 2024, inflation is expected to be on its way down to the 2% target rate set by the Federal Reserve. The unemployment rate is also expected to inch up, and the central banking system will likely cut its policy rate, economists said.
Economists expect real growth to surpass 2% in early 2025. Real GDP is expected to grow by 2.7% in 2023 but is expected to slow to 1.2% during 2024. It’s then expected to rebound to 2.2% during 2025.
The cost of homes is expected to remain high, Manaenkov said, because sellers are getting locked in by their low mortgage rate, which is shrinking the inventory of homes for sale and increasing the upward pressure on prices. New residential construction may bring prices down, but the pace of single-family housing construction will continue to climb toward 7.5%, Manaenkov said.
Credit rating at banks hasn’t deteriorated as much as people feared it would back in March, Cooper said.
“This has been a very unusual cycle in terms of the household balance sheets and the sheer amount of fiscal supporting households that came out of the pandemic downturn in much better positions than are out of a normal downturn,” he said. “That’s really likely contributable to some of the resilience we’ve seen in household consumption to date.”
Many people still have disposable income and liquid assets, Cooper said, but savings have been more depleted among lower-income households.
Retail spending has been trending down, but it’s still relatively strong, Cooper said.
“There are signs that things are slowing down, but it’s still relatively robust in terms of people’s spending rates,” he said. “We’ll have to see how this continues going forward.”
Credit card debt also is something to watch, Cooper said, and that could be influenced by the restarting of student loan payments.
“Some consumers are certainly starting to feel the strains,” he said. “The people who are experiencing the most strain are those with auto loans and student debts as well.”
Core consumer price index inflation, which doesn’t include food and energy costs, is expected to register 4% year-over-year in the fourth quarter of 2023 before slowing to 3% in the second quarter of 2024. By the fourth quarter of 2025, economists expect core CPI inflation to hit 2.5%.
Headline CPI, which includes food and energy costs, is expected to outpace core inflation for a few quarters in 2024 as gasoline prices are expected to stay above the year before.
“Consumers are still really uncertain about what’s coming up ahead,” said Joanne Hsu, director for the University of Michigan Surveys of Consumers. “Consumers are still really concerned about inflation going forward. Likewise, consumers remain frustrated by prices, not just inflation, but prices and that those prices remain much higher than pre-pandemic.”
Hsu said concerns about prices were higher among consumers than they were during the Great Recession and during the late ’70s and early ’80s when inflation was worse.
That doesn’t mean consumers are out of touch with what’s going on economically, though.
“Consumers have absolutely noticed that inflation has slowed down from its peak from 2022,” Hsu said. “At the same time, they also noticed that the slowdown has stalled. … So, I would say that consumers are in touch with reality. They understand what is going on … they’re not just thinking about how much cash they have on hand right now, they’re also thinking about what is going to be worthwhile.”
Consumers are also aware of where the labor market stands, Hsu said. Although it’s been strong, consumers are increasingly worried about what will happen if labor markets begin to soften, which will remove the support for consumer spending, she said.
Political polarization plays into how people feel about the economy, Hsu said.
People who identify with the party who controls the White House always have a more favorable view of the economy than the party that is out of the White House, but the gap in sentiment has grown in recent years.
“For a lot of consumers, everything is political,” Hsu said. “More important, I think, than just the partisan gap is the fact that consumers are feeling uneasy about the uncertainty that comes with an election year.”
Election Realities Likely Mean 54-54 House For Over Five Months
A review of the multitude of new election laws enacted in the past five years is signaling that House Democrats will go much longer without the majority they won in 2022 than first thought, that the House could be split 54-54, perhaps until mid-May.
And with 2024 being an election year, unless the House operates its session days much differently than it historically has done, House Democrats might have just six weeks in late May and June to achieve anything of significance prior to the November election.
Newly sworn-in Westland Mayor Kevin Coleman formally resigned his House seat Monday evening, dropping the Democratic majority to 55-54. The resignation of Rep. Lori Stone (D-Warren) to become mayor of her hometown could come at any time, bringing the House to 54-54. It had not yet been submitted as of 8 p.m. Tuesday.
The most recent modern parallel was when then-Rep. Sheldon Neeley won the Flint mayor’s post in the November 2019 mayoral election and resigned the Monday after the election, the same as Coleman. Gov. Gretchen Whitmer called a special election the next day, setting a special primary for January 7 and a special general election for March 10.
Unlike that scenario, however, the new requirement in Proposal 2022-2 says absentee ballots cast by military or overseas voters must be counted if postmarked on or before election day and received by their clerk within six days of election day. That adds 12 days to the process. There’s also the time needed for clerks to maintain all voting equipment until deadlines have passed that allow them to reset it for the next election.
And the complication of the new legal environment is likely part of why Whitmer has yet to call the special election.
There is a provision in the Michigan Election Law that allows the secretary of state to authorize the immediate release of all ballots, ballot boxes, voting machines, and equipment in a city conducting a city election in the first week of April following the certification of the presidential primary results. Whether that would apply to a state legislative special election is unclear.
One source following the situation said the current discussions involve using the February 27 presidential primary as the special primary election for the 13th and 25th House Districts. Then there is debate about whether to hold the special general election in late April or with the regular May election date of May 7.
In both scenarios, the state would cover the cost of the primary because there already is a statewide election February 27. But then the local governments in the two House districts would have to pay for the cost of the special general elections in late April or on May 7.
Regardless, the House operating at 54-54 until late April or mid-May will complicate the budget process. The full House began voting on its budget bills in mid-May of this year. Additionally, it could mean a massive logjam of bills on the House calendar as committees – which under House rules will maintain their Democratic majorities – report bills to the floor during the first four months of the year.
While the House has yet to put out a schedule for 2024, traditionally, the House would recess for the summer starting in late June. That could mean the House Democratic majority, once it is back to 56-54 members, might have as little as six weeks to pass a budget and handle policy bills.
The House typically only has a smattering of session days – with no heavy lifting on policy done – in September and October before their members stand for reelection.
Amber McCann, spokesperson for House Speaker Joe Tate (D-Detroit), said Tate’s process would remain the same despite the situation.
“He’ll be working to advance legislation with plenty of opportunities for bipartisanship,” she said.
House Minority Leader Matt Hall (R-Richland Township) continues to call for changing the House rules to reflect the 54-54 tie. Under the rules adopted at the start of the term, as was the case under Republican control, only a 55-55 tie would prompt the election of a new speaker.
Tate announced changes to committee assignments Tuesday to reflect the Coleman and Stone departures.
For now, he’s largely allowing the committees where they served to operate with one fewer Democratic member.
Rep. Kristian Grant (D-Grand Rapids), a member of the House Economic Development and Small Business Housing Subcommittee, replaces Coleman as chair. Neither Coleman nor Stone was replaced as a committee member. The subcommittee goes from 7-4 Democrat-Republican to 5-4. It’s a similar situation on the House Insurance and Financial Services Committee, where neither Coleman nor Stone were replaced, dropping it from 10-7 Democrat-Republican to 8-7.
Coleman’s departure also drops membership on the House Energy, Communications, and Technology Committee (10-7 Democrat to 9-7 Democrat) and House Transportation, Mobility and Infrastructure Committee (8-5 Democrat to 7-5 Democrat) by one Democrat. Stone’s departure will drop membership on the House Agriculture Committee and the House Education Committee (both go from 8-5 Democrat to 7-5 Democrat).
Tate did, however, replace Coleman and Stone on the House Military, Veterans, and Homeland Security Committee with Rep. Jason Morgan (D-Ann Arbor) and Rep. Kara Hope (D-Holt) to preserve its 6-4 Democrat-Republican ratio.
Panel Talks Need to Chart New Long-Term Course For State
During a virtual roundtable Tuesday, panelists expressed optimism that Michigan can address the problems facing the state that have led to a lack of population growth and a general decline in its economy and other metrics compared to other states.
Leaders said despite sobering data collected in recent months showing a decline in the state’s economy, education, and infrastructure, solutions can be charted for a better path in the decades ahead.
After the governor announced earlier this year the Growing Michigan Together Council, a group tasked with developing ideas for growing Michigan’s economy and to reverse decades of little or no population growth, the state set to gathering data.
The numbers were not good in most key areas, officials said.
“All indicators are that other states like Wisconsin and Ohio are surpassing Michigan on a number of measures,” Dave Egner, president of the Ralph C. Wilson Jr. Foundation, said. “Our ability to stay competitive in comparison to other states is in serious jeopardy.”
Egner said Michigan is in the bottom third nationally in education, and infrastructure is “dangerously decaying.”
Corwin Rhyan, research director with the Altarum Institute, outlined data showing Michigan ranking low nationally and in the Midwest in the overall health of residents, pointing to further disparities by race and ethnicity.
“This contributes negatively to Michiganders’ ability to participate in the workforce and in education,” Rhyan said. “This unfortunately demonstrates that there are very significant … negative health outcomes that are occurring within the state and a need to invest in the health of our population.”
Citizens Research Council President Eric Lupher outlined data showing Michigan ranking 34th nationally in real per-capita income and median household income, saying, “our prosperity has been trending down for many decades.”
“A lot of the decline … can be attributed to the high-wage manufacturing jobs that we have lost, sluggish wage growth in the sector,” Lupher said.
He added the poverty rate in Michigan for those living in principal cities was about 20.6%, higher than the national average of 16%. For Black families, the poverty rate was about 26.2%.
Educational attainment also is a contributing factor. Lupher pointed to the state’s reading and math scores for those in the fourth and eighth grades as well below national averages. Michigan also ranks 34th nationally for people over the age of 25 with at least an associates’ degree.
“Michigan lags behind the nation in college degree attainment,” Lupher said. “There is a very high correlation between the education of the population and the income of the population. If we want to succeed economically, we have to do better at educating students and students of all colors.”
Infrastructure is another major shortcoming, Lupher said. Despite a stagnant population, suburban sprawl has flourished in the state for decades.
“Michigan’s residents are now responsible for more infrastructure per person than in previous years, so we obviously have a funding problem for infrastructure,” Lupher said. “In the context of a very low population growth, it is very much a zero-sum game. … We have an estimated infrastructure bill exceeding $5 billion dollars per year to try to get our infrastructure back to a condition that we would all say is standard and acceptable.”
Despite these figures, roundtable panelists offered suggestions for areas of improvement.
Alaina Jackson with Global Detroit said immigration has led to the state’s net population growth in the past 30 years.
She said the state’s immigration strategy needs to be improved with that in mind. Jackson added it does not have to be a zero-sum game either.
Angela Reyes, executive director of the Detroit Hispanic Development Corporation, said Michigan is one of the most racially segregated states in the country, which makes policy discussions more difficult. Without improving the quality of life, people will want to leave, she said.
Dan Gilmartin, CEO and executive director of the Michigan Municipal League, said when it comes to having attractive places to live, such as downtowns, “we’ve been disinvesting in those places” since the 1990s, and it needs to be reversed.
Gilmartin said Michigan needs to stop looking to the past for answers.
“We need to understand our assets and point ourselves in a different direction rather than going back to try and recreate a Top 10 list from 1960,” Gilmartin said.
Imani Foster, with 482Forward, said educational disparities and quality of life are key issues.
Foster said her generation in Detroit feels trapped, explaining there is a cycle of poverty due to a lack of education.
“It’s about what you have to offer their future. What you have to offer their children,” Foster said.
Each of the panelists had a positive answer when asked, on a scale of one to 10, how optimistic they were about the future of the state.
“Despite our problems, we have amazing assets,” Gilmartin said, saying he would be an eight or nine on a one- to 10 scale. “We had a 100-year run with the auto industry, which is a lot longer than the run in Silicon Valley is going to be. We know how to figure it out.”
Jackson, who explained that she left Michigan for 20 years before coming back in 2017, gave the state a seven.
“I think there’s some things that we have to just be honest with ourselves about and I think that if we’re ready to have honest conversations about how we treat people, how we treat Black and brown people, how we treat people whose last name doesn’t sound like ours,” Jackson said.
Reyes said she was an eight, saying in her line of work, one needs to be optimistic.
“Some of this stuff is inevitable,” Reyes said. “The population is shifting, is changing, climate is changing … and the fact that we have a such a beautiful state surrounded by water … I think it’s only a matter of time before other people around the country figure out that this is a really beautiful place to be.”
Foster said she was a 7.5 or eight.
“I’m optimistic about the young people that I’m around every day that are excited about the future,” Foster said. “When I was younger it was more so, like we’re all just trying to get out of there, and now it seems that people are really realizing the gem that Michigan is, all that it has to offer.”
Kildee Decision Sets Up Nationally Vital Race
Democrats and Republicans will seek to draw from deep benches in the Flint and Tri-Cities areas for what is expected to become a wide-open 8th U.S. House District race in the wake of U.S. Rep. Dan Kildee‘s announcement he will not be running for another term.
In what is one of the most competitive congressional districts not just in Michigan but in the country, competitive primary races are set to begin forming in the coming days and weeks in a seat that could be significant in the control for a narrowly divided U.S. House.
On Thursday, some Republicans whose names started to be thrown around commented on whether they might weigh running for the seat, while some Democrats remained mum on the topic and opted to praise Kildee (D-Flint Township) for his service.
For the first time in decades, Democrats will not be able to rely on the Kildee name, which has provided a boost in the Flint-area district in previous elections. The late former U.S. Rep. Dale Kildee of Flint was first elected in 1976 and held office until choosing not to run in 2012. Dan Kildee, who is the former representative’s nephew, won election to the seat in 2012.
Dan Kildee last year, after being redistricted into a much more competitive district, took 53.1% of the vote in 2022, defeating attorney Paul Junge, who earned 42.8%. It was Kildee’s closest win of his congressional career.
President Joe Biden carried the district by three percentage points over then-President Donald Trump in 2020, but the trends in the district favor the Republicans. Outside of the Democratic core communities of Flint, Saginaw, Bay City, Buena Vista Township, Flint Township, and Mount Morris Township, the rest of Bay, Genesee, and Saginaw counties is swinging quickly red. The Midland County portion is a little different, with the city of Midland becoming more Democratic but the rest of Midland County getting even more Republican.
There was discussion after the district was drawn in 2020 that only Kildee could hold it. That will now be put to the test.
There have been rumors that Junge could try for the seat again in 2024. Thursday, Junge told Gongwer News Service he is considering it.
A possible Junge entry into the race would quickly give Republicans a decent candidate as the primary race develops.
But Republican attention quickly went to the biggest GOP brand in the region: the Schuettes.
Rep. Bill Schuette (R-Midland) could be an option for the GOP. He shared a statement on X, formerly known as Twitter, thanking Kildee for his service.
When asked if he was thinking about running for the seat, Schuette said he was “committed to making sure Mid-Michigan is represented across the ticket by commonsense Republicans.”
A message left with Schuette’s father, former Attorney General Bill D. Schuette, about a possible campaign was not immediately returned. The elder Schuette served in the U.S. House from 1985-91.
For the Democrats, sources listed two top potential candidates: former Sen. Jim Ananich of Flint and Sen. Kristin McDonald Rivet of Bay City.
McDonald Rivet won the competitive 35th Senate District last November, which was critical in Democrats’ narrow capture of the state Senate for the first time since the early 1980s.
She did not provide any comment Thursday to Gongwer News Service when asked whether she would consider running for the seat. Her office separately, in a statement, thanked Kildee for his service and praised his work for constituents.
“In every second of his decades of public service, Dan Kildee has put the greatest good of the people he serves above all else,” McDonald Rivet said. “Congress is losing a working-class warrior and best-in-class public servant.”
A McDonald Rivet bid could put the Senate Democrats at risk of losing a functional majority. Should she win and then resign in early 2025, it would drop the Senate Democratic majority to 19-18. If a Republican won the ensuing special election, it would bring the Senate to a 19-19 tie. Democrats would retain control with Lt. Gov. Garlin Gilchrist breaking the tie, but their ability to pass anything without Republican support would be severely compromised. A Republican could withhold their vote on a bill to deny Gilchrist the opportunity to break a tie.
Ananich became the chief executive officer of the Greater Flint Health Coalition in January after leaving the Legislature.
“I’m giving it consideration and will decide (by) next week,” he said.
He also praised Dan Kildee for giving him his first chance to work in politics, working on Dale Kildee’s staff from 1998-2001.
“Dan gave me my start in politics in 1998 working for his uncle,” Ananich said. “He’s been a tremendous congressman and set the standard for how (to) be an advocate for your community, never forget where you came from and be effective at the job. He should have no regrets and I’m proud to call him a friend.”
In 2017 and 2018, when Dan Kildee was considered likely to run for governor, it was known that if he did so, Ananich intended to run for the congressional seat. But Kildee decided not to run for governor and sought reelection in 2018 instead.
A message left with Flint Mayor Sheldon Neeley was not immediately answered, but The Detroit News reported on X that Neeley was planning to launch an exploratory committee for a possible run.
Sen. John Cherry (D-Flint) said he was undecided Thursday on whether to consider a run given the suddenness of Kildee’s announcement.
“I haven’t given it any significant thought at this time. It’s something I’d have to think about,” Cherry said.
Cherry said Kildee has been a great representative while serving and that “you couldn’t ask for a better congressman.” He said whoever runs needs to be a strong fighter for working people and an advocate for Mid-Michigan.
The Cherry name is resonant in Genesee County. Cherry’s father, former Lt. Gov. John D. Cherry Jr., represented the county in the 1980s, 1990s, and early 2000s in the Legislature. Cherry’s mother, Pam Faris, served in the House in the 2000s.
Cherry’s seat is solidly Democratic, so should he run and win, Democrats’ Senate control would not be at risk.
Republicans also have several potential options other than Junge or Schuette, at least one of which might consider running.
Former Sen. Dave Robertson of Grand Blanc told Gongwer News Service, “I’m making the calls and doing my due diligence.” Robertson is currently the Grand Blanc Township clerk and has decades of roots in Genesee Republican politics.
“I’d be lying if I told you, given the news, that I haven’t considered running,” Robertson said. “If I do decide to get into this race, my track record of beating incumbents, both Republican and Democrat, speaks for itself.”
Robertson ousted a state House Democratic incumbent in 2002. In 2020, he ousted the Grand Blanc Township clerk in the Republican primary. He served in the Michigan House from 1991-92, then 2003-08, and then the Michigan Senate from 2011-18.
Former Sen. Ken Horn of Frankenmuth told Gongwer News Service he was “a hard no” on running, saying he had been asked earlier this year about the race.
“It’s not a position I want to seek. … It’s just really not appealing to me,” Horn said.
Horn called Kildee a friend, and while they did not always agree on policy, they did work very well together in the past.
“We’ve got a strong bench, so does the other side,” Horn added.
Another GOP lawmaker within the district who is not running is Rep. David Martin of Davison.
“You’ve got to be kidding me,” Martin said when asked if he was thinking about running.
“I’m not concentrated on the U.S. House. I’m very interested in restoring the Republican majority in the (state) House,” he said.
Saginaw County Clerk Vanessa Guerra, who formerly served in the House, did not immediately return a message seeking comment, nor did Rep. Amos O’Neal of Saginaw or Michigan Board of Education Chair Pamela Pugh of Saginaw, who currently is in the Democratic U.S. Senate primary.
Genesee County Sheriff Chris Swanson was also not available for comment. The Democrat earlier this year was reported to have not ruled out a bid for governor in 2026 after Gov. Gretchen Whitmer leaves office due to term limits.
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