Aug. 23, 2024 | This Week in Government: Treasury Would Set 2025 Minimum Wage at $12.48

In a court filing this week, Attorney General Dana Nessel said the Department of Treasury intends to increase the minimum wage from $10.33 to $12.48 in 2025 if it receives no instruction from the Supreme Court to act differently.

Nessel, seeking clarification from the high court on its recent adopt and amend ruling on behalf of the Treasury and the Department of Labor and Economic Opportunity, in a filing Wednesday, said there remain several questions about the court’s ruling.

The filing asked for a response by Sept. 15.

Most significantly, the filing sought clarification on how to adjust the minimum wage with the inflation metric, as instructed by the court. The filing said the court did not set a start date for when Treasury should begin calculating the inflation rate.

Another key question is the effective date of the minimum wage increases. The court said the effective date is Feb. 21, 2025. However, the filing notes state law implements minimum wage increases on Jan. 1 of each year.

The filing said if the court doesn’t order the agency differently, it will implement the new 2025 minimum wage in February and use the Jan. 1 date for subsequent years.

Finally, the filing said state law doesn’t use the term “tip credit” and said the agency would implement the “tip credit” as the baseline minimum wage referenced in law. It also noted the 2018 initiatives included a phase-in of the lower wage at 90% of the regular minimum wage, which the court didn’t include in its graduated phase-in.

As to how to calculate the inflation adjustment for the new minimum wage, the filing presented several options, but said Treasury believes the court intended for it to begin calculating inflation on Jan. 1, 2019, through July 31, when the adopt and amend ruling was issued.

This would mean the minimum wage would be $12.48 in 2025, $13.29 in 2026, $14.16 in 2027 and $14.97 in 2028.

Still, the filing said ambiguities in the opinion mean there could be other ways to calculate inflation. It outlined four other possibilities but said the Treasury intends to use option one unless the court orders differently.

“Given the unprecedented situation created by reviving the Wage Act six years later, the state, employers, and employees all need clear guidance from this court on the proper methodology for calculating the minimum wage,” the filing said.

Business industry stakeholders are asking lawmakers to consider changing the minimum wage law, which is expected to go into effect in February, to keep tipped wages in place while increasing the minimum wage to $15.

If Michigan gets rid of tipped wages, many restaurant workers will make less, even if the minimum wage increases, said Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association.

Winslow also said he wants the Legislature to act sooner rather than later. The Legislature has some scheduled session days in Sept. before returning after the November election.

The adopt and amend ruling, decided last month, held the Legislature cannot adopt and later amend voter-initiated laws in the same session. That led to the reinstatement of a law calling to increase Michigan’s minimum wage to $12 per hour by 2022 and bring the tipped minimum wage up to the regular minimum wage.

“We’ve been saying this so many times for so many years … everyone makes, at minimum, the full minimum (wage),” Winslow said. “In that rare occasion, tips aren’t going to make up the difference, the employer has to make up that difference … but the likelihood is that they’re really making closer to $30 an hour, and some a lot more than that.”

Tipped wage is not unique to Michigan, Winslow said. In fact, 43 other states use it.

“It’s not like we’re coming out of left field with something random and out of practice, but really something that keeps us in line with all of our surrounding states,” he said. “You’re accomplishing this in a way that is increasing wages for everyone, but you’re not doing so in a way that’s going to risk massive job loss in the restaurant industry.”

If changes aren’t made to preserve tipped wages, one in five restaurants in Michigan will shut down, Winslow said, citing polling done by the MRLA.

“That is more than 1,000 restaurants in the state of Michigan, and with that goes about 40-60,000 restaurant jobs,” he said.

Restaurants are already pausing their growth in Michigan because of the decision, Winslow said.

“They are terrified to make a move until they understand what the playing field is,” he said. “That means they’re not hiring anyone new. That means they’re not opening new restaurants.”

Winslow said that his organization has already had many good conversations with lawmakers, and restaurant workers and owners have been reaching out to their representatives.

“We’re hearing from people left of center, right of center, and in the center, all wanting to get to a solution that keeps the tip credit,” he said.

The upcoming, high-stakes election is slowing the gears a bit, though, Winslow said.

“With the outcome uncertain, I think that is delaying the ability for us to move forward with that legislative solution under the timetable that we would prefer, which would be in September,” he said. “But we’re getting a lot of positive assurances on both sides of the aisle that there’s a willingness and a desire to get this fixed before it’s too late.”

And sooner would be better than later, Winslow said.

“September would be ideal, November would be the plan B, and if all else fails, right into the belly of the beast in lame duck,” he said.

Democratic leadership in the House and Senate, along with Gov. Gretchen Whitmer‘s office, have not indicated if they believe the Legislature should take action. Whitmer has said she may seek further clarity on the ruling.

Republicans, on the other hand, are beating the drum for an answer. Leaders of the legislative Republicans, however, did not directly say if they support a $15 minimum wage.

“A solution is needed now to prevent job losses and business closures. The industry has called for immediate action,” Senate Minority Leader Aric Nesbitt (R-Porter Township) said in a statement to Gongwer News Service on Monday. “Senate and House Republicans have said the Legislature needs to come back to Lansing and fix this. We’re ready to work to solve this problem. Unfortunately, Gov. Whitmer and the Democrat majority remain silent.”

Jerry Ward, press secretary for House Minority Leader Matt Hall (R-Richland Township), provided similar comments.

“Hard-working Michigan servers and bartenders need a solution to save their jobs and their paychecks,” he said. ‘They need Democrats to come back to work and join Republicans to help us find the best solution for restaurant workers, operators, and customers. But so far, Democrat leaders have refused to do their job.”

Rep. Curt VanderWall (R-Ludington) has publicly thrown his support behind Minority Leader Matt Hall (R-Richland Township) to lead the Republican caucus next term.

VanderWall was rumored to be seeking a potential leadership challenge and has often thrown his name into the ring in November, but on Tuesday, VanderWall published a statement backing Hall.

“I am proud to support Matt Hall for Speaker. His leadership and vision are exactly what we need to bring a Republican majority back to the House,” he said. “I am committed to working alongside Leader Hall and our colleagues to ensure we achieve our goals and provide strong leadership for Michigan.”

Rep. Bryan Posthumus (R-Cannon Township), who was also rumored to be eyeing a leadership bid, is serving on the House Republican Campaign Committee, which would suggest Hall has his support.

One source speaking on background said that, for the most part, the Republican caucus has “come home to Hall.”

Meanwhile, other Republican caucus members continue to be committed to working toward regaining the majority but may be less committed to Hall.

Rep. Tom Kunse (R-Clare) still has a serious leadership bid, according to multiple sources.

Sources said that although Republican primaries may have changed the math a bit for Kunse and Hall –Rep. Neil Friske (R-Charlevoix) did not support Hall, but Rep. Bob Bezotte Jr. (R-Howell) did– there’s still a lot of time before November.

Michigan’s entrepreneurs have until Sept. 16 to apply for PitchMI, a new Shark Tank-inspired competition aimed at finding and funding the next innovative solution in transportation and mobility, Gov. Gretchen Whitmer announced Monday.

Whitmer announced PitchMI’s creation earlier this year at the Detroit Regional Chamber’s Mackinac Policy Conference, billing it as a creative way to attract talent and involve the entrepreneurial community in state actions. The first competition, to take place in October, will task applicants with pitching “innovative solutions that transform the way Michiganders get from Point A to Point B safely, affordably, and efficiently.”

The winning idea will receive a $100,000 investment from the newly founded Michigan Growth Office.

“Building a more prosperous future for Michigan means supporting and investing in innovators and entrepreneurs. Earlier this year, I announced three new actions to invest in culture, capital, and creativity to grow Michigan’s economy,” Whitmer said in a statement. “PitchMI will unleash Michigan’s innovative spirit, strengthen our entrepreneurial ecosystem, create good-paying jobs, and spur new ideas on the future of mobility. I can’t wait to see all the creative ideas and look forward to the competition in October.”

The competition is scheduled to take place on Oct. 24 during the Office of Future Mobility and Electrification’s debut MI Future Mobility Conference, to be held in Detroit. Whitmer’s office noted that applicants for PitchMI must be available to participate in person, and the competition is open to pre-seed, seed, Series A, and Series B companies, with 51% of their employees residing in Michigan.

PitchMI is one of several forthcoming projects derived from the recommendations of the Growing Michigan Together Council, which worked last year to provide a series of policy pointers aimed at boosting the state’s stagnant population. Among the council’s recommendations were improving transportation infrastructure and access, recruiting and retaining young professionals by lowering costs, and establishing Michigan as an innovation hub.

“In addition to capital, innovators, and entrepreneurs across the state need visibility to grow. This competition offers our entrepreneurs a stage to share their ideas with the world and demonstrate yet again that Michigan is at the cutting edge of innovation,” Chief Growth Officer Hilary Doe said in a statement. “Investing in entrepreneurs and innovators will help our state become a magnet for both businesses and talent, working together to drive population growth. Supporting entrepreneurs in starting and scaling their businesses will also create a more prosperous place to live for all Michiganders.”

Those wishing to apply can do so at the Let’s Grow Michigan website.

Court of Appeals Judge Mark Boonstra and Rep. Andrew Fink are running neck-and-neck in a tight race for the Republican nomination to replace the retiring Justice David Viviano, with both candidates garnering support from party delegates ahead of the weekend’s nominating convention.

Former 15th Circuit Court Judge Patrick O’Grady has also been working hard to lock up his race for nomination to a partial term currently held by incumbent Justice Kyra Harris Bolden, with sources tracking the race speaking on background saying O’Grady has pulled ahead of the pack among three candidates.

Gongwer News Service spoke to several sources on background about the GOP Supreme Court nomination campaigns, many of whom said that Boonstra versus Fink (R-Hillsdale) remains a coin flip and could come down to the wire at the convention, which is scheduled to begin Saturday morning in Flint.

Those same sources noted that O’Grady was running a more robust campaign than his challengers in attorney Matt DePerno and Alexandria Taylor. Some said DePerno wasn’t quite resonating with delegates the way he had in his 2022 run as the GOP nominee for attorney general, while Taylor was, but not enough to topple O’Grady.

Boonstra and Fink, in separate interviews with Gongwer, said they feel good about where they are at with days left to wrangle delegates.

For Boonstra, who has a judicial track record of three previous elected terms on the Court of Appeals representing the 3rd District, experience matters, and that’s what he’s been telling delegates.

“I think it really does, and I think those who held the position before, who know what it entails and what is needed there, will say the same thing. That’s why they’re supporting me because I have extensive judicial experience,” Boonstra said. “I’m now in my 13th year on the Court of Appeals. We decide the same cases have been going up to the Supreme Court, right? I can hit the ground running on day one.”

Boonstra said he also has a proven track record of judicial opinions he’s written over the last 13 years, so delegates know exactly what they’re getting in a potential Justice Boonstra.

“I think that I have been a consistent and reliable judicial conservative, which I believe is what is what we need, and I will continue to do that on Supreme Court,” he said.

When asked how his campaign was going in the final days, Fink said, “We feel very prosperous.”

Fink said he’s been working to make sure delegates know his background as a Hillsdale College graduate, a former University of Michigan chapter president of the Federalist Society, a judge advocate with the U.S. Marine Corps, and as a member of the House Judiciary Committee.

He, too, said he has a track record delegates and voters can depend on.

“Which is why a group like CPAC is giving me a 95% rating in their endorsement for this. And it’s not just that it’s a conservative track record, but because I really emphasized, and say even elevated constitutional issues as a member of the House,” Fink said. “My career has also allowed me to develop the skills relevant to being a Supreme Court justice.”

Fink has also been making the case that Boonstra, who is currently 67 years old, would likely only serve one term as a justice because the Constitution bars justices from seeking reelection after they reach 70 years old. Fink is 39 years old as of this summer, and his potential ascendency to the high court would allow him to run for reelection several times.

“Strategically, none of that makes much sense to me, and so, I’m just asking people to think about it from that perspective,” he said. “And that’s why someone like former Gov. John Engler, who I think is most responsible for building a conservative judiciary in Michigan, he’s seen it the same way and has been very close to my campaign and very helpful in supporting me.”

What Boonstra has going for him that Fink doesn’t have is the coveted endorsement of former President Donald Trump. Although the Supreme Court candidates are running on the non-partisan section of the ballot, a win from Trump could raise the electoral might of all Republican-nominated candidates in November.

As for the reason behind his run now after many years on the Court of Appeals, Boonstra said he wants to continue helping the state build sound conservative jurisprudence and that he was encouraged to run by several people “that I respect and who have held the office themselves.”

His endorsements include nods from four former chief justices of the Supreme Court: Robert Young Jr., Maura Corrigan, Stephen Markman, and Clifford Taylor. Boonstra also has the endorsement of several colleagues on the Court of Appeals and retired judges from across the state’s judiciary.

“They believe that I have the right judicial philosophy and the right judicial experience to help at the court, and to help with sound judicial decision making at the court that follows the rule of law and respects the separation of power,” Boonstra said. “Candidly and without any disrespect, I think we have lost that degree of respect currently. We had it one time, not that many years ago, and I want to help return the court to the respectability that I think it once had.”

Fink said the current court – with a heavy Democratic Party-nominated slant and a Republican Party-nominated incumbent chief justice who is often labeled a swing vote – lacks an originalist or “rule of law” justice.

“I don’t think that the rule of law and the original meaning of the text of the relevant law to a given case is at the forefront of the litigation. Instead, it seems to me that left-wing policy priorities are at the forefront of the resolution of the cases,” Fink said. “Once Justice Viviano decided to not run for reelection, it seemed to me it was important for someone to stand in and be a transformational leader, taking into account where the court is today and where those of us who favor an originalist, rule-of-law perspective of judicial decision making want to see that court go.”

Fink was endorsed by Engler and the Conservative Political Action Committee and two local county Republican parties, former Attorneys General Bill Schuette and Mike Cox, several county sheriffs, and a multitude of grassroots leaders. Fink has also received endorsements from Republican advocacy groups like the Michigan Taxpayers Association, Rescue Michigan, the Hillsdale Economic Development Partnership, and Pure Integrity for Michigan Elections.

Those watching the race said it was unclear who would come out on top in the Boonstra versus Fink matchup, as both have been hitting the pavement, reaching out to delegates, and trying to win over as many as possible. That includes cold calls to delegates.

Others said it was apparent that Boonstra and Fink were not only running strong campaigns but were doing all the right things to ensure delegates knew who they were voting for. That includes having a strong organization to keep whipping votes on the convention floor and not just relying on their ground games pre-convention.

The situation was not considered contentious, or at least to the degree that some other party-nominated races this year have the potential to be, but Fink did announce his run for Supreme Court well before Viviano decided to retire, saying he was going to run for the partial term that is also being sought by Bolden.

But Viviano’s departure opened up a full eight-year term that became immediately attractive to Fink, who was already laying the groundwork for a Supreme Court campaign in 2024. Boonstra entered the race after Viviano announced his exit.

Both candidates have strong conservative judicial philosophies and could be, in many ways, a steady conservative voice on the high court, which Viviano eventually became, more akin to Justice Brian Zahra and unlike the swing-vote patterns of Chief Justice Elizabeth Clement. That factor could be making the decision harder for some delegates.

Overall, Boonstra raised $35,230 in total contributions from donors and $2,621 in in-kind contributions. Boonstra has spent a good deal of that money, according to his pre-convention campaign finance report, with $28,185 in total expenditures.

Aside from the $20,725 Boonstra loaned his campaign, his largest donors were former MIGOP Chair Ron Weiser ($8,325), Paul Ganz ($1,000), and surprisingly Cox ($1,250), who publicly endorsed Fink.

The representative from Hillsdale has raised far more, according to this pre-convention filing, with $100,257 in the cycle and $81,507 of those funds in the most recent reporting period. Fink spent $65,577 this period and $82,416 throughout his campaign.

Among his largest donors, Fink raised $8,325 each from JC Huizenga, the founder of National Heritage Academies, former Secretary of State Terri Land, and Daniel Hibma, owner of the Land & Company property management firm.

O’GRADY AHEAD IN RACE FOR PARTIAL TERM: Several sources noted the campaign prowess of O’Grady as being a reason for his domination, with some saying the race for the partial term nomination was his to lose.

O’Grady was said to be running an active campaign and doing all of the things that Boonstra and Fink were doing on their side of the delegate ballot. He was also the first among the challengers to announce his run, followed soon after by Taylor and then DePerno.

Some sources said he was resonating with delegates in a big way and that DePerno and Taylor were getting little traction, but another said Taylor was at least resonating more than DePerno was with the state’s delegates.

O’Grady did not respond to a request for an interview.

The former judge has raised $21,790 throughout the campaign cycle and spent $16,641 of those donations since starting his campaign, according to this pre-convention campaign finance filing. His largest donors have been attorney Alan Ackerman ($5,000) and Home Depot bookkeeper Cynthia Monte ($5,000).

Few who spoke to Gongwer said DePerno was running a campaign like someone who wanted the seat, but some said he was doing the work and appearing at some local events.

The grassroots delegates still have an affinity for DePerno, some said, as he is currently facing prosecution for his alleged attempts to illegally obtain voting machines in order to prove unsubstantiated voter fraud in the 2020 election – a talking point that still resonates with some election integrity-minded delegates.

Others said DePerno, who bested former House Speaker Tom Leonard for the Republican nomination for attorney general in 2022, certainly knows how to prepare for a delegate fight at the convention but hasn’t shown them that he’s been preparing for it this time.

Some sources noted there was a fear that DePerno’s name and reputation could sink the Supreme Court ticket if he were nominated and potentially hurt Trump’s chances at the top of the ticket.

Others said delegates in places like Livingston County, who actively supported DePerno in his race for MIGOP party chair against the now-ousted Kristina Karamo, were, in turn, vocally supporting O’Grady for Supreme Court justice in 2024.

DePerno’s pre-convention campaign finance report shows he raised just $136 throughout the election cycle and spent $88. His figures were noted by a reporter for The Detroit News on X, formerly Twitter, but DePerno responded by saying that since that post, money has been rolling in.

A late campaign finance report filed by DePerno after the August deadline shows that a single donor, Demitri Dernis of Illinois, gave this campaign $1,041 in one itemized contribution.

Taylor was seen as a bit more of a wild card, with some sources saying they haven’t seen a particularly organized campaign from her. There was also a concern among some delegates about her conversion to Republican politics and tried-and-true conservativism based on her past.

But she is known for representing Karamo in her lawsuit against Detroit following the 2020 election and has been espousing the right talking points to show delegates she’d have a clear conservative vision for the Supreme Court. What’s hurting her ahead of the convention, some said, is her ability to get her name out.

Taylor has raised $8,119 during the campaign cycle with $1,018 in in-kind donations. She’s spent $586 throughout the campaign. Aside from the large sums she’s loaned her campaign, Taylor’s largest donor was Michal Glass of Rapid River with $200.

Neither DePerno nor Taylor have any endorsements listed on their respective campaign websites.