Feb. 28, 2025 | This Week in Government: Whitmer: We Must Compromise On Roads

In a pitch for a long-term road funding solution, Gov. Gretchen Whitmer told lawmakers and businesses that compromise is the only way to fix the problem.

The call out to Republican lawmakers and business groups that have resisted calls for tax increases was direct but not surprising. However, Whitmer told Democrats that cuts would also be part of the conversation.

“I know there are a couple of different plans out there, including mine, and I know none of them are perfect,” Whitmer said during her State of the State on Wednesday. “But what’s not OK is no plan. Michiganders won’t accept inaction.”

Whitmer said all parties involved need to recognize some “hard truths.”

“To my friends in the GOP, a long-term fix means new, fair sources of revenue. We can’t cut our way to better roads by slashing public safety, health, or schools,” she said.

To this, Democrats stood and applauded, but Whitmer said to them: “Cuts will need to be a part of the solution.”

There was little to no applause from either side of the chamber, prompting the governor to look toward the Republicans and lament, “Alright, no claps over here.”

And to businesses, Whitmer said, “We can’t put this on the backs of the middle class.”

“For all of us to be part of the solution, we must all compromise, and that’s the way it ought to be,” Whitmer said. “Let’s get back to the negotiating table in the coming days and weeks to find a long-term, bipartisan solution so we can fix more of those damn roads.”

Business groups have long advocated a fuel tax increase or increase in vehicle registration fees as a “user fee” for roads, but there’s been little to no support in the Legislature for hiking either one of those since the last road funding plan in 2015 did so.

Whitmer and House Speaker Matt Hall (R-Richland Township) have both released a road funding proposal. Whitmer has some potential new revenue from a Corporate Income Tax increase, a new wholesale marijuana tax, a digital advertising tax, and increased fees for heavy trucks – though she has not specified most of it, nor specifically declared support for raising the CIT. She also calls for removing the sales tax on fuel and replacing it with a revenue-neutral gas tax, which would lead to about $1 billion more going to roads.

Hall’s plan includes the tax switch – something legislative Republicans have long called for – and cuts to get a $3 billion funding plan for roads.

Businesses and Republicans have panned Whitmer’s proposal and its inclusion of tax increases.

Rob Coppersmith, executive vice president of the Michigan Infrastructure and Transportation Association, said in a statement it’s time for urgent action.

“The state is barreling toward a road funding cliff at the end of this year, and we have two road funding plans up for consideration in Lansing that would save thousands of construction jobs while making our roads and bridges safe,” he said. “This is a critical moment for our state, as inaction from Michigan’s leaders is not an option. Michigan’s current road crisis is the result of decades of underfunding. The failure to implement a long-term funding plan threatens thousands of critical construction jobs while putting drivers at risk of paying even more for car repairs due to the crumbling roads in their communities.”

Whitmer said she used the State Transportation Commission to speed up $3.5 billion in construction but also acknowledged it was a short-term fix and is now nearly exhausted.

Republicans, including Senate Minority Leader Aric Nesbitt (R-Porter Township), said funding for roads can be found in the existing budget.

“With road funding, first and foremost, 100% of the taxes collected at the pump need to go roads and bridges, Period, paragraph. And that’s something where I think we can easily get to and easily find a consensus,” Nesbitt said. “Any of these new taxes … at the end of the day, we don’t need any new taxes to be able to fix the roads. The budget has grown by over 40% under this governor over the last six years.”

Sen. Mark Huizenga (R-Walker) questioned the talk about road funding and needing new revenue.

“She talked about road taxes and what we need to do there, but the reality is that so much has been bonded that this is only hurting,” Huizenga said. “She mentioned Lansing’s roads, for instance. The interest that we pay on that bond comes right off the top, and it means our counties gets less dollars, means that our cities get less dollars, so this is a self-inflicted problem, and because the bond is the duration of essentially the life of the road, it’s only going to cause us problems in the long run.”

Sen. John Damoose (R-Harbor Springs) also said he wants to see the state prioritize its existing revenue first when it comes to roads.

“I think there’s money to be found there,” Damoose said. “I’m not ready to start talking about increasing revenue to cover road costs because I think there’s extra money there.”

Hall said money that has been targeting large companies for economic development projects in recent years should instead be used to beef up road funding.

“I put roads on the table. The House Republicans led on roads,” Hall said. “I put a plan on the table that would fix our roads without raising taxes by prioritizing roads over corporations. Gov. Whitmer, then I challenged her. I said: ‘Put out your plan,” and she did last week. Her plan raises taxes. We can do it without raising taxes by prioritizing roads over corporations.”

Hall said that Whitmer has agreed with his stance that all money collected at the pump should go to roads. Along with $500 million in cuts in the governor’s plan, he said that would get them halfway to at least $3 billion on roads.

Directing the new money in any roads plan toward local roads will also be a priority to help rebuild roads badly in need of upgrades, he added.

Rep. Alabas Farhat (D-Dearborn) introduced HB 4142, HB 4143, and HB 4144 on Wednesday. The bills include portions of Whitmer’s plan.

The legislation was introduced at the end of last term, and they are the only bills on road funding to be introduced this term.

“The bills are introduced,” Farhat said. “Let’s get started on this conversation now, and let’s get it done. Let’s use the same energy used on the ESTA bills on roads and get it done as soon as possible.”

“I think it’s a larger conversation,” he said about coming to an agreement on roads. “When you talk about a budget, we’re talking about funding schools with the sales tax at the pump. We’re funding constitutional revenue sharing for our local municipalities with that same sales tax. This is about making sure that we’re able to not only fix our neighborhood roads and invest in them,” he said. “It’s also about making sure our schools aren’t just held harmless, but we’re actually investing in a meaningful way so we can finally catapult out of the bottom 10 performing schools in the nation and actually be a leader.

There is no one independent fix for road funding, Farhat said.

“You have to look at it holistically,” he said. “This is about looking at the way our state spends funds and making sure we’re prioritizing the basics: that’s schools, that’s infrastructure, that’s our roads.”

The first bill would create a digital advertising services act with revenue potentially going to the School Aid Fund and the Transportation Fund. HB 4143 would include an earmark from the Corporate Income Tax for roads, and HB 4144 would increase the CIT by 2.5 percentage points, with the increase going to the School Aid Fund.

Farhat said he did not buy the argument that increasing the Corporate Income Tax would hurt the state’s business climate.

“I’m really tired of the talking point that the Corporate Income Tax is going to impact competitiveness,” he said. “Let’s be clear: if the business community wants to come to the table on a road solution that doesn’t put costs on the working families of this state, their seat is ready.”

He pointed out that the Trump administration is already cutting the federal corporate income tax from about 34% to 22%.

“They’re getting a huge savings there,” he said. “It’s only right that us a state that has really invested heavily in economic development begins to be more aggressive in capturing revenue from the activity generated.”

Michigan Chamber of Commerce President and CEO Jim Holcomb said increasing the CIT would be damaging for business and send the wrong message as the state looks to grow.

“The business community is committed to being part of the solution,” he said in a statement. “We share the governor’s optimism about Michigan’s bright future, but turning vision into reality requires thoughtful, meaningful policymaking that ensures our state remains competitive, open for business, and a place where free enterprise can thrive.”

Divided testimony marked Thursday’s Senate hearing on legislation that would codify a federal drug pricing program supporters said would prevent restrictions on access to certain drugs, while opponents contended it would not expand patient access.

Codifying the federal 340B program was the focus of SB 94, which is a program that requires pharmaceutical manufacturers that participate in Medicaid to sell outpatient drugs at discounted prices to health care organizations for uninsured and low-income patients. A second bill, SB 95, outlines transparency rules for the program.

Members of the Senate Oversight Committee voted 5-0 to report the bills, but not before hearing testimony.

“The 340B drug pricing program has allowed and been an instrumental part of the safety net for our rural hospitals, for our health centers, as well as hospitals that are working in urban areas,” SB 94 sponsor Sen. Sam Singh (D-East Lansing) said.

Similar legislation cleared the Senate last December but did not get taken up in the House (See Gongwer Michigan Report, December 13, 2024).

Sen. Jonathan Lindsey (R-Coldwater), sponsor of SB 95, said price transparency in health care has been his top priority since taking office.

“We have reached a point where nearly 20% of our entire economic activity is consumed by paying for health care,” Lindsey said. “This affects every one of us and all people we serve.”

He said the bill would incentivize providers to fully comply with the federal law as well as protect consumers from being subject to collections by providers that are out of compliance with federal requirements.

Matt O’Brien, vice president of pharmacy at Great Lakes Bay Health Center, spoke in support of the bills. He told committee members the 340B program has been a significant help to providers and it is important to ensure its continued strength and its funding.

“I’m in the pharmacies every day seeing the effects of the 340B program and how those help our patients,” O’Brien said.

Deidra Wilson, senior vice president of government relations with McLaren Health, thanked members for quickly reintroducing the legislation and recognizing the need for movement on the policy.

“To jeopardize a program like that is, it’s devastating to a community,” Wilson said.

Travis Butchello from the Healthcare Distribution Alliance expressed concerns about the bills.

“The inclusion of wholesalers in Senate Bill 94, under our review, conflicts with our obligations under federal drug enforcement administration regulations as it relates to the delivery of dangerous controlled substances, as well as contradicts legal obligations that some of our members have under the national injunctive relief requirements and the wake of the opioid crisis settlements,” Butchello said.

This, he said, puts members in an untenable position under the language of SB 94. Butchello asked that the wholesale distributor references be removed from the bill.

Morgan Halloran, director of state advocacy for the Pharmaceutical Research and Manufacturers of America, was also opposed to the bill.

“PhRMA opposes SB 94 because it locks in exactly what is broken in the 340B program and enshrines in state law problems that ensure continued exploitation of the program that generates significant profits for large hospital systems, pharmacy benefit managers, chain pharmacies, and other third-party actors,” Halloran said.

Kalvin Pugh, state 340B policy director for the Community Access National Network, opposed the bill, citing the sharp growth of the program. He also said there does not appear to be evidence that savings are being passed on to patients.

“Unchecked 340B encourages hospital consolidation, shutters non-chain pharmacies, devastates rural health care access … Michiganders.”

“Michiganders would be better served if this Legislature, instead of expanding this program, chose to conduct further meaningful oversight of these entities and work to ensure that these entities operate as truly charitable institutions, rather than profiteering off the needy Michiganders,” Pugh said.

Senate Democrats are declaring victory in their legal battle against House Republicans for withholding from presentation nine bills passed in the previous legislative session – but the judge’s order issued Thursday explicitly notes that the court will not compel the House to present the bills to the governor.

That leaves open the question of whether Speaker Matt Hall (R-Richland Township) can refuse to present the bills even as Senate Majority Leader Winnie Brinks (D-Grand Rapids) and her office said the bills must be presented in March.

By virtue of Judge Sima Patel‘s Thursday opinion and order, Senate v. House (COC Docket No. 25-000014) finds itself at the end of the line in the Court of Claims, possibly on the road to a protracted chamber dispute if the House finds that it still doesn’t need to present the bills.

The situation began in late 2024. The Senate passed about 100 House bills on December 19-20 in identical form to how they passed the House, meaning they only needed to go through enrollment and formal presentation to the governor. But for reasons never explained, then-House Speaker Joe Tate and then-House Clerk Rich Brown did not order the completion of enrollment and presentation before the Democratic majority ended and the new Republican majority began at noon on Jan. 1.

The House presented all but nine bills on Jan. 8 as the House convened for the new term. Gov. Gretchen Whitmer has signed or vetoed all of those bills. But nine remain in the House, and Hall has said they are undergoing a legal review and questioned whether a new Legislature is bound to present bills passed in identical form by the previous Legislature but not sent to the governor.

A critical legal question at issue is whether the Constitution mandates bills passed by the Legislature be sent to the governor or if it only mandates bills can only become law if passed by the Legislature and signed by the governor. Brinks has taken the former position, Hall the latter.

Patel, an appointee of Gov. Gretchen Whitmer, wrote that the Senate and Brinks had a constitutional right to have the bills presented by the House and Hall but said she would not interfere with the Legislature’s processes out of respect for the branch and its functions.

She held that Article IV, Section 33 mandates the bills be presented to Whitmer with sufficient time for her to review the bills before the earliest date that they could take effect. But Patel countered by writing that the Constitution didn’t specify the person or entity responsible for presenting the bills, and the court would not be making the determination on that issue, either.

“There appears to be no dispute that because the nine bills originated with defendant Michigan House of Representatives, it currently controls their presentment, and its rules require defendant Scott Starr, as clerk of the House, to carry out this duty,” Patel wrote. “However, Michigan courts have declined to interpret and enforce internal rules of the Legislature in the past, and the court finds good reason to follow such precedent here. … Simply put, all bills passed by the Legislature must be presented to the governor within time to allow 14 days for the governor’s review prior to the first date that they could take effect – even those passed during a ‘lame duck’ session in an even year. The procedures through which this takes place is a legislative function in which the court will not interfere.”

The Senate’s request for mandamus relief was therefore denied, and the House’s motion for summary disposition was granted with respect to the mandamus argument. The House lost on its motion in respect to its argument that the Constitution was silent on if the bills needed to be presented at all.

Although there was no clear mandate from the court to make Hall deliver the bills to Whitmer, Brinks, in a statement, said the Senate prevailed and that it was time for the bills to reach the governor’s desk.

“This case was clear as day. The most solemn and fundamental duty we have as legislators is to uphold the Constitution, and I am grateful to Judge Patel for making that abundantly clear with her decision today,” Brinks said. “I hope that this serves as a signal to any legislator who attempts to skirt the rules: we will hold you accountable to doing right by the people of Michigan. Let’s now put this to bed and move forward with the work of the people – they’re counting on us.”

A spokesperson for Brinks, when asked how this could be considered a win if Hall wasn’t being compelled to present the bills despite the potential constitutional violation, said it was certainly a win in their eyes and that the Constitution mandated – via Patel’s declaratory ruling – the bills be presented by March 19.

Hall, however, in a statement, gave no indication that the ruling was a loss for his caucus. He also didn’t indicate whether he planned to deliver the bills any time soon, nor did he signal that the House’s legal review of the bills, which constituted the holdup, was over.

“I’ve been saying since the beginning that the Senate could not sue a speaker of the House because of a political disagreement and that the court could not force the House to present bills from a previous session,” he said. “For some reason, the Senate decided to sue me anyway. That decision was clearly politically motivated, completely unprecedented, and – as the court agrees – illegal.”

Hall called the lawsuit “an embarrassing mistake by the Senate.”

“I also appreciate the judge acknowledging the House is responsible for conducting its own business,” Hall said. “We will include the judge’s ruling into our ongoing thorough legal review of this situation.”

Neither party indicated whether they had plans to appeal the decision in their dueling statements.

House Minority Leader Ranjeev Puri (D-Canton), in a statement, called on Hall to push the bills across the finish line.

“Holding these nine bills hostage came at the cost of Michigan taxpayers. The bills, if signed into law, would lower health care costs, add pension benefits for corrections and conservation officers, help to financially protect struggling workers, and more,” Puri said. “I applaud the ruling today and call on Speaker Hall to comply with the court’s decision.”

The Michigan State Housing Development Authority invested $2.15 billion in affordable housing, supporting the construction, rehabilitation, or purchase of over 12,421 homes in 2024, its annual report released Thursday said.

In 2021, Gov. Gretchen Whitmer set a goal of building or rehabilitating 75,000 homes within five years. MSHDA was set to reach the goal a year ahead of schedule, so Whitmer raised the bar to 115,000 homes. So far, Michigan has already rehabilitated 64,270 homes.

“Last year, we surpassed our ambitious goals by listening, removing barriers, and making it easier to access MSHDA programs,” MSHDA Executive Director Amy Hovey said in a statement. “We moved quickly to find solutions and will continue to creatively leverage new resources, ensuring we effectively support housing opportunities in all parts of the state. Additionally, housing development created approximately 4,135 construction jobs paying over $157 million in wages.”

According to data collected from MSHDA, the average age of renters in Michigan is 56, and the average household income is almost $19,000. The average age for homebuyers is 33, and the average household income is almost $68,000. More than 5,000 Michigan residents became homebuyers through MSHDA’s single-family mortgage products.

Other related programs invested $37 million in contribution to the construction and rehabilitation of 481 housing units.

In 2024, through the federally funded housing choice voucher program, MSHDA was able to find more than 34,000 families stable housing with $272 million in housing choice vouchers. The voucher program assists low-income families, the elderly, and the disabled in affording housing.

New investments for fiscal year 2025 include a first-generation down payment assistance pilot. Currently, MSHDA offers up to $10,000 in down payment assistance. With the investment of new resources from the Legislature, the agency hopes to increase this offer to $25,000 for down payment assistance.

Another new investment program is the employer housing fund pilot, in which MSHDA will match funds to employers investing in housing.

Efforts to encourage clean and reliable nuclear energy are underway in the House from a bipartisan coalition.

Rep. Pauline Wendzel (R-Watervliet), Rep. Joey Andrews IV (D-St. Joseph), Rep. Jamie Thompson (R-Brownstown), Rep. Mike McFall (D-Hazel Park), Rep. Samantha Steckloff (D-Farmington Hills) and Rep. Greg VanWoerkom (R-Norton Shores) put together a package of bill to increase development of nuclear technology in Michigan.

HB 4124, HB 4125, HB 4126, HB 4127, HB 4128, and HB 4129 are set to be taken up in committee next week.

“This bipartisan package is about more than energy policy; it’s about creating high-paying jobs, thriving local communities, and attracting world-class talent that turns ambition into achievement,” Wendzel said in a statement. “Other states are working hard to lead in this space, but with this package, Michigan is showing that when we champion innovation, we don’t just compete—we set the standard.”

The bills plan to create higher nuclear and hydrogen education programs, create a production tax credit, incentivize employment and retention within the field, and advance nuclear reactors.

“We’re coming together – Republicans and Democrats – to make Michigan a national leader in nuclear energy,” Thompson said in a statement. “This plan creates the framework for investments in safe, clean, and reliable nuclear technology, ensuring a stronger, more secure energy future for our state.”

Representatives said they are looking to create more employment opportunities and economic growth.

The Palisades Nuclear Power Plant in West Michigan, which ended operations in 2022, is set to reopen after Holtec International announced plans to install two small modular reactors in the facility. Holtec International is an energy industry equipment supplier.

“With the Palisades Nuclear Power Plant set to make history as the first decommissioned plant to be revived, Michigan has a unique opportunity to attract cutting-edge technologies, highly specialized industries, and top-tier talent,” Andrews said in a statement. “These bills will build a talent pipeline that not only supports our existing nuclear infrastructure at Palisades, Cook, and Fermi but also fosters innovation in advanced reactors and hydrogen energy. By investing in training, educational grants, and scholarships, we’re positioning Michigan to meet its clean energy goals and become a national leader in energy innovation for decades to come.”

The bills will be taken up by the House Energy Committee on March 4.