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Detroit Regional Chamber > What COVID-19 Supplemental Budget Passage Means for Michigan Businesses

What COVID-19 Supplemental Budget Passage Means for Michigan Businesses

March 10, 2021
Gov. Whitmer signed two coronavirus relief supplemental bills into law but also line-item vetoed about $650 million from those two bills and put in question an additional $841 million for schools that are part of her veto of another bill that would have transferred the power to close schools to in-person learning from state to local authorities. She cited problems with the bills and lack of negotiations with the Legislature as reasons.

In addition to the uncertainty surrounding school funding, the Governor line-item vetoed four additional measures including $405 million in business tax relief, $87 million for private schools, $150 million into the state unemployment compensation fund, and $10 million to aid parents who enroll their kids in summer school.

Key Provisions in the Supplemental Appropriation

  • Gov. Gretchen Whitmer signed at least $2.5 billion in supplemental funding into law on Tuesday.
  • The signed legislation allows for the release of hundreds of millions of dollars in targeted aid for Michigan. It includes $283 million in federal emergency rental assistance, a $2.25 per-hour wage increase for direct care workers, $555 million in testing and contact tracing funds, and $110 million for vaccine administration dollars.
  • The Governor vetoed provisions that would have limited the Michigan Department of Health and Human Services from exercising public health restrictions.
  • The total supplemental budget contained $4.2 billion.

Items Michigan Businesses Should Be Watching

  • State Budget Director Dave Masseron sent a letter to legislators asking for negotiations no later than Friday, March 12, to solve these issues and find ways to spend the full federal allotment of $2 billion. He said the vetoed funding represented “key points of difference between us” but not “an unwillingness to work together.”
  • Just as she did in December, the Governor once again vetoed a provision in the bill that would backfill the Unemployment Insurance Trust Fund from the General Fund. The Republican legislative proposal would have provided relief to businesses. While this is not an ideal scenario for the Chamber, budget analysis shows that the Trust Fund is in a stable financial position.
  • The Chamber is also disappointed that the $405 million of property and other tax relief for businesses was line-item vetoed by the governor. At a time when many Michigan businesses continue to struggle with the pandemic’s impact on the economy, this tax relief would have provided critical assistance.

The Chamber’s Government Relations team will continue to monitor negotiations and work with leaders from the state budget office and legislature on behalf of Michigan businesses.