Honigman Capitol Report

Governor's Office

Continuity of Operations Amid Budget Uncertainty 

Governor Gretchen Whitmer's office is emphasizing the importance of "continuity of operations" to cabinet members as the fiscal year end approaches, rather than focusing on potential layoffs and shutdowns. Tricia Foster, Whitmer's Chief Operating Officer, expressed gratitude to the Cabinet for providing the state Budget Office with plans to maintain operations if a budget is not passed by October 1. Foster highlighted the public's expectation for consistent and quality state services, which impact families and communities directly. The Cabinet plans to meet regularly to refine operational strategies in case a budget is not approved by the deadline. Senate Majority Leader Winnie Brinks did not dismiss the possibility of adopting the House's continuation budget, which was passed last spring, to ensure government operations continue. Brinks indicated that the strategy would depend on developments in the coming week. House Republicans have proposed a Fiscal Year 2026 budget that allocates an additional $3 billion from existing funds for road improvements, as the Governor's Rebuilding Michigan bonding program nears its end. However, MDOT Director Bradley Wieferich criticized the budget, stating that proposed cuts would hinder the department's ability to address road and infrastructure issues. He warned that eliminating bridge bundling could lead to severe consequences, including a loss of $230 million in federal grants and increased future expenses. Additional impacts of the House-passed budget include a $9.7 million loss for local transit agencies.

Committee News

Senate Democrats' Auto Insurance Package 

Senate Democrats have introduced an eight-bill package aimed at enhancing transparency and accountability within the auto insurance industry. The proposed legislation seeks to provide the Department of Insurance and Financial Services with additional tools to penalize statutory violations by insurance companies and to improve consumer protections against deceptive practices. Senator Mary Cavanagh emphasized the financial burden of insurance costs on families and the need to protect Michiganders from harmful insurance tactics. As chair of the Senate Finance, Insurance and Consumer Protection Committee, Cavanagh took testimony from individuals who have experienced deceptive practices by auto insurers, which informed the proposed legislative changes. The package includes several key bills: SB 543, which introduces civil fines for deceptive business practices; SB 544, which mandates the completion of all underwriting before policy issuance and prohibits post-claim underwriting; and SB 545, which requires insurers to notify policyholders of material changes to their policies  SB 546 proposes penalties for late claim payments and mandates insurers to disclose data on unpaid claims on their websites.  SB 547 aims to enhance compliance requirements for utilization reviews, while SB 548 establishes a process for reviewing market conduct to ensure adherence to marketplace rules. Additionally, SB 550 requires more data to be included in auto insurer manuals, and SB 549 focuses on improving cybersecurity for customers.

Election News

Michigan Lawmakers Consider Moving Primary Date

Michigan lawmakers are contemplating a proposal to move the state's primary elections from August to May, a change that could significantly impact the 2026 election cycle. This proposal is being considered by both the Democratic-led Senate and the Republican-led House, despite the lack of bipartisan cooperation in the Legislature this year. If enacted, the change would extend the general election campaign by three months, allowing major party nominees more time to focus on independent candidates and would also alter candidate filing dates. Senate Majority Floor Leader Sam Singh expressed optimism about finding a compromise to introduce related bills soon.  In the House, Election Integrity Chairwoman Rachelle Smit is working on drafts to move the primary date, aiming for bipartisan support to implement the change by 2026. Smit believes that the longer timeframe between the primary and general elections would be beneficial, especially with the recent changes in election laws and early voting practices. Michigan clerks have long argued that the early August primary does not provide sufficient time to canvass results and prepare for the November general election. The proposed change is supported by the Michigan Association of Municipal Clerks, which has been in discussions with lawmakers. The change is also seen as a cost-saving measure that would serve voters better. Previous attempts to move the primary date to June were unsuccessful, facing opposition from school boards concerned about scheduling millage elections.  However, there is some support for the idea, including from Secretary of State Jocelyn Benson, who believes consolidating elections would save taxpayer dollars. The 2026 elections will be significant, with voters electing a new U.S. senator and filling every seat in the state Legislature and U.S. House delegation.

On Point

Client Alert: Illinois Expands Employee Leave and Workplace Protections

Looking Ahead

Members are beginning to speculate that when a budget shutdown does occur it will last at least until October 10 meaning that schools across the state will come right up to the deadline for funding before a budget is passed. This will also mean the Governor will have to immediately sign the budget to keep payments going to schools across the state preventing the worst effects of a shutdown from taking hold. There are optimists in both chambers who believe a shutdown is still avoidable, however, the likelihood is slimmer with budget targets still unavailable and no conference committees announced.