Honigman Capitol Report

Governor's Office

Governor Suggests Compromise of Legislative Earmark Transparency

Governor Gretchen Whitmer is proposing a compromise to resolve the conflict between the Senate Democratic and House Republican majorities regarding legislative earmark transparency.  The proposal suggests a 45-day disclosure period for earmarks, which is a middle ground between the House's 60-day requirement and the Senate's 10-day proposal.   House Speaker Matt Hall has insisted on a 60-day disclosure period, arguing that a shorter timeframe would not allow for proper scrutiny of proposals.  The original agreement required earmark requests to be released by April 1, 90 days before the budget deadline, but this time element was removed from HB 4420 and moved to SB 596. The Senate does not recognize any agreed-upon disclosure window and is puzzled by Hall's strong stance on the issue.  The Senate plans to focus on committee work this week, delaying any floor action on the matter.  Governor Whitmer is eager to move on to economic development discussions, including tax credits and job creation proposals, and is suggesting the 45-day window along with other technical adjustments to facilitate progress.  It is uncertain if Hall or Senate Majority Leader Winnie Brinks will accept the 45-day proposal, as Hall has already reduced his original 90-day proposal, and Brinks may be reluctant to concede further.  Hall's HEAT proposal aims to increase transparency in the earmark process, which he views as historically secretive and potentially corrupt.  Whitmer's office has not commented on the 45-day proposal, but her team is keen to advance economic development discussions.

Committee News

Senate Bill Package Seeks to Eliminate MEDC

Republican Senator Thomas Albert is spearheading a legislative effort to dismantle the Michigan Economic Development Corporation (MEDC) through a 53-bill proposal, with 42 bills already introduced.  The MEDC, established in 1999 under Governor John Engler, is a public-private agency that provides grants and programs to attract businesses to Michigan.  Recently, the MEDC has faced criticism for awarding grants from the now-expired Strategic Outreach and Attraction Reserve (SOAR) fund to corporations that did not fulfill job creation promises. Senator Albert argues that the MEDC has wasted taxpayer dollars on risky corporate giveaways and politically connected grants, advocating for its closure and the retention of only successful programs.  In response, MEDC spokesperson Danielle Emerson emphasized the agency's focus on securing advanced manufacturing investments, particularly in the automotive sector, to create jobs and economic opportunities in Michigan.  The MEDC's effectiveness was also questioned during a recent Republican gubernatorial debate, with candidates like Senate Minority Leader Aric Nesbitt and Karla Wagner expressing support for its elimination.  Wagner criticized the practice of offering tax abatements to attract out-of-state companies while neglecting local businesses.  However, she showed openness to providing small loans to Michigan-based businesses. Former Republican Senator Ken Horn, who led the Senate's economic development community, defended the MEDC, highlighting the challenges of attracting businesses to a politically diverse state like Michigan.

Election News

Sheffield Wins Detroit’s Mayoral Race and other Election News

Mary Sheffield, Detroit's city council president, won the Detroit mayoral race against Solomon Kinloch Jr. with a significant lead, becoming the city's first female mayor.  Sheffield's victory was decisive, with her leading 76.79% to 22.69% before absentee ballots were counted, and she was declared the winner by MIRS at 9:19 p.m. after more than 55,000 votes were tallied. Her victory was celebrated at MGM Grand Detroit with notable attendees, including Michigan Democratic Party Chari Curtis Hertel Jr. and Secretary of State Jocelyn Benson.  Her campaign spent significantly more on advertising than her opponent's.  As city council president, she led initiatives like "Occupy the Corner Detroit" and the right-to-counsel ordinance.  Sheffield's family has a legacy of activism, with her grandfather being a prominent labor activist.

In other Detroit election news, Democratic Reps. Tyrone Carter and Karen Whitsett lost their bids for Detroit City Council seats.  Former Sen. Coleman A. Young II and former House Minority Floor Leader Mary Waters were re-elected to at-large posts.  In Dearborn Mayor Abdullah Hammoud, won his second term, while a proposal to create a ward system in Dearborn failed.  In Sterling Heights, several council members, including Mayor Michael C. Taylor, were re-elected. Other notable election outcomes included Kevin Coleman winning another term as Westland mayor and Mike McGuinness winning the mayoral race in Pontiac.

Regarding bonding proposals, 60% of the 53 proposals passed, with the largest requests in Novi and South Lyon Community Schools being approved.  The total amount of bonding requests was $3.734 billion, with 65% of the money approved by voters.  Millage increases had a mixed outcome, with 38% of the increases failing.  Several unique proposals were also decided, such as Niles opting out of recreational marijuana and Menominee opting in.

On Point

Client Alert: New Compliance Requirements Under Michigan’s Temporary Tax Relief for Tipped and Hourly Workers