Honigman Capitol Report

Growing Michigan Together Council Submits Report

The Growing Michigan Together Council submitted its final report to Governor Whitmer last week highlighting action items for improving the state’s population growth. The report focuses on three strategies. The first strategy is building a lifelong education system focused on skills and competencies for future needs. The council has identified transforming the education system with alignment, accountability and funding as the key to this strategy along with making higher education more affordable and accessible. The second strategy is creating an economic growth plan to make Michigan an innovation hub for the Midwest by supporting entrepreneurs and all businesses in creating high-wage, knowledge-based jobs and implementing regional innovation districts to attract more talent. The last strategy is to create thriving communities that pull in young talent, which includes developing public transit systems, durable infrastructure and housing opportunities. The full report can be found here.

New Political Financial Disclosure Requirements Signed

Financial Disclosure Bills were signed into law earlier this month requiring state legislators, executives and candidates to disclose assets and annual non-state revenue to the Department of State. The package of bills, SB 613, SB 614, SB 615, SB 616 and SB 374 require elected officials and candidates to disclose non-state income streams of at least $1,000 annually and non-business assets held for investment or income generation worth at least $1,000 per year in addition to any debt of $10,000 to a single creditor. Democratic Senators Jeremy Moss and Sam Singh sponsored the first two bills setting the reporting requirements. Moss stated “[a]fter years of pushing for more openness and transparency in policymaking, we have finally enacted Michigan’s first-ever financial disclosure law that would unveil potential conflicts of interest from the officeholders who govern our state.” Republican Senators Mark Huizenga and Ed McBroom sponsored the next two bills which set up punishments for noncompliance. McBroom stated “I’m glad to see these disclosure bills enacted. This is a helpful step to grow people’s trust in their government and leaders…[t]his will help the people and the legislature hold our leaders accountable and to know when real conflicts of interest exist.”

Supplemental Spending Bill waiting on Governor Action

HB 4292 was presented to Governor Whitmer earlier this month and was signed yesterday. As previously reported, highlights of the budget include $174 million towards building a new health and science laboratory in Lansing, a new state psychiatric hospital complex in Northville Township and projects at Michigan State University along with $114 million in debt relief for a handful of K-12 districts throughout the state. In addition, the bill includes $6.5 million to implement the new state Department of Lifelong Education, Advancement and Potential and $30 million for a settlement between the state, Great Lakes Water Authority and Highland Park over unpaid water bills. Honigman LLP backed HB 4084 will receive $10 million to be distributed to local tax collecting agencies to refund personal property taxes paid or to redistribute unpaid 2021 personal property taxes to taxing units that were levied under the State Essential Services Assessment.

2023 Legislative Session – Year in Review

The 102nd Legislature has had a busy session so far with unofficial year-end statistics showing 2,366 bills introduced with 534 completed. Top bill sponsors/co-sponsors in the House include Democratic Representatives Carrie Rheingans (654), Jimmie Wilson (555), Rachel Hood (496), Felicia Brabec (485) and Kara Hope (483). The top sponsors/c-sponsors in the Senate include Democratic Senators Stephanie Chang (357), Erika Geiss (329), Rosemary Bayer (296), Sue Shink (285) and Paul Wojno (283). The most active House Committees by number of bills were Government Operations (186), Health Policy (102), Judiciary (97), Criminal Justice (75) and Regulatory Reform (59) while the Senate Committees with the most activity included Civil Rights, Judiciary and Public Safety (106), Finance, Insurance and Consumer Protection (63), Regulatory Affairs (45) and Appropriations (44).

Line 5 Decision at the MPSC

Earlier this month, Michigan regulators at the Michigan Public Service Commission (MPSC) approved a key permit for Enbridge Energy’s Line 5 tunnel, a win for the Canadian energy company in a years-long conflict over the project. The vote at the MPSC was 2-0 with one member abstaining. The MPSC has been in deliberation regarding the decision for more than three years. Commission chair Dan Scripps and the MPSC have received criticism from environmental organizations regarding the permit approval. Scripps claims the MPSC lacks authority to shut down the tunnel, “I want to be clear, the commission does not have the authority to shut down the segment that’s there. The question before us was: should it be rehoused within a concrete-lined tunnel? At a minimum, if you shut it down, you’d probably rely more on trucks and rail, and we found ultimately that those would likely cause additional environmental impairment, beyond routing it in a tunnel.” Although the decision and criticism regarding the decision has been in the headlines, construction cannot actually begin until a federal permitting process is completed by the U.S. Army Corps of Engineers. A spokesperson for Enbridge called the vote “a major step forward in making the Great Lakes Tunnel Project a reality, protecting the Great Lakes and securing the vital energy people in Michigan and surrounding region rely on every day.” Business and labor groups also supported the decision. Environmentalist and Michigan Native American tribes criticized the decision, stating that the project would violate tribal treaty rights and cause decades more of fossil fuel dependency at a time when climate consequences are on the rise. It is likely that the decision will be challenged in court.

Looking Ahead

The largest political dynamic in Michigan for the beginning of 2024 is, undoubtedly, the 54-54 partisan split in the House of Representatives. However, while likely temporary, the loss of a democrat majority will influence any business conducted in the chamber until April special elections fill seats in Warren and Westland vacated by the successful mayoral campaigns of Lori Stone and Kevin Coleman. While the previous 56-54 majority was as slim a margin as possible in the 110 seat House, Speaker Tate was able to find the votes necessary to pass democrat-led budgets and policy priorities throughout 2023.

After the turn of the new year, the political engine of state government in Michigan typically reaches ignition by late January, when the Governor delivers the State of the State address. The gears will further engage with the presentation of the administration’s Executive Budget Recommendations to the legislature by mid-February. After analyzing the information from the administration’s proposed budget, legislative budget committees and subcommittees will take testimony from stakeholders and impart their perspectives over the months from late February through June.

With democratic leadership certain to count the days until their partisan advantage is expected to be restored in April, 2024, we are all watching closely for what level of bi-partisan collaboration may be possible in the intervening days. In terms of official signals, however, the House and Senate schedules have been published and appear as normal. There are no outward signs of a reduced session schedule. Only time will tell how this plays out in reality.

2024 is an election year, and one with the potential of bringing a return to the fractious presidential race of 2020 between President Joe Biden and former President Donald Trump. In Michigan, only the House of Representatives will appear on the ballot. This means the Senate and statewide offices, such as the Governor, Secretary of State, and Attorney General, will be comfortably, (or not), on the sidelines next fall. While the “October Surprise” has become a cliché in political campaigns, most observers can likely agree that any election involving the outsized Trump personality is hard to predict. State races are unquestionably at risk of becoming proxy wars for the culture and messages at the top of the ticket. While we suspect Michigan legislators will be in a hurry to wrap up budget business as soon as possible (i.e. June) to hit the campaign trail uninterrupted, we are all just guessing at this point what the electoral mood and conversation might be in fall 2024. A Biden/Trump race is likely to continue the themes of the last 4 years, with the significant difference being Biden now has a record of his own in the White House and Trump has accumulated greater legal jeopardy than before. While neither of these dynamics may move the partisan base, the elusive moderate and/or apolitical voters will judge which of the two well-known candidates and arguments they fear the least.