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Sunday, 27 September 2015 19:20

Fall legislative preview: Business groups champion road funding, energy policy, blocking ballot initiatives

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Business groups in Lansing and West Michigan have a full legislative agenda this fall, with at least five topics they hope lawmakers will take action on and two ballot initiatives they hope Michigan voters will reject.

While road funding and contentious ballot initiatives may be grabbing the most headlines, business groups also remain focused on fundamental issues involving third-grade reading and even how state agencies deal with unclaimed property.

Lobbyists with the state and local chambers of commerce talked with MiBiz to share the policy goals they hope to reach by the end of the session in mid-December.


There’s little dispute among business leaders that finding a permanent road-funding solution remains at the top of the list over the next 12 weeks of the 2015 session.

Andy Johnston, vice president of government affairs for the Grand Rapids Area Chamber of Commerce, said the chamber recognizes the state won’t be able to make room in the current budget to “cut our way out of this problem — not if we want a functioning state government.”

With a $1.2 billion goal in mind, Johnston said the two main options have come from the governor, who wants to raise an additional $800 million and cut $400 million from the budget, and the state House, which wants to equally raise $600 million and cut $600 million.

“We’ll see what comes out,” Johnston said. “We have to get a solution.”

Meanwhile, roads continue to deteriorate and many recognize the price tag to make significant fixes will only increase over time without action.

Since a statewide vote in May to raise the gas tax from 6 percent to 7 percent failed by a 4-1 margin, negotiations within the Legislature have stalled because Republicans couldn’t muster enough supportive votes from Democrats, who have sought to tie other issues — like the prevailing wage and Corporate Income Tax ballot initiatives — into the debate.


Meanwhile, both legislative chambers have been active this year in crafting a new comprehensive energy policy as the state’s last one — a 2008 law that established renewable energy and energy efficiency standards — is scheduled to level off at the end of the year. Utilities remain on pace to meet the 10 percent renewable energy mandate by the end of 2015.

While Democrats have announced they want to see the Renewable Portfolio Standard grow over the next seven years at the same pace as it has until now, Republicans are looking to end mandates entirely.

The Republican chairmen of the House and Senate energy committees — Rep. Aric Nesbitt, R-Lawton, and Sen. Mike Nofs, R-Battle Creek — both support turning to an Integrated Resource Planning process in lieu of the mandates. That would require utilities to file detailed outlook plans for their future energy mix with the Michigan Public Service Commission that would allow for comment from outside stakeholders.

However, being comprehensive plans, they also delve into a variety of other energy-related issues that are pitting business groups against utilities, such as modifications to the Retail Open Access law and net metering for rooftop solar installations.

Joshua Lunger, director of government affairs for the Grand Rapids Chamber, said while his group supports ending the renewable standard, the chamber is opposed to the proposals on electric choice and net metering.

On choice, Lunger said the Senate plan would effectively eliminate through attrition the opportunity for businesses to purchase energy from alternative suppliers.

Under Michigan law, only customers making up to 10 percent of a utility’s generating capacity can buy power elsewhere. Thousands of entities are on a waiting list to do so, while representatives from school districts and businesses have testified this year that the law, known as electric choice or deregulation, allows them to save thousands of dollars per year on utility bills.

“We want to preserve that,” Lunger said. The Senate plan would “slowly kill the choice market. Some say it will do it quickly. We don’t see how that’s going to help general ratepayers.”

Lunger also called a Senate plan “bad policy” that would replace net metering — where customers generate their own renewable energy and can be credited up to a certain amount for electricity they put back on the grid — with a system that requires self-generators to purchase power up front and sell it back at a lower rate.

“We think the state should be incentivizing clean energy,” Lunger said.

Despite P.A. 295 of 2008 leveling off at the end of the year and a projected electric capacity shortfall in coming years, Lunger said there “isn’t as much urgency” on getting a deal done on energy compared to, say, roads.

Nofs has said he hopes to debate the issues in S.B. 437 and S.B. 438 through the fall and hold a vote before the end of the session.


The business community has also been involved for several years in developing stronger standards for third-grade reading, a level that is widely viewed as an indicator of future success in school.

Gary Naeyaert, executive director of the Great Lakes Education Project, is pushing H.B. 4822 — sponsored by Ottawa County Republican Amanda Price, R-Park Township — which provides financial support to develop reading skills among struggling students and establishes a system to retain third graders if they are not meeting reading levels.

He said there has been a years-long effort to improve reading levels among young Michigan students.

“Over the last 12 years, reading proficiency in Michigan has gone down when it has been increasing in nearly every other state in the country,” he said.

Earlier efforts to adopt a policy were criticized as “pass or flunk” legislation that didn’t have a robust system for early intervention before retaining students in third grade. Other critics called it an expensive intervention that was only treating the symptom of a deeper problem in the state’s education system.

Allie Bush, director of government affairs for the Grand Rapids Chamber, said her group’s support of the legislation is based on the need for better workforce development.

“We have an astronomical problem with third-grade readers’ ability to read, or the lack thereof,” she said, citing the declining student proficiency over the past three years. “It is mind-blowing to see how important this is for students if we’re going to have a strong economy in the future.”


The Michigan Chamber of Commerce also is working on two less-noticeable issues: reforming the way the state sets administrative rules for environmental regulations and how the state Department of Treasury deals with unclaimed properties.

Jason Geer, director of energy and environmental policy for the state chamber, said there is a lack of oversight on new administrative rules that are developed by the Michigan Department of Environmental Quality.

“During the Granholm administration, it was a nightmare. Michigan had a reputation for having a department that was out of control,” Geer said.

The Michigan Chamber is hoping to establish an oversight board made up of a variety of stakeholders with environmental, industrial and commercial interests who can vote up or down on rules proposed by the department.

Without such oversight, environmental rules can “pendulum swing” based on the administration in office, Geer said.

“Instead of that, we could have consistent environmental regulations that are bipartisan and very cooperative,” he said.

Geer said he hopes legislation addressing the issue is introduced before the end of the year.


The statewide group is also pushing for changes in the unclaimed property process, something that “happens more on a day-to-day basis with the Department of Treasury,” said Tricia Kinley, senior director of tax and regulatory reform at the Michigan Chamber.

For the past several years, the chamber has sought reforms during the audits and appeals processes of unclaimed or supposed abandoned property, when the state becomes the legal custodian, Kinley said.

“For businesses that might have both individual customers and other business customers, the compliance with those laws is a huge burden,” Kinley said.

In the past few years, the chamber has been successful in establishing an informal appeals process with the state, Kinley said. Now it is pushing for new legislation or administrative rules that would shorten audit periods and diminish the financial threshold that would subject businesses to audits.

Recently and as a general trend around the country, “state treasury departments tend to look at so-called unclaimed property as a revenue source,” Kinley said of potential obstacles.

“We hope to see some legislation introduced in the next few weeks,” she said.


Outside the Legislature, the Michigan Chamber vocally opposes two ballot initiatives that are in the process of gathering signatures.

In May, the Committee to Ban Fracking launched a campaign for a statewide ban on horizontal fracturing and storing fracking waste.

The committee has until Nov. 11 to collect the just over 250,000 signatures required for the November 2016 election. The plan is backed by the statewide chapter of the Sierra Club.

In response, Michigan Chamber earlier this year launched a “decline to sign” campaign.

Chamber President and CEO Rich Studley called the group “environmental extremists” and said “the intended and unintended consequences of this ballot initiative would be very economically damaging to our state.”

The chamber has fought the group in the past over previous attempts to ban fracking in Michigan. The committee failed in 2012 and 2013 to gather enough signatures to get on the ballot.

The chamber is also vocal against a ballot initiative to raise Michigan’s Corporate Income Tax from 6 percent to 11 percent.

Backers of the proposal, supported financially by three building trades unions, say the additional revenue could be used to pay for roads and is a response to Snyder’s tax-shifting policies from his first term. If successful in gathering signatures, the question would also go before voters in November 2016 if no action is taken on it by the Legislature.

Earlier this month, Studley told MiBiz that the proposal to raise the tax by 83 percent is a “jobs killer,” particularly for the one-third of Michigan businesses that pay the tax.

“It’s an effort to turn back the clock, a redo on the last two campaigns for governor,” Studley said at the time. “It’s a complete lack of understanding of economic competitiveness and how Michigan compares to other states. It’s an incredible example of the construction industry biting the hand that feeds it — that’s why part of our message here is to not feed the alligators.”

Read 2645 times Last modified on Monday, 28 September 2015 10:30

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