Published in Economic Development

Crystal Ball 2019 Michigan Policy Outlook: Amid new political dynamic, business groups focus on talent, road funding

BY Sunday, December 23, 2018 03:38pm

 

Michigan business groups say a transition of executive power from a Republican to a Democrat brings policy uncertainty, but they expect a continued focus from Gov.-elect Gretchen Whitmer on at least two topics: road funding and talent.

Gilda Jacobs COURTESY PHOTO

After all, Whitmer spent much of her campaign promising to “fix the damn roads.”

Yet business groups also say they’re optimistic about working with the Whitmer administration based on her experience in the state House and Senate.

“We’ve dealt with her experience before, that’s a plus,” said Charlie Owens, state director for the National Federation of Independent Businesses. Whitmer spent 14 years in the House and Senate, most recently serving as Senate Minority Leader while Democrats were at a major disadvantage.

“I think there are areas where we can find common ground,” Owens said.

Overall, business advocates remain unsure about the extent to which they’ll play offense or defense on their issues. Here’s a few policy issues they’ll be watching in 2019.

Road funding

Despite a road funding plan under Gov. Rick Snyder that brought in $800 million this year under new registration fees, gas taxes and a $175 million capital infusion, Whitmer and others agree more needs to be done.

During the campaign, Whitmer floated plans for $2 billion annually for infrastructure funding that could be matched with $1 billion in federal funding. In the lead-up to the election, her campaign said that could come partly from user fees as well as bonds while creating up to 72,000 jobs.

For now, though, it’s uncertain what deals Whitmer may strike with the Legislature, which will also have more Democrats next year.

Wendy Block, vice president of business advocacy with the Michigan Chamber of Commerce, told MiBiz last month that “we can agree with (Whitmer) on the roads issue, especially when it comes to legislation. We might have some areas of disagreement, but we’re staying focused on the positives now.”

Talent and education

Business and public policy advocates agree that Michigan’s educational outcomes and talent pool are lagging. Although the Snyder administration has built up skilled trades funding for people who don’t seek a college degree, most policy advocates say more could be done.

“Our members are screaming about not being able to find qualified people,” Owens said.

Gilda Jacobs, president and CEO of the Michigan League for Public Policy, says the talent issue begins in early childhood.

“If we’re going to bring people into our state and they want to start families, we need to be able to provide school systems that address the long-term needs of students,” she said. “We want to be sure everyone has the opportunity to have a good education in our state — we really don’t have that now.”

While business groups back an A-F grading system for schools, a plan that narrowly cleared the state Legislature on Dec. 18 and has Snyder’s support, Jacobs said public school funding “needs a re-tuning.”

“We really do need to step back and ask what we are doing wrong,” she said.

Even before that, Jacobs said there needs to be an increased focus on providing quality child care.

“We look at health and human services and education as cradle-to-career,” Jacobs said.

Andy Johnston, vice president of government and corporate affairs with the Grand Rapids Area Chamber of Commerce, said recently that “talent is a must” in working with the Whitmer administration. He hopes the Launch Michigan campaign — a broad coalition of business, labor, advocates and education experts — plays a “big role in how education policy is shaped” in the next session.

“We need to continue to address the failing of our educational outcomes,” he said. “We need a long-term strategy for Michigan.”

Tax reform

Jacobs said one of the Michigan League for Public Policy’s top priorities is rebuilding the earned income tax credit that was scaled back under Snyder.

“That tax credit helps working families keep more money that they pour back into local economies,” Jacobs said. “We see this as a win-win.”

Owens, meanwhile, is concerned about the potential revival of discussions from the campaign trail and years past around the corporate income tax and “businesses paying their fair share of taxes.”

“Whether it morphs into a policy discussion remains to be seen,” he said.

Paid sick leave, minimum wage not over

Perhaps Snyder’s most controversial action during lame duck (as of press time) was his decision to sign bills that drastically scale back paid sick leave and minimum wage laws. 

After campaigns collected the necessary signatures to include the proposal on November ballots, the legislature adopted the plans as law with the intent to amend them and drastically alter them. The move was praised by business groups.

However, opponents have vowed to challenge the legislature’s actions in court, saying they can’t adopt a law and amend it in the same session. Additionally, the group backing the paid sick leave initiative has vowed another initiative for 2020.

“We’ll try and take a defensive position on activity in that regard,” Owens said of efforts to revive paid sick leave or minimum wage.

Jacobs said she was “very disappointed both bills were gutted from the ballot proposal,” particularly because both issues polled well with the public. Under lawmakers’ changes, the minimum wage won’t increase to $12.05 an hour until 2030.

“Even if you have two minimum wage family members working, that’s still not enough to raise a family today,” Jacobs said. “Imagine another 12 years from now. I think they were short-sighted and anti-worker.”

Despite a combative lame-duck session that critics contend is a power grab by the GOP, the start of Whitmer’s term brings a sense of optimism.

“I’m very optimistic. (Whitmer) has a history of bridge building and working across the aisle,” said Jacobs, who served for 12 years in the state House and Senate. “Having their names on bills feeds legislators’ egos. They don’t want to be in a system where the governor is just vetoing bills all the time because the wrong party is sponsoring them. I think it’s a great opportunity to roll up their sleeves and get something done.” 

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