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Published in Economic Development
Gov. Gretchen Whitmer Gov. Gretchen Whitmer COURTESY PHOTO

Whitmer, GOP legislature compete over COVID relief funding

BY Sunday, January 31, 2021 04:32pm

Gov. Gretchen Whitmer and Republican lawmakers are squaring off over multi-billion-dollar COVID-19 spending plans that would bolster a vaccine rollout, K-12 schools preparedness and crucial business support.

Whitmer unveiled her $5.6 billion Michigan COVID Recovery Plan on Jan. 19, which includes $90 million to distribute COVID-19 vaccines and $225 million to fund three new programs through the Michigan Economic Development Corp. The MEDC programs would include grants and low-interest loans for restaurants and other “place-based businesses,” companies with fewer than nine employees, and high-tech startups.

Whitmer’s plan also calls for reinstating the Good Jobs for Michigan tax incentive program and calls on lawmakers to permanently extend unemployment insurance benefits from 20 to 26 weeks.

The governor’s plan brought swift criticism followed by a Jan. 27 counter-proposal from state Rep. Thomas Albert, R-Lowell, who chairs the House Appropriations Committee. Multiple statewide business groups were quick to back Albert’s $3.5 billion plan, which includes $415 million in grants for businesses directly affected by state shutdown orders, a $150 million deposit into the state’s unemployment trust fund to offset fraudulent claims last year, and $38.5 million to reimburse fees for liquor license and health department inspections. 

Both plans include funding to assist business owners facing penalties and interest on unpaid 2020 property taxes.

“House Republicans are going after direct and immediate urgent needs within the sectors of the business community that were most negatively impacted by the government orders,” Small Business Association of Michigan President Brian Calley told MiBiz. “They do a really nice job at zeroing in on and sending a message to these businesses that are struggling the most that we want you to survive.”

Calley, the former Republican lieutenant governor under Gov. Rick Snyder, added that the GOP plan goes further with $22 million in property tax relief — a measure business groups have called for since last summer and that Whitmer vetoed twice in related bills.

“That was a really big deal,” Calley said of the House’s property tax proposal. The GOP plan also has support from the state chapter of the National Federation of Independent Business and the Michigan Manufacturers Association.

Daylight or similarities?

In an interview with MiBiz last week, Albert said his plan differs from Whitmer’s primarily in how they target business relief.

“Instead of trying to help people start their lives over, we’re trying to help them before their lives come to an end,” Albert said. “The governor’s plan is more about increasing funding to government-run programming and creating new college-level jobs — which is fine, but with the specific crisis we’re in, thousands of small businesses are holding on by a thread.”

Michigan Economic Development Corp. President and CEO Mark Burton said in an emailed statement that it “remains imperative that we set a course for economic recovery to build on the foundation of nearly $240 million in small business relief the organization has already deployed statewide.”

The business-related initiatives in Whitmer’s plan, including passing legislation reinstating the Good Jobs for Michigan program, “will help stabilize, recover and ultimately grow the economy here in Michigan.”

Both spending plans primarily rely on federal COVID-19 relief funding that has been distributed to states but is subject to legislative approval.

While introducing her plan last month, Whitmer focused on the message that jumpstarting the economy would first require getting COVID-19 under control. Her plan also drew support from Business Leaders for Michigan, which is now under the leadership of Jeff Donofrio, who previously led the state Department of Labor and Economic Opportunity under Whitmer.

Gilda Jacobs, president and CEO of the Michigan League for Public Policy, sees the two plans as “very similar in many ways. All Democrats and all Republicans want to get everyone vaccinated as best they can, and everyone gets that it’s a health issue and an economic issue. If everyone gets vaccinated, the economy will become more robust.”

Jacobs didn’t draw much distinction between direct grants for businesses and job training initiatives.

“It’s a both-and situation — I think you really need to do both,” Jacobs said, noting there’s likely to be additional federal stimulus funds flowing to states under the Biden administration.

“By getting people trained differently and upskilled and providing an opportunity to have better paying jobs … it’s a win-win for everybody, particularly for small businesses,” said Jacobs, a former Democratic lawmaker who agrees with Whitmer that permanently expanding unemployment benefits to 26 weeks “is an imperative.”

Calley said he doesn’t see business grants and job training funding as “mutually exclusive.”

“When it comes to the short-term survivability of a business, job training only matters if the business still exists to employ people in the first place,” he said. “We have to think about the long term, but we also have to think of the short term.”

“They’re taking different approaches, for sure,” Calley added of the two plans. “These are both very new proposals that have been on the table.”

The latest differences over the current year budget supplemental are likely to play out over the coming weeks.

“We’ll take it one day at a time,” Albert said, noting likely collaboration with Senate Republicans. “We hope to have something on the governor’s desk in the near future.”

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