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Uneventful Lame Duck Ends With Failed Supplemental Deal

December 13, 2022

Article courtesy MIRS News for SBAM’s Lansing Watchdog e-newsletter

The weakest lame duck in at least 20 years ended after a mere two active session days Wednesday evening and the collapse of a deal that would have greenlighted $200 million for an Upper Peninsula economic development project in exchange for a niche business tax cut.

The lame duck ends with the possibility of numerous bills being vetoed because the legislature left without passing the governor’s top priority — moving the presidential primary to coincide with the Democratic National Committee’s new Michigan primary date of Feb. 27.

The governor’s office hoped the Republican-led legislature would sign off on an additional Strategic Outreach and Attraction Reserve Fund (SOAR) allocation for a yet-to-be-announced paper mill project in Delta County.

But in exchange, the Republicans wanted the governor to sign off on a pair of bills that would have stopped the Department of Treasury from collecting sales taxes on service deliveries and installations.

“We had an agreement on that and then, about an hour later, the governor reneged and backed out of the deal, so we’re not going to see a supplemental,” said Rep. Matt Hall (R-Comstock Township), who was negotiating behind the scenes. Hall will be the House Minority leader next session.

From the governor’s perspective, she wasn’t going to agree to legislation that would have been an on-going $60 million revenue hit and would have interfered with ongoing litigation.

Sen. Curtis Hertel (D-East Lansing) called the charge that Whitmer blew up the deal a “ridiculous misrepresentation of what happened.”

“At no point was there anything that was presented to my caucus that, in no way, that was acceptable either,” he said. “The governor and my caucus can probably get a better deal for the people of Michigan in a matter of three weeks.”

The supplemental would have been limited to the paper mill project, some book closing items and a few other odds and ends. The House and Senate scheduled a 12:30 a.m. Thursday morning conference committee to substitute out an old appropriations bill and make the supplemental happen. It was canceled by 10:30 p.m.

Rep. Beau LaFave (R-Iron Mountain) said the loss of the deal will cost the Upper Peninsula 650-700 jobs and $1 billion in outside economic development if it doesn’t come to pass. 

“These were stable, well-paying jobs that would have helped Yoopers at a time when inflation is rampant, and folks are already struggling to make ends meeting,” LaFave said. “Big Gretch the Grinch struck again.”

Senate Appropriations Committee Chair Jim Stamas (R-Midland) didn’t assign blame to things falling apart, telling reporters, “We went back and forth on different items and it just didn’t work out.”

The Senate adjourned shortly after 11 p.m. The House adjourned at 1 a.m. 

The collapsed deal was an encapsulation of a lame duck session highlighted by a lot of farewell speeches, some dogs and cats and no substantial policy changes. Nine senators, including Senate Minority Leader Jim Ananich (D-Flint), left session prior to the final adjournment. At least five of them were either in Hawaii or on their way to the islands for a Council of State Governments conference.

By the time the last vote was on the board in the House, 97 of 110 House members were still around. 

“I think lame duck kind of went out like a lamb instead of a lion, but that’s to be expected with a changeover in power and a lot more can hopefully happen next year,” Hertel said.

Despite legislative Republicans being pushed out of the majority Jan. 1 for the first time in 40 years, Senate Majority Leader Mike Shirkey (R-Clarklake) never seemed completely engaged in seriously making deals happen on the way out the door.

Last week, he allowed his alleged No. 1 legislative priority in lame duck to fail in his own chamber by five votes. Wednesday, he gave a speech that warned about the coming of a new world order.

The House and Senate agreed to adjourn sine die on Dec. 28, which will officially end the session.

The only item Gov. Gretchen Whitmer truly wanted out of lame duck was the movement of the presidential primary to the last Tuesday in February and the Republicans declined to do that, saying she didn’t offer an exchange that they considered a top priority. 

Because of that, MIRS has learned Whitmer may veto several bills that did pass in lame duck.

The only piece of news provided to a Capitol Press Corps starving for any content came at 10:45 p.m. when Hall told the press the supplemental fell apart over HB 5080, a Rep. Pat Outman (R-Six Lakes) bill dealing with sales tax on delivery and installation services.

Currently, customers who pay for delivery and installation at the same time they buy goods in Michigan end up paying sales taxes on the entire amount. But if they pay for delivery and installation separately, sales taxes aren’t applied.

“We don’t have a service tax in Michigan and now these businesses are having to jump through these hoops and battle in the Tax Tribunal,” Outman said.

$60M Muskegon Pipeline Gets Final OK; Gotion Money Stalls

A $60 million wastewater pipeline connecting agribusinesses in Coopersville with a Muskegon treatment plant received its final signoff from the House Appropriations Committee Wednesday, 23-3.

The Strategic Outreach and Attraction Reserve Fund (SOAR) is being used to pay for a project that Rep. Greg VanWoerkom (R-Norton Shores) said has been talked about in West Michigan for years. When an old Delphi plant was turned into an agri-business plant, business exploded to the point where the local wastewater treatment facility couldn’t handle the effluent.

The Coopersville community was tapped out on its ability to bond out for any more money to expand the wastewater plant so expanded development was at a standstill.

VanWoerkom and Rep. Bradley Slagh (R-Zeeland) said they’d been working on making a pipeline to Muskegon happen for years, but could never find funding to support it.

“This is groundwork. This is not money to a new business. This is pumping dollars into the ground setting up the facilities to expand,” Slagh said. “It’s doing the right stuff and letting business grow.”

The legislative transfer received no votes from Reps. Sue Allor (R-Wolverine), Pamela Hornberger (R-Chesterfield Twp.) and Jeff Yaroch (R-Richmond). It previously received the OK from the Senate Appropriations Committee, allowing the project to go forward.

The appropriations committees did not take up the $175 million SOAR allocations for Chinese-owned Gotion, Inc., which is allegedly building a $2.63 billion manufacturing facility in Big Rapids. The plant is slated to produce the precursor materials for electric vehicles and energy storage systems.

However, the project received heavy skepticism from some Republicans, who questioned the wisdom of throwing money at a foreign-owned company.

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