Honigman Capitol Report

House Rule regarding Budget Doesn’t Require Governor’s Approval

The Michigan House of Representatives passed HR 19, a measure that makes municipalities and educational institutions ineligible for earmarked funding if they do not comply with federal immigration enforcement. The rule passed in a 56-50 vote along party lines and does not require Governor Gretchen Whitmer's approval, as it is a rule change rather than legislation. The rule targets special project funding but does not affect constitutionally required revenue sharing. Republicans argue it addresses concerns about sanctuary jurisdictions undermining federal laws and creating state liabilities. Areas like East Lansing and Kent County, with policies requiring federal warrants for detentions, may be impacted. Democrats expressed concerns about the rule forcing local law enforcement to subsidize federal operations and creating funding uncertainties. The ACLU warned of potential unfunded mandates and resource prioritization challenges for municipalities. However, House Republicans clarified that the rule affects only budget earmarks, not statutory revenue sharing, with Speaker Matt Hall emphasizing that local governments should not rely on earmarks for essential funding.

Senate Passes 50% Tipped Wage

The Senate passed a bill last week to gradually increase the tipped wage for service industry workers to 50% of the minimum wage by 2031. The bill, SB 8, was passed 20-12, with most Democrats opposing it. Some Republicans also opposed the bill, while others were absent. The current tip credit system will remain at 38% this year, increasing by 2% annually until it reaches 50%. The bill was not taken up for immediate effect, and further discussions will be forthcoming in the House. Senate Democrats and Republicans expressed differing views, with some seeing it as a necessary compromise to support workers and businesses. House Speaker Matt Hall proposed the gradual increase as a bipartisan solution. The bill's passage is linked to broader legislative changes, including paid sick time requirements. Businesses with 10 or more employees will need to provide 72 hours of paid sick time, raising concerns among business associations about the impact on operations. Opposition groups argue the changes could lead to job losses and operational challenges. Meanwhile, advocates for eliminating the tipped wage system, like One Fair Wage, continue to push for full minimum wage for tipped workers, citing support from restaurant employees. The Supreme Court's July 2024 ruling mandates changes to Michigan's wage and sick time laws, originally proposed in 2018, to take effect on February 21, unless delayed.

Early Polling

A recent EPIC-MRA poll provides a detailed look at Michigan's political dynamics. Independent gubernatorial candidate Mike Duggan is polling at 23% statewide, trailing behind Democrat Jocelyn Benson and Republican Dick DeVos, who are both at 31%. DeVos was added as a high name ID test for Benson and Duggan. Duggan shows strong regional support, leading in Macomb County with 44%, compared to Benson's 21% and DeVos's 15%. In Oakland County, Duggan is slightly behind Benson, with 35% to her 36%. When considering Wayne, Oakland, and Macomb counties together, Duggan leads with 42%, while Benson has 31% and DeVos 13%. However, Duggan's numbers are lower in West Michigan and the Bay Region, where he polls at 8%, and Up North, where he is at 9%. In a hypothetical U.S. Senate race, Republican Mike Rogers leads Democrat Pete Buttigieg 47% to 43%, with 13% of voters undecided. Rogers has a 31% favorable and 27% unfavorable rating, while Buttigieg is viewed favorably by 34% and unfavorably by 25%. In other polling, President Trump's job approval rating is 45% excellent/good and 50% fair/poor. Meanwhile, Governor Gretchen Whitmer maintains a 52% favorable rating, consistent over the past four years.

Looking Ahead

The Michigan House of Representatives has established a new oversight committee granting it subpoena powers to investigate a range of different policy areas. Previous legislative terms have seen policy committees bring companies before them to ask tough questions about business practices, or justifications of state incentives. However, this committee appears to have a heightened interest in scrutinizing a range of areas. Specifically, the Corporate Subsidies and State Investments Subcommittee has the potential of being the most controversial for business interests across the state this term. Based on subcommittee members’ history of votes and comments on economic development and incentive legislation, there will be specific inquiries into how these incentives were awarded and benefited companies across the state, along with comparing their intended outcomes versus realized outcomes. No equivalent committee with subpoena powers exists in the Senate.

House Oversight Committee Subcommittees:
Weaponization of State Government
Child Welfare System
Corporate Subsidies and State Investments
Public Health and Food Security
Homeland Security and Foreign Influence
State and Local Public Assistance Programs