(Source: MIRS.news, Published 06/05/23) The relationship between Michigan's business associations and the Legislature's Democratic majorities could become more frigid as workforce and regulatory reforms go beyond the expected.
The repeal of Michigan's "Right to Work" policy, which prohibited workers from being required to pay union dues or fees in exchange for the benefits of having a bargaining representative, was expected.
What may not have been anticipated is Senate Democrats voting to repeal Michigan's nearly 5-year-old "No Stricter Than Federal" statute for environmental regulations (SB 14), and the House Labor Committee taking testimony on penalizing employers for misclassifying an employee as an "independent contractor" (HB 4390).
SB 14 and HB 4390 are two of more than 20 bills introduced, mostly by Democrats, that have been flagged as areas of concern by the Michigan Chamber of Commerce, the Detroit Regional Chamber, the Small Business Association of Michigan (SBAM), the Michigan Manufacturers Association (MMA) and others.
In terms of politics, pundits have detailed how, during the 2022 elections, business-class donors strayed away from their Republican circles, turned off by the party's latest focus on "red meat" issues and former President Donald Trump.
But today, the House Republican Campaign Committee (HRCC) announced that former Gov. Rick Snyder – whose administration signed off on the "Right to Work" policy and the "No Stricter Than Federal" ban – will lead the caucus' fundraising efforts in the 2024 election cycle, alongside one of his past top contributors, business executive William Parfet.
"Anybody who is growth-minded will be stymied, slowed down or maybe stopped by additional regulatory burden," said Brian Calley, SBAM's chief executive officer and president, to MIRS. "Stability and predictability are powerful forces for economic growth. A lot of times in government, people want to tinker. They want to be able to change something so they can take credit for something happening."
During last week's 2023 Mackinac Policy Conference, Calley steered MIRS to the SBAM Foundation's 2022 scorecard, which showed that from January 2020 to early February 2022, Michigan small business openings outperformed national statistics 8.5% to 3.1%. The positive change to small business revenue in Michigan was 24.2% compared to 8% nationally over the same time.
The presence of Michigan startups receiving venture capital grew by 56% while the overall Great Lakes Region experienced 27% growth in the last five years. The report also clarified that in 2021, Michigan business bankruptcy rates "were the lowest in 20 years."
Simultaneously, as Calley highlighted the 2021-22 legislative term as being a period of more businesses surviving into maturity and more business startups, the same term had the fewest public acts signed into law than any other two-year calendar in the 58-year-old full-time legislative era.
Overall, Calley said it was absolutely a good thing that Michigan's last Legislature did not meet as much from 2021 through 2022, when Democratic Gov. Gretchen WHITMER held her post alongside a Republican-led Senate and House.
"Keeping things stable and predictable is a powerful economic development tool," he said. "When the government wasn't making big sweeping changes, entrepreneurs found a lot of success."
On May 15, SBAM and the organizations mentioned earlier wrote a letter to the four legislative leaders regarding bills they were worried about.
-HB 4035 prohibits an employer in certain professions from retaliating against an employee who requests work schedule changes.
-HB 4237 repeals a 2015 statute that restricts local governments' ability to place special pay or benefit requirements on businesses.
-SB 26 allows for air pollution administrative fines to be redirected from the General Fund and into a special account for air quality mitigation grants.
"We need to make sure that businesses who are coming to Michigan, or are currently in Michigan, know that the policy that they're getting from the state is going to be consistent year over year, governor-to-governor and legislature-to-legislature," said Brad WILLIAMS, the Detroit Regional Chamber's vice president of government affairs, to MIRS.
During this year's Mackinac Policy Conference, Williams described to MIRS how, from an economic development or regulatory perspective, one tends to see a lot of policies change overnight when a new party takes over a position of power every eight years.
"That's not particularly healthy for anyone," Williams said. "While yes, we would like to see a more friendly regulatory environment, consistency is really, really the key to all of this."
Ultimately, when asked if Michigan has a predictability problem when it comes to conserving and advancing the business community, Williams said the state "could," if "we don't start tapping the brakes a little bit from a policy perspective."
MMA President and CEO John Walsh told MIRS that uncertainty leads to a lack of investment, indicating how, on a positive note, his association's members have been pleased with the bipartisan focus on career training and would like to see attention zoom in on making the permitting process more predictable.
For example, Walsh cited how one business looking to invest in the Upper Peninsula waited 10 years to learn if they were approved for a metallic minerals mining permit by the state's Department of Environment, Great Lakes, and Energy (EGLE) – a lengthy time period that stakeholders allegedly did not know they were going to face.
"If the time is set, and you know you're going to get 'yes' or 'no,' that allows you as a business person to make a decision," Walsh said. "If we're perpetually waiting for an answer, or we're spending on more and more experts to make our case because we keep getting delayed … well, all right, now we're back to uncertainty and have a desire to look elsewhere."
Other bills flagged in the letter consist of:
- SB 271, SB 272, SB 274, SB 275, and SB 276, which are part of Senate Democrats' "Clean Energy Future Plan" package requiring utilities in the state to demonstrate progress toward closing down all coal-fired plants by 2030 and obtaining a 100% clean energy standard by 2035 when filing for rate changes.
- SB 139, mandating freight or work trains in Michigan be no longer than 7,500 feet, with railroads at risk of a $5,000 civil fine if they violate the rule.
- HB 4399, HB 4400, HB 4401 and HB 4406. The bills are part of House Democrats' legislation dealing with independent contractors and would ban employers from imposing noncompete agreements under certain agreements and would increase wage disclosure requirements for employers between "similarly situated employees."
- SB 228 and HB 4359, aiming to revoke the ban on local governments from adopting ordinances that outlawed or placed extra fees on plastic bags and other disposable containers.
- SB 19 by Republican Sen. Ed McBroom (R-Waucedah Twp.), creating an outlet where property tax disputes can be overseen by a county board of revision, as opposed to exclusively being handled by the Michigan Tax Tribunal. McBroom's SB 20 was also listed, as it would require county commissioners to design a board of revision, which would deal with property tax matters for sites with an estimated assessed value of $600,000 or more.
- HB 4235, allowing union members to write off union dues on their state income tax.
In August 2022, Data for Progress released a poll finding that out of 701 likely voters in Michigan, 37% were very concerned and 29% were somewhat concerned about climate change. The report additionally found that 66% of likely voters were interested in seeing Michigan produce more energy from clean energy sources and 61% thought state leaders should do more to address air pollution.
