(Source: MIRS.news, Published 01/25/2023) A year-end supplemental spending bill that is being used to steer $200 million toward what is described as the largest private sector investment in Upper Peninsula history was sent to a joint House-Senate conference committee Wednesday morning.
The plan with SB 7 is for the six-member conference committee to adopt a report as soon as 9:30 a.m. Thursday so both chambers can vote on it later in the day and send it to the Governor.
If signed into law this week or next, SB 7 would be the quickest bill to be signed into law to start a two-year session in 76 years. The House passed a zeroed-out version of the bill Tuesday night, a procedural step needed to move it into conference as soon as possible.
The legislation was so pressing, Rep. Joey Andrews (D-St. Joseph) agreed to travel to Lansing to cast the necessary 56th vote despite his wife having given birth to their first child hours earlier.
On its face, the Senate Appropriations Committee Chair Sarah Anthony (D-Lansing) bill is a procedural book closing bill stuffed with transfers and assorted spending needed to make the state's books balance. Michigan is legally required to close its books for Fiscal Year (FY) 2022 by the end of March.
Still, whether this housecleaning-type measure is passed this week or in two weeks isn't as pressing as the real reason for its hasty trip through the Legislature.
An international company committed last year to drop $1.2 billion into an Escanaba-area papermill project as long as it comes with a $200 million state investment, according to numerous sources.
The initial plan was to put the money into the fall supplemental, which included $840 million into the Strategic Outreach and Attraction Reserve (SOAR) fund, for such things as the Gotion battery plant in Big Rapids. It didn't happen, for several reasons.
The money was supposed to be in a year-end, 2022 supplemental passed in December, but then lame duck fell apart after the Governor said no to a tax cut Rep. Matt Hall (R-Kalamazoo) wanted.
Now, this company is under "significant constraints" by its investors to fish or cut bait with the project, MIRS has learned. The company is publicly traded and the rules in its country are such that nothing can be said publicly about it until all the funding is squared away.
If the money isn't appropriated soon by the Legislature, the project could fall apart.
All told, the investment is $1.06 billion. Its focus will be on paperboard and carton paper, the market for which is expected to rise 40% over the next 10 years due to the increase in e-commerce.
The project is being framed as "generational" in that it would keep more than 800 direct jobs in the region. Assisting the largest manufacturer north of Midland also comes with potential infrastructure upgrades, energy reduction technology and community philanthropy.
Business groups, labor unions and higher education institutions are all on board.
The reason for the conference committee approach to the supplemental spending bill is to prevent proposed amendments from gumming up the works. Used in past cycles for appropriations bills, in particular, a conference report can only be voted up or down by the House and Senate. No amendments are allowed.
If a bill that moves through conference committee is voted down in either chamber, the committee is given a second chance to present a report the House and Senate would accept. If that, too, is voted down, the bill dies.
When it's rolled out in the conference committee, the supplemental is expected to include another generic SOAR deposit for some unknown future economic development initiative. The bill also is being loaded up with $100 million for the "missing middle" program to help developers create new housing for working-class folks who don't qualify for Section 8 housing, MIRS has learned.
There's also money for the Revitalization and Placement program (RAP) to address COVID impacts in Michigan cities and communities, small business relief, water shutoff prevention in Detroit, a statewide blight/land bank redevelopment program and a statewide apprenticeship expansion.
Still, some Democratic legislators have some heartburn. What are they getting out of this? Is the Governor dictating spending priorities to a fresh crop of legislators before they can get their feet under them?
If House Democrats don't have all 56 members on board, what is the asking price for Republicans to sign on? Having the Democrats commit to not killing the trigger for the expected income tax rate rollback may not be enough.
In the Senate Wednesday, Sen. Thomas Albert (R-Lowell) offered an amendment that would include measures to lower the state's income tax rate to 4.1% if the rate that is projected to be automatically triggered is not lower. It would also place $500 million into the state's "Rainy Day" fund to offset pending risks from "a very likely economic downturn," and would dedicate $2.75 billion of the state's $9 billion to debt rejection.
The debt rejection item of Albert's amendment would infuse $1 billion into the state's debt maturity payoff fund to cover state obligations early on, and an additional $750 million for the local unit municipal pension principal payment grant account.
Albert said his amendment would increase the personal exemption for single filers to $10,000 and $20,000 for joint filers as well when it came to retirement incomes for 65 year-olds.
"It is unfortunate that I am forced to offer this substitute at this time and in this manner, but the approach by the majority has left me no choice. Their approach is unreadable. It disrespects the taxpayers and the people in Michigan who pay the state's bills, and they're making it very difficult for the public to understand what is really going on," Albert said. "It now comes in an attempt to send this bill to a conference committee where decisions will be made by very few and in a format that cannot be amended in any way."
The amendment was denied.
Anthony and Sens. Jon Bumstead (R-North Muskegon) and Sean McCann (D-Kalamazoo), the minority and majority vice chairs of Senate Appropriations were appointed Wednesday as the three Senate conferees.
The last time a bill was signed into law in the first month of session was in 1947 when a bill standardizing municipal elections was signed on Jan. 23 by then-Gov. Kim Sigler.
