Legislative Report as of 3/24/2020
Michigan policy makers are 100% focused on the Coronavirus pandemic, as officials are scrambling to deal with the rapid spread of the disease. Governor Whitmer has issued multiple executive orders ranging from school closures, prohibitions on price gouging, restrictions on public gatherings, and – most recently – a Stay Home, Stay Safe order requiring all Michigan residents to shelter at home unless they are “essential employees” or are obtaining personal needs like food, supplies, medication or medical treatment. The Michigan Legislature responded last week with a $75 million response package aimed at increasing Michigan’s preparedness for the impact of the increasing spread of the illness.
The US has not dealt with an epidemic like this since the 1918 influenza outbreak, and nothing has impacted the entire nation so heavily and dramatically since World War II. Governor Whitmer describes the process of responding to the crisis as “building the airplane while flying.” It is expected that the benefits of social distancing and keeping people at home as much as possible will not be felt for another few weeks. Therefore, the number of positive cases are expected to continue to rise dramatically well into April. Hopefully they will then begin to subside, but it is possible our health care capacity will be stretched to the breaking point before then. Therefore it is hugely important to minimize the spread of the disease as much as possible.
Legislature Essentially Shuts Down, Working Remotely
On March 17, the Michigan House and Senate convened at what many expected to be the last day of session for several weeks. Surprisingly, House and Senate leaders indicated that they planned to continue having legislative session one day each week to address issues related to the Coronavirus pandemic. That plan changed on March 23 when the Michigan House and Senate announced that there would be no session this week. It is as yet unclear how they will proceed, since several issues still need to be addressed.
The most pertinent issue outstanding is how to deal with the rest of the school year. The Michigan Department of Education has stated that current law does not allow them to count closure days due to the Governor’s order as “classroom time.” This means that the Legislature will need to pass an amendment to state statute so that students are not required to make up these lost days over the summer. This is similar to what the Legislature did last year after the “Polar Vortex” caused a much higher than normal number of school closings.
The other issues that will need to be addressed by the Legislature soon are the emergency executive orders issued by Governor Whitmer. Under the Michigan Constitution, none of these emergency orders can last more than 28 days. After that period, the Legislature must take action to either continue the effect of the order or amend it. If no action is taken, the order expires and ceases to be in effect.
While there are no session days or committee hearings currently scheduled, Michigan lawmakers are continuing to hold individual discussions with interested parties over a broad range of issues. While most of these
discussions are related to the pandemic, members of the House and Senate Appropriations Committees are continuing to analyze the Governor’s budget proposal and prepare their responses. Since no formal meetings are taking place, there will likely need to be an alteration in House and Senate rules to allow for teleconferencing or other ways of meeting remotely that will adhere to the standards of the Open Meetings Act.
State Employees on Front Line of COVID-19 Battle Deserve Workers Compensation Protections
As most Michigan residents have been ordered to stay home, many state workers are finding out just how “essential” they are. Examples include workers in the unemployment office who are fielding a deluge of new claims, Attorney General staff fighting against price gouging, child care licensing officials trying to ensure hastily created day care centers are safe, and employees in 24/7 facilities like our prisons and mental health hospitals who are literally fighting on the front line of a pandemic. Tens of thousands of state workers are absolutely essential to making sure that the damage from this crisis is as limited as possible, and they are taking great risks to do so.
In recognition of the risks “essential personnel” are taking, the Department of Labor and Economic Growth issued emergency rules on Workers Disability Compensation on March 18. These rules provide that “first response” workers (including health care, law enforcement, and first responders) have access to workers compensation benefits if they become sick with the COVID-19 disease, or if they are required to be quarantined due to exposure to the virus. Now that the Governor’s Stay Home, Stay Safe order has identified numerous other classifications of workers that are also “essential,” labor organizations including MAGE are calling for those workers compensation benefits be expanded to all workers classified as necessary to protect “critical infrastructure.”
Any employee, public or private, whose employer is requiring them to work because they are “essential” should be protected by having workers compensation benefits applied should they become ill from this pandemic. We are hopeful that the Department of Labor and Economic Growth will update their emergency rules accordingly.
Budget Talks on Hold due to Coronavirus; Economic Fallout Requires New Revenue Estimates
A lifetime ago, back in January, the State Revenue Estimating Conference predicted modest growth in state tax collections for the upcoming year. The economy was seeing the same steady growth it had experienced for the last eight years, and there was no reason to expect that such growth would not continue for another year. The prediction was that Michigan General Fund revenues would climb by over $200 million in 2020, and by nearly $300 million in 2021.
Those predictions are officially out the window.
The major question being asked by most economists is whether or not the impact from the Coronavirus pandemic will result in a recession or a full blown depression. In either case, the next Revenue Estimating Conference scheduled for May will almost certainly show vastly lowered expectations of state tax income for 2020 and beyond. That could mean another round of serious budget issues similar to what the state faced in 2008 and 2009.
One piece of good news should we find ourselves in such a budget crunch again is that the Legislature has attempted to dedicate over the past few years an increasingly large amount of the state’s General Fund to road and bridge construction. Two years ago, the Legislature sent over $300 million in General Fund dollars to pay for roads. During last year’s budget process, the Legislature’s proposal was an even higher amount, but that proposal was eventually vetoed by Governor Whitmer. Nonetheless, should Michigan lawmakers be faced with a budget crisis going into the next fiscal year, they may find it easier to abandon their effort to spend badly needed General Fund dollars on roads and use it instead to shore up badly needed services.
The economic downturn will also no doubt affect pension funds much the same way the housing crisis did over a decade ago. The state will likely need to set aside further dollars to maintain retirement funds in order to make up for market losses. Sadly, there will be no such requirement to make state workers whole whose Defined Contribution plans were savaged by the crash.
Although the Legislature is for the most part shuttered for the foreseeable future, members of the House and Senate Appropriations committees are still hoping to put together a budget by June. However, it’s impossible to know how long that process could end up being delayed, especially since the economic damage from this epidemic is guaranteed to make their choices much more difficult.
Whistleblower Protection Bill Passes Senate
Legislation introduced in December that seeks to protect State of Michigan employees from repercussions for any conversations they have with members of the Michigan House or Senate has passed the Senate unanimously. Introduced by Senator Tom Barrett (R-Grand Ledge), Senate Bill 686 would prohibit a department or agency of the state from taking disciplinary action against an employee because the employee communicated with a member of the House or Senate, or a member’s staff. Such protections have existed in appropriations boilerplate language for several years, but they have routinely been removed or ignored by the executive branch.
The bill, if signed into law, would provide a level of protection for state employees who communicate with lawmakers about state issues, even if such communication is frowned upon by their superiors. The bill would not apply to communication that is specifically prohibited by law (e.g. violating the privacy rights of a Medicaid patient). The bill passed the Senate on February 26 and has been referred to the House Oversight Committee.