Review our new Government Relations Update - Caucus Call: Lansing

Peter J. Langley
Week of March 21, 2022

Caucus Call Lansing

This Week's Updates

The Michigan House and Senate will be in session Tuesday, Wednesday and Thursday this week. They will not be in session the following two weeks, so Caucus Call will not be published during that time.

Governor Vetoes Tax Cut Bills

  • Who needs to know: Individuals and business owners doing tax preparation
  • Potential impact: Two bills that would have cut the Michigan income and gas taxes were vetoed by the Gov. Gretchen Whitmer last week.

Whitmer vetoed two bills sent to her by the Republican led legislature last week. One bill would have reduced the income tax from 4.25% to 3.9%, as well as given families a $500 per child tax credit and reduced tax on retirement income. The other bill would temporarily pause the state taxes on gas and diesel fuel. Both measures were touted as ways to combat increased inflation and to put money back into the hands of Michigan’s citizens. Neither measure was negotiated with the administration. In her veto messages, Whitmer cited the potential for budget shortfalls in future years and irresponsible cuts that would be necessary to meet the budget demands.

As expected, the election year tactics are on full display in Lansing right now. Both Republicans and Democrats are pulling out all the stops to make the other side look bad, all while trying to negotiate a bipartisan budget with historically high revenue. National polling indicates it should be a good year to run as a Republican with President Biden’s favorability ratings under 50%. Whether that advantage will materialize in Michigan has yet to be determined. Expect to see more political maneuvers as we move into the beginning of election season in July.

Unemployment Insurance Agency Problems Persist

  • Who needs to know: Businesses that pay into Michigan’s Unemployment Insurance Agency (UIA), as well as citizens who have had their identity used to collect unemployment benefits.
  • Potential impact: The Michigan Auditor General just presented the findings of its audit of the UIA to the Legislature and the findings should be concerning to everyone.

As if Michigan’s UIA hadn’t been under enough scrutiny after an investigation found potentially $8.5 billion in fraudulent claims, now comes an auditor general report stating that more than 5,500 staff members were not given criminal background checks before being hired, along with other issues.

Of the 5,500, at least 71 had a history of financial crimes. The Office of the Auditor General is the constitutional investigatory office for the Legislature. They cited UIA for numerous “material conditions,” including:

    • Sixty-three (45.3%) of 139 departed workers we sampled continued to have access to the State of Michigan network and Michigan Integrated Data Automated System to view and make unauthorized changes to claims for an average of 32.6 days after their departure. The continued access contributed to the $3.8 million UI fraud the former worker committed in mid-2020.
    • UIA did not:
      • Timely execute data sharing agreements with 3 staffing agencies and 16 Michigan Works! Agencies (MWAs).
      • Ensure completion of confidentiality agreements by 2 staffing agencies and MWAs. We noted 8 (80.0%) of 10 selected MWA workers did not complete the confidentiality agreements until they had been working between 12 and 126 days.
      • Provide 29 (69.0%) of 42 selected staffing agency and MWA workers with required Social Security Administration (SSA) training and 28 (66.7%) with Department of Treasury and data governance training. UIA provided 12 (28.6%) workers with SSA and Department of Treasury trainings and 13 (31%) workers with data governance training between 15 and 165 days after they began working at UIA
    • UIA did not ensure preemployment criminal history background checks were conducted on 5,508 staffing agency and MWA workers and did not inquire about the results of those voluntarily completed by contracted agencies. We identified 71 (42.0%) of 169 workers still employed with one or more misdemeanor and/or felony convictions for crimes such as embezzlement, illegal sale/use of financial transaction devices, false pretenses with intent to defraud, identity theft, and armed robbery.

House and Senate Oversight Committee Chairs called for immediate safeguards to be put into place so that issues like this are resolved. These issues will likely form the basis of future committee meetings into the spring and fall.

The Week Ahead:

  • Tuesday, the House Regulatory Reform Committee will be taking testimony on legislation that would amend insurance and liability laws for peer to peer car sharing programs.
  • Tuesday, the Senate Appropriations Natural Resources and Environment, Great Lakes and Energy Subcommittee will be taking testimony on the state’s orphan well program.
  • Tuesday, the Michigan Strategic Fund Board will be meeting.
  • Tuesday, the Michigan Liquor Control Commission will be meeting.
  • Tuesday, there will be a hearing on the following Administrative Rules:
    • 2021-081: Nurse Aide, Trainer and Training Program Rules
    • 2021-087: Family Independence Program
    • 2021-088: State Disability Assistance Program
  • Wednesday, the House Energy Committee will meet to discuss clean energy legislation.
  • Wednesday, the Michigan Board of Pharmacy will meet.
  • Thursday, the Michigan Investment Board will be meeting.

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