Review our new Government Relations Update - Caucus Call: Lansing

Peter J. Langley
Week of March 7, 2022

Caucus Call Lansing

This Week's Updates

The Michigan House and Senate will be in session Tuesday, Wednesday and Thursday this week.

$2.5 Billion Income Tax Cut Legislation Awaits Governor’s Decision

  • Who needs to know: Tax consultants, attorneys counseling on tax matters, financial consultants
  • Potential impact: Legislation cutting personal income tax levels passed the Michigan Legislature last week and is awaiting a decision by Gov. Gretchen Whitmer.

Last week, both the Michigan House and Senate passed legislation that would change the personal income tax from 4.25% to 3.9%, as well reduce the age for receiving an exemption on retirement income to age 62. The bill would also create a $500 per child tax credit. The bill passed both the House and Senate on a mostly party line vote. There were a few House Democrats that supported the measure. The bill is estimated to cost the state $2.5 billion dollars a year once fully implemented.

Republican leaders touted the bill as a way to save citizens of the state money in the face of growing inflation as the state is benefitting from record revenue. Democrats derided the measure as an election year tactic that was not negotiated in good faith. Whitmer called the tax cut unsustainable and irresponsible. Still some believe that there may be a possibility that the governor will be forced to negotiate some level of tax cut after calling for tax relief in her State of the State Speech. While this legislation may end up being vetoed, it will likely serve as the catalyst for ongoing budget discussions.

The tax cut legislation is Senate Bill 768, and it is sponsored by Senator Aric Nesbitt.

Report: Energy Prices Would Increase If Line 5 Were Shut Down

  • Who needs to know: Businesses with high energy usage, consultants developing energy usage plans
  • Potential impact: A recently released report indicates that energy prices could increase $5.8 billion per year if Enbridge’s Line 5 were closed.

The Consumer Energy Alliance released a report last week outlining some of the potential impacts of a closure of Enbridge’s Line 5 petroleum pipeline. Line 5 is the pipeline system that runs through Michigan, including under the Straits of Mackinac. The Consumer Energy Alliance describes itself as the, “leading voice for sensible energy and environmental policies for consumers, bringing together families, farmers, small businesses, distributors, producers and manufacturers to support America’s environmentally sustainable energy future.” Members of the organization include multiple chamber of commerce organizations, as well as labor groups.

The report studies what the potential impact to the region would be if Whitmer were successful in her efforts to shut down the line. While there is no precedent for the government shutdown of a petroleum pipeline, the study likened the potential pipeline shutdown to a natural disaster that shuts down multiple refineries and attempts to extrapolate the impact on supply and prices. The study indicated that Michigan could see an annual increase in transportation fuel expenditures of $1.7 billion on gasoline and $515 million on diesel.

Proponents of closing Line 5 attacked the report as a product of an oil and gas industry association. They also claim that the findings fly in the face of multiple environmental associations studies that find contrary results. Other reports have indicated that the petroleum currently moved through the Line 5 pipeline could be moved by alternative means like trains, trucks, or barges. These other reports have also concluded that the price of energy may increase but not as dramatically.

There is a plan to remove Line 5 from the Straits and put it in a tunnel below the lakebed. That project is awaiting permitting decisions from the Army Corp of Engineers and review by the Michigan Public Service Commission.

The Week Ahead:

  • Tuesday, House Judiciary Committee will meet to take up legislation that allows for the use of school bus cameras to track offenders that illegally pass stopped buses.
  • Tuesday, numerous House and Senate Appropriations Subcommittees will take testimony on departmental budgets.
  • Tuesday, House Energy Committee will have a presentation on electric and hydrogen fueled vehicles from Toyota.
  • Tuesday, the PFAS Action Response Team will meet.
  • Thursday, the Marijuana Regulatory Agency will meet.
  • Thursday, the Natural Resources Commission will meet.
  • Friday, the Mackinac Bridge Authority will meet.

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