Michigan News And Capitol Report, Week Ending Friday, June 5th, 2026

SBAM Sounds Alarm On Health Insurance Costs 

Rising health care costs are becoming one of the most significant threats facing Michigan small businesses, according to Small Business Association of Michigan (SBAM) President and CEO Brian Calley. 

Speaking on MIRS Monday, recorded at the Mackinac Policy Conference, Calley said the issue is not receiving enough attention despite mounting concerns from business owners across the state. 

"The most important issue that is not getting a lot of discussion in places like this is the rising costs of health care," Calley said. 

Calley said small business owners who provide health insurance for their employees are facing year-after-year double-digit premium increases that are consuming resources that otherwise would be invested in growth, expansion and new hiring. 

SBAM recently surveyed its members and found that 42% of employers who currently offer health insurance believe they are only one to three years away from being unable to continue providing coverage if current cost trends persist. 

"It's spiraling out of control," Calley said, noting that many businesses are redirecting capital that would normally be used for future investments simply to keep pace with health insurance expenses. 

Calley said most small businesses continue to provide health insurance directly through the small-group market rather than relying on employees to purchase coverage through the Affordable Care Act marketplace. 

While some workers may qualify for federal subsidies in the individual marketplace, Calley said many small business employees earn too much to receive assistance, making marketplace plans an expensive alternative to employer-sponsored coverage. 

He warned that continued cost increases could eventually force employers to provide workers with stipends to purchase their own insurance rather than maintain company-sponsored plans. 

Asked about the causes of rising costs, Calley pointed to pharmaceutical prices and hospital expenses, both of which he said have increased at rates well above inflation. 

He also cited consolidation within the health care industry as a contributing factor. 

"There is a strong correlation between consolidation of health systems," Calley said. "It went from being a very decentralized system with a lot of players in it, to a few massive conglomerates that control most of the marketplace." 

As policymakers look for solutions, Calley said one option worth exploring would allow small businesses from different industries to combine their employees into larger insurance risk pools. He suggested that giving small employers greater flexibility to pool coverage could help reduce costs and improve access to affordable health insurance. 

The issue is likely to remain a major priority for SBAM as it advocates on behalf of its more than 32,000 members across Michigan. 

Tourism, Gas Prices On The Mind Of Michiganders 

Returning from the Mackinac Policy Conference along the Lake Huron or Lake Michigan shorelines takes you through areas that rely on tourism for large parts of their economy, but reports and stories indicate travel could be down as gas and other costs rise. 

Around Oscoda, in Iosco County, the people MIRS talked with had a variety of issues being discussed, and while none of them aligned with the talk at the conference, the people in The Office Bar and Grill, the Edelweiss Tavern and downtown brought up local government issues, but the increased price of gas was front of mind for nearly everyone and how that could impact the tourist economy that is the lifeblood of the area. 

"People still want to take a summer trip. What's changing is how they make it work. We're seeing more flexibility, more planning, and a stronger focus on getting value for their budget," said AAA spokesperson Adrienne Woodland. 

A Consumer Pulse survey from AAA of 400 people in Michigan found that 59 percent still plan to take a vacation, while 44 percent said they plan to take the same number of vacations this year as last year. While Woodland didn't have concrete numbers for Memorial Day weekend, she said the higher gas prices and personal finances were the main concerns put forward by the 23 percent of people who expected to take less vacations.  

The Memorial Day kickoff to the summer was forecast by AAA to only see a 2,000 person increase over 2025 for people traveling 50 miles or more away from home.  

Most people surveyed, 71 percent, had finalized their vacation plans before June 1, which saw 59 percent planning a road trip and 41 percent planning a beach destination. Eighty percent of those destinations would be in the U.S.  

"It’s the smallest year-over-year increase we've seen in more than a decade, and although travel demand remains strong, higher fuel prices and persistent inflation may cause some travelers to shorten their trips, delay plans or stay closer to home," Woodland said. 

Petroleum Analyst and PDI Technologies Vice President of Media Relations and Communications Patrick De Haan said that with the Strait of Hormuz being closed there was huge uncertainty about what the summer gas prices were going to look like. 

De Haan said if the Strait were to reopen tomorrow, that it would take about 24 to 48 hours before people would start seeing the price of gas drop, but it would typically take a year for the prices to return to what they were before the conflict with Iran started. 

He said because of the tightening of the oil supply belt that any impact that happens to production on the domestic gas supply chain is going to be felt by consumers, especially heading into hurricane season. 

"Mother Nature is just as unpredictable as the situation between us and Iran," De Haan said. 

He said that the winter-summer blends of gas have already been successfully switched over and tourism that happens during the long weekend holidays were essentially a blip in the overall impact, but the demand for gas during the summer months usually peaks in June and July, which the AAA survey marks as the height of travel. 

"Mother Nature could derail that. If there's a major hurricane, obviously this year is going to be a lot different because of the uncertainty over the ongoing situation between the U.S. and Iran and there's really no telling on how bad it could get," he said.  

De Haan said right now the national average for gas in the U.S. was about $1.15 more than the same time in 2025 and that Americans were spending about $441 million more on gas. Over Memorial Day, the national average price of gas was about $1.48 more than in 2025.  

The GasBuddy summer forecast cites the high cost of gas impacting tourism, with 56 percent of Americans wanting to drive more than two hours. That number is down by 69 percent from a previous 2025 report. The GasBuddy Survey was conducted in May, while the AAA survey was conducted in April.  

There are 67 percent of respondents saying that gas prices will directly impact their driving plans and 36 percent saying those are causing them to take fewer road trips. 

"This is the most volatile summer at the pump in years, and the Strait of Hormuz closure is at the center of it," he said. 

Diesel prices remained high and that also had an impact on economics and University of Michigan-Flint Economics Professor Chris Douglas said the longer it stays up, the more impact is seen on the price of goods. Those price of goods also impacted people taking vacations in the state. 

Douglas said if there was one thing that families could cut back on to save money when tightening their belt, it was the summer road trip to Mackinac Island, Oscoda or Traverse City, which all have large tourist economies. 

"The ferry tickets have gone up in prices, so it could be that consumers who have been stretched by, at this point, five years of high inflation might just say, 'Well, this is the summer that we’re just going to stay home,'" Douglas said. 

Douglas said while people facing those price increases may think there is a recession, the United States is not in a recession and those indicators have not been met. However, he did say that just because we're not meeting the definition didn't mean people weren't feeling the pinch of inflation, especially after the last reading showed it increased to 3.8 percent.  

He said people see unemployment differently, because with 10 percent unemployment, there are still 90 percent with jobs. 

"It doesn't really impact you directly, although you don't like to see your neighbor lose his job obviously, but when you're talking about higher prices, that impacts 100% of people. So there's no way to avoid it," he said. 

Douglas said those higher prices disproportionately hit people on the lower end of the economic spectrum. 

He said the University of Michigan consumer sentiment showed that consumers were more pessimistic about the economy right now than they were after the housing bubble burst in 2008, causing the worst recession since the Great Depression. 

"We're nowhere near that right now, fortunately, but it's just the grind of higher prices for the last four plus years and now with $5 gas it's like icing on that cake," he said. 

One of the terms that has been thrown around is the "K-shaped economy" and Douglas said that is a concept that has been talked about since the 2008 recession. He said take the letter, lay it flat and each line of the K represents in broad strokes a portion of the economy, with one line going up and one line going down. 

He said in broad strokes that people with a degree are doing better than those who don't have a degree, but only about a third of Americans have a degree. 

"Which means for two-thirds of Americans, their recovery hasn't been that great in general," he said. 

He said hotels, restaurants, bars and other attractions, especially in the northern Michigan tourist areas, relied on those tourism dollars, especially between Memorial Day and Labor Day. 

He said the prediction was hard to make and those businesses preparing for the summer season in February weren't expecting to be facing $5 per gallon gas prices. 

"If you would have told someone that on Valentine’s Day, 'Oh, Happy Valentine’s Day! Next month at this time, you'd be paying $5 for gas,' No one would have believed you," Douglas said. 

He said if there happened to be another energy shock from something like a hurricane that thumped the production areas of the U.S. it could end up pushing the economy over the edge and directly into recession. 

Douglas said he ended up running in the Bayshore Marathon in Traverse City over Memorial Day weekend and said anecdotally that it didn't seem to him that there was much tourism happening outside of 3,000 people and family there for the Boston Marathon qualifying event. 

"I kind of wondered if that wasn't a sign that things are going to be kind of slow this summer," he said. 

Traverse City Tourism CEO Trevor Tkach said the event helped the city with a strong start to the year. He said occupancy for hotels over that weekend was up, but they had also seen more hotels built in the area, but the final numbers were still not in. 

"I would say we've been off to a bit of a shaky start. I attribute a lot of that to the weather, the flooding, and some of the residual stories, even though it didn't directly impact Traverse City that much," Tkach said. 

The flooding did hit northern Michigan and Gov. Gretchen Whitmer declared a state of emergency for most of the counties in the region. It was also a major topic of discussion in Alcona County. 

He said the various events, like the Cherry Festival and Bayshore, were the lifeblood of the area and there are people still coming to some of the 60 to 80 ticketed events in the Traverse City Food and Wine event, but also said those people were coming from further away. 

"We're hearing a lot about a K-shaped economy, where people who have maybe more resources available to them are spending even more this year, and I'm observing that in what we're seeing people who are buying tickets to that event," Tkach said. 

He said because of the lower end tourist attractions in the area, he feels the city can take advantage of both ends of the "K" because of places like the Sleeping Bear dunes and beaches in the area that don't cost as much. 

"We're lucky in that way, that we're winning on both ends," he said. 

With restaurants and hotels being put in the crosshairs, Michigan Restaurant and Lodging Association CEO Justin Winslow said the gas prices are impacting the hospitality sector, because even if they do go on vacation, it doesn't mean people go out for dinner. 

"Gas prices have driven down demand, especially from outside areas where we've traditionally done well," Winslow said. 

He said places like the Chicago metro area were slower. He also said people from Texas and Florida came to Michigan to escape the summer heat. 

Winslow also pointed to a 30 percent decline in travel from Canada, which directly benefits Michigan, because of the state's location. 

Within Michigan, he said, people seem to be staying closer to home and adopting the "staycation" method, but restaurants overall can still see a bump from people just taking time off to stay at home, which does benefit restaurants closer to the populated areas of the state. 

He said the full data for Memorial Day would be out sometime mid-June and said the weather was another portion of the tourism puzzle that wasn't cooperating during Memorial Day weekend. 

"By the time you turn the corner and got to Memorial Day Monday, it turned out to be nice, but it was looking for a Friday, Saturday and Sunday big outdoor weekend. I think that they're a little challenged by that front," he said. 

He said the hospitality industry is number one in northern Michigan, and it sits well outside the manufacturing base of the state. 

Winslow said slightly more than half of the restaurants were showing store sales decline year-over-year. 

He did point to gas prices and inflation, but said there was a third issue he felt needed to be addressed. 

"We continue to underfund the Pure Michigan campaign, and so I think there's also less awareness out there. You have to consistently be in direct communication in front of people making the case of why Michigan is the place to come to, and we just haven't had the resources," Winslow said. 

MEDC Hands $6.82M For 30 Homes In 3 Cities 

The Michigan Economic Development Corporation (MEDC) announced it gave nearly $6.82 million in grants and tax breaks to build 30 housing units in Calhoun, Lapeer and Monroe counties. 

Albion, in Calhoun County, is getting a $5 million Revitalization and Placemaking (RAP) program grant to build 21 residential spaces and six commercial spaces in nine properties across a block in the downtown area. 

“The transformation of this vacant property will help create new economic activity while preserving the historic character that makes Albion unique,” Rep. Steve Frisbie (R-Battle Creek) said. 

The development would also get $575,481 in support from MEDC Brownfield Tax Increment Financing. There is already a 12-year obsolete property rehabilitation act tax abatement on the property. 

North Branch would get a $992,000 Michigan Community Revitalization Program (MCRP) grant to help redevelop a hardware store into eight apartments and a commercial space.  

Downtown Monroe would get a $250,000 Build MI Community grant (BMC) to reopen a vacant building and create two apartments and a commercial space.  

“This funding will help return a vacant building to productive use, which is good for downtown Monroe, area taxpayers and local families,” State Rep. Joseph Bellino Jr. (R-Monroe) said. 

Gov. Gretchen Whitmer said funding in programs like the RAP, MCRP and BMC helped revitalize cities in Michigan. 

“Our population is growing, and we’ve been ranked a top state for opportunity and doing business. These three new projects will turn vacant properties into thriving homes and commercial space,” Whitmer said. 

Social Media Smashes Whitmer After Data Center Groundbreaking 

Gov. Gretchen Whitmer attended a groundbreaking for the Oracle Stargate data center in Saline with OpenAI CEO Sam Altman and Oracle Co-CEO Clay Magouyrk on Monday, and was excoriated on social media. 

On the heels of the Mackinac Policy Conference that was dominated by business and government leaders crowing the benefits and positives surrounding the introduction of data centers in Michigan, Whitmer was hit with the full force of the two-thirds of people who oppose data centers in their communities. 

Whitmer said the site would create 450 permanent jobs and 2,500 construction jobs while the site was being built. 

“I’ve been very clear with companies that want to call Michigan home. Human intelligence cannot be replaced. AI must always be a tool to bolster human intelligence, not the other way around,” Whitmer said. 

She said they were putting guardrails in place with the data centers, making sure they create jobs. However, there are expected to be large job losses from white-collar sectors across the job market as AI replaces those people. 

She said that OpenAI was providing 400,000 college students in Michigan free access to the ChatGPT Codex program, which is an AI research assistant that can cost about $20 per month and be used to write programs and code. 

The online hate directed toward Whitmer didn’t come from just one political direction. The social media platform X, which is home to many conservatives, saw a post from Michigan Public Reporter Colin Jackson become a hotbed of attacks for people interacting with the viral post. 

Many of the progressives and Democrats who are present on Reddit and posting in the Michigan subreddit were going after her as someone who had turned her back on the party, stating she was a “sellout” and expressing their disappointment towards the data center move. 

There were also many in the Democratic Party centered on BlueSky that were going after her for standing alongside Altman and Magouyrk. 

Data centers were a dominant topic at the Mackinac Policy Conference, with many of the panels and panelists touting AI and data centers. 

Whitmer had also called the $500 billion six-site OpenAI Stargate data center project in Washtenaw County the largest one-time investment in the history of Michigan.