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Deal Reached on Fiscal Year ’22 Budget; A Number of Key Wins for Job Providers

Advocacy News – September 21, 2021

After months of negotiations, lawmakers and the Whitmer Administration have reached a deal on the Fiscal Year 2021-22 budget, which goes into effect on October 1.   The omnibus budget includes a number of key funding priorities for the Chamber and the business community as a whole.

The budget includes:

  • A $150 million deposit to the Unemployment Insurance (UI) Trust Fund, the 100% employer-financed fund that pays benefits to claimants.  The deposit is intended to recognize the unusually high amount of fraudulent benefits paid over the last year and a half and the stress COVID placed on the Trust Fund.  The MI Chamber has been advocating for a deposit to the Trust Fund over the last several months.  While we appreciate the deposit and the fact that lawmakers went to bat for this funding line item, we would have liked to see more money deposited and will continue to advocate for additional deposits to the Trust Fund so to avoid insolvency of the fund.  We will do so because insolvency would trigger a situation whereby the state would need to borrow from, and ultimately repay, the federal government.
  • $35 million for the Going PRO Talent Fund (Talent Fund) to help employers address their talent needs. Under the agreement, $250,000 of the total would be allocated to the Helmets to Hardhats program to recruit and assist veterans to transition to apprenticeship programs in this state. The Talent Fund makes awards to employers to assist in training, developing and retaining current and newly hired employees. Training funded by the Talent Fund must be short-term and fill a demonstrated talent need experienced by the employer. Training must lead to a credential for a skill that is transferable and recognized by the industry.  To find out more about the Talent Fund and how you can apply for funding visit https://www.michigan.gov/documents/leo/FY22_WBLOMS_Employer_Training_Guide_735196_7.pdf.
  • $5 million to the MI Department of Treasury to administer proposed statutory changes allowing “passthrough” businesses allowing them to fully deduct their state and local taxes (SALT) from their federal income.  This change would impact businesses organized as s-corporations, partnerships, limited partnerships, limited liability partnerships and limited liability companies.    With this appropriation,  we expect Governor Whitmer to sign previously vetoed legislation that would allow taxpayers the ability to realize significant savings in their federal tax liability.  These businesses have been subject to a $10,000 cap on how much SALT can be deducted from personal income.  If one considers the amount of property taxes paid on the business alone, you can see how this cap really limits how much SALT can be deducted.  In her previous veto message, the Governor acknowledged the legislation does NOT reduce state revenue (i.e., the savings are all realized through the federal tax code) and urged lawmakers to resend the bill with the FY ’22 state budget with funding for Treasury to administer the changes.  Given the appropriation, this should clear the way for the SALT legislation to be signed into law.
  • $55 million for the Michigan Reconnect Program.  Reconnect provides a last-dollar scholarship to individuals over the age of 25 with a high school diploma seeking an associate degree or Pell-eligible skill certificate.
  • $8 million for a Statewide Pre-Apprenticeship Program.  This statewide pre-apprenticeship program would connect individuals that are unemployed or underemployed with training and resources to advance careers in the building and construction trades. Of the $8 million appropriated, $5.5 million would be dedicated to the building and construction trades and $2.5 million would be dedicated to transportation.
  • $1.4 billion to increase eligibility and lower childcare costs. This line-item is funded by federal American Rescue Plan Act dollars.
  • $40 million in Pure Michigan funding to assist the tourism industry.

We are still analyzing other impacts of the FY ’22 budget and will provide relevant updates as they become available.  Please contact Wendy Block with any questions at wblock@michamber.com.

Advocacy News – September 21, 2021

After months of negotiations, lawmakers and the Whitmer Administration have reached a deal on the Fiscal Year 2021-22 budget, which goes into effect on October 1.   The omnibus budget includes a number of key funding priorities for the Chamber and the business community as a whole.

The budget includes:

  • A $150 million deposit to the Unemployment Insurance (UI) Trust Fund, the 100% employer-financed fund that pays benefits to claimants.  The deposit is intended to recognize the unusually high amount of fraudulent benefits paid over the last year and a half and the stress COVID placed on the Trust Fund.  The MI Chamber has been advocating for a deposit to the Trust Fund over the last several months.  While we appreciate the deposit and the fact that lawmakers went to bat for this funding line item, we would have liked to see more money deposited and will continue to advocate for additional deposits to the Trust Fund so to avoid insolvency of the fund.  We will do so because insolvency would trigger a situation whereby the state would need to borrow from, and ultimately repay, the federal government.
  • $35 million for the Going PRO Talent Fund (Talent Fund) to help employers address their talent needs. Under the agreement, $250,000 of the total would be allocated to the Helmets to Hardhats program to recruit and assist veterans to transition to apprenticeship programs in this state. The Talent Fund makes awards to employers to assist in training, developing and retaining current and newly hired employees. Training funded by the Talent Fund must be short-term and fill a demonstrated talent need experienced by the employer. Training must lead to a credential for a skill that is transferable and recognized by the industry.  To find out more about the Talent Fund and how you can apply for funding visit https://www.michigan.gov/documents/leo/FY22_WBLOMS_Employer_Training_Guide_735196_7.pdf.
  • $5 million to the MI Department of Treasury to administer proposed statutory changes allowing “passthrough” businesses allowing them to fully deduct their state and local taxes (SALT) from their federal income.  This change would impact businesses organized as s-corporations, partnerships, limited partnerships, limited liability partnerships and limited liability companies.    With this appropriation,  we expect Governor Whitmer to sign previously vetoed legislation that would allow taxpayers the ability to realize significant savings in their federal tax liability.  These businesses have been subject to a $10,000 cap on how much SALT can be deducted from personal income.  If one considers the amount of property taxes paid on the business alone, you can see how this cap really limits how much SALT can be deducted.  In her previous veto message, the Governor acknowledged the legislation does NOT reduce state revenue (i.e., the savings are all realized through the federal tax code) and urged lawmakers to resend the bill with the FY ’22 state budget with funding for Treasury to administer the changes.  Given the appropriation, this should clear the way for the SALT legislation to be signed into law.
  • $55 million for the Michigan Reconnect Program.  Reconnect provides a last-dollar scholarship to individuals over the age of 25 with a high school diploma seeking an associate degree or Pell-eligible skill certificate.
  • $8 million for a Statewide Pre-Apprenticeship Program.  This statewide pre-apprenticeship program would connect individuals that are unemployed or underemployed with training and resources to advance careers in the building and construction trades. Of the $8 million appropriated, $5.5 million would be dedicated to the building and construction trades and $2.5 million would be dedicated to transportation.
  • $1.4 billion to increase eligibility and lower childcare costs. This line-item is funded by federal American Rescue Plan Act dollars.
  • $40 million in Pure Michigan funding to assist the tourism industry.

We are still analyzing other impacts of the FY ’22 budget and will provide relevant updates as they become available.  Please contact Wendy Block with any questions at wblock@michamber.com.