Advocacy News – Jan. 25, 2024
Gov. Gretchen Whitmer delivered her sixth State of the State (SOTS) address Wednesday night, calling on lawmakers in the 41-minute speech to stand up a long list of new and expanded programs, many of which will require a considerable amount of new spending.
Like most SOTS addresses, there weren’t a lot of specifics, more of a general vision and priorities for the year, and a look back at what’s been accomplished.
Key proposals: Most notably for the business community, the Governor called on the Legislature to tackle new and reworked economic development incentives, including a research and development (R&D) tax credit; a so-called “High-wage Incentive for Regional Employment (HIRE) in Michigan” program, which would allow participating businesses to keep a portion of state income taxes generated by newly hired employees; and an “Innovation Fund” to invest in “high-growth startups that will create the future, right here in Michigan.”
The Governor also urged lawmakers to create a range of new programs, including:
- Free preschool for all 4-year-olds;
- Two years of free community college for any high school graduate;
- A new caregiver tax credit for those caring for sick or aging relatives;
- $1.4 billion to build and rehabilitate homes; and
- Rebates to purchase new cars — $1,000 off any new car, $2,000 for electric vehicles and an added $500 if the vehicle is made at a facility where a labor union represents workers.
Our take: Many of the proposals lack sufficient details to be fully analyzed and we have significant questions about how these items might be funded – especially given that the state budget for Fiscal Year 2024-25 is expected to be tighter than in recent years now that federal pandemic dollars have dried up.
As President & CEO Jim Holcomb noted in a statement issued after the SOTS: “We were glad to hear the Governor acknowledge the state’s troubling trends – from lagging population growth to struggling education outcomes – and we share her optimism for the bright future of our Great Lakes State. At the same time, we’re wary of the mixed messages, lack of details and the many ‘sounds great on paper’ ideas that raise serious questions about our state’s and taxpayers’ ability to afford them. Our shared future and building a stronger Michigan for all rely on bipartisanship and putting meaningful policy over politics, along with ensuring fiscal responsibility and sustainable budgeting. Employers are ready to be part of the solution with a state ready and open for business and a competitive, stable landscape that can attract the good-paying jobs of today and the tomorrows to come.”
The bottom line: The Michigan Chamber is eager to work with the Governor and Legislature to craft the pragmatic solutions that can and will move our state forward in an economically competitive and viable way. The Michigan Chamber is fully committed to that collaboration and cause.
Go deeper: Watch the Governor’s full speech HERE.