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As part of the 2015 road funding package, which included tax and fee increases, Republican legislators included a provision that would reduce the income tax should revenue growth exceed economic growth. In the early 2020s, thanks to the COVID revenue surge, that threshold was hit, and the income tax rate was reduced for 2023 to 4.05 percent. But the administration of Governor Gretchen Whitmer determined that the language meant the decline was for one year only and raised the rate back to 4.25 percent for 2024. A coalition of groups, including the Associated Builders and Contractors and the National Federation of Independent Businesses, sued. Republican legislators joined them, calling the interpretation at odds with the intent of the law to keep the rate at 4.05 percent. Former Governor Rick Snyder, who signed the bill with the trigger, also called the Whitmer administration’s actions incorrect. But in March, a unanimous Court of Appeals held the Department of Treasury, with guidance from Attorney General Dana Nessel, was correct (See Gongwer Michigan Report, March 7, 2024). That ruling even included Chief Judge Michael Gadola, who was once Snyder’s legal counsel (not at the time the law in question was signed). Although the Supreme Court has a 4-3 majority of justices nominated by the Democratic Party to justices nominated by the Republican Party, none of the Republicans dissented from the brief order in Associated Builders and Contractors of Michigan v. State Treasurer (SC Docket No. 166871). The order said only that the court was denying the application for leave to appeal the Court of Appeals ruling because it was not persuaded the questions presented should be reviewed. Shane Hernandez, president of ABC, called the ruling another burden for contractors facing high costs. And Amanda Fisher, Michigan state director for the NFIB, said it’s unfortunate the court overrode "what was and is clearly the purview of the Legislature." The Mackinac Center for Public Policy brought the lawsuit on behalf of several plaintiffs. "Taxpayers just lost $700 million a year without a single vote in the Legislature," said Patrick J. Wright, vice president for legal affairs at the Mackinac Center, in a statement. "This case is a reminder that the Legislature must be extremely precise in order to avoid a misguided interpretation of the law by a future administration opposed to its original goals." Democratic legislative leadership is still weighing whether any changes might be considered, if any, to two voter-initiated laws that were reinstated last month by a Supreme Court ruling that would increase the minimum wage and require employers to provide paid sick leave. Under the July ruling, the tip credit will be completely phased out to the full minimum wage by February 2029 while the minimum wage would be $12 per hour plus the inflationary adjustments made by the state in February 2028. Mandated paid sick time for workers is also enacted under the ruling. Sen. Thomas Albert (R-Lowell) plans to introduce SB 991 and SB 992 , which would keep the state’s tipped wage credit at 38 percent of the minimum wage, allow for the minimum wage to rise to $12.05 per hour by 2030, and maintain the exemption for businesses with fewer than 50 employees from having to provide mandatory paid sick leave. Albert announced his proposal August 22, saying in a statement the court ruling would shutter a large number of Michigan businesses and lead to higher prices, arguments business groups and Republicans have been making since the high court’s ruling. "This legislation puts forward a workable solution by keeping current laws in place – steadily and sustainably raising the minimum wage while protecting jobs in the restaurant industry and other small businesses," Albert said. "If Democrats have a viable alternative, they should present it sooner rather than later." When the Supreme Court decision was issued July 31, Senate Majority Leader Winnie Brinks (D-Grand Rapids) said the caucus’ legal team would review the decision. "Here’s what I know to be true: the Legislature has a responsibility to uphold the will of the people," Brinks said at the time. "Additionally, the people of Michigan deserve clarity. The then-Republican majority made a deceitful bait-and-switch on the very people they were sworn to serve, and this lengthy battle was caused by their tactics." What the Democratic-controlled Legislature might do, if anything, on the tip credit or any part of the laws in the wake of the ruling is still unclear. Legislative leadership has largely been silent on the issue since the high court’s decision. A spokesperson for Brinks said Thursday in response to a request for comment from Gongwer News Service that there was no update from the majority leader as to where the caucus is at in response to the ruling. The bill package includes HB 4556 , HB 4557 , HB 4558 , HB 4559 , and HB 4560 , and, as written, would allow those incarcerated to receive a "second look" at their prison sentences after 10 years served. Although the bills received testimony in the House Criminal Justice Committee in March, they’ve lost momentum. "People need to stop being afraid of their own shadow, quite frankly," said Alexandra Bailey from The Sentencing Project. "Other states, more conservative states, have passed this legislation. I think people are still afraid of the tough on crime narrative, and that’s getting a bit old. You’re harming people, including your own government staff, in the process. At some point, we just kind of need to knock it off and start doing something that makes sense." The legislation doesn’t guarantee anyone is released from the corrections system, it just makes it a possibility, especially for those who are elderly or sick, Bailey said. "These are people that we know from a criminological standpoint have very little threat of recidivism. And we’re not even asking for a guarantee of release," she said. "We’re just asking that the system take a look at who might be good to reduce the strain on the system overall." Negotiations on the legislation have continued, said Rep. Kara Hope (D-Holt), who is the chair of the House Criminal Justice Committee and one of the bill sponsors. Several changes have been made to the bills, including increasing the timeline from 10 to 20 years, but given the crunch of an election year, Hope said she’s not optimistic that there will be the time or the political will to get the legislation across the finish line. "Obviously it pains me to say it," she said. "But I think the bills got farther, maybe, than anyone was expecting." But that doesn’t mean she’s giving up on the legislation, Hope said. Criminal justice reform is important, she said, especially as it relates to sentencing and how it affects people of color. When it comes to Department of Corrections staffing shortage, Hope said a multifaceted solution was needed, and that second look legislation should be part of the conversation. "It’s important," she said. Hope said second look legislation would also ease the burden on corrections officers and their families by reducing the overall prison population. She said grew up with corrections officers in her family, so she’s aware of how hard the long hours can be for not only officers but their loved ones. "My heart goes out to them," she said. The staffing shortage only increases the immediate need for the legislation, Bailey said, noting the Michigan Corrections Organization request of Governor Gretchen Whitmer to call out the National Guard to help (See Gongwer Michigan Report, July 3, 2024). Whitmer has not responded to that request. The second look legislation would affect people who are domestic violence victims who have been incarcerated, too, Bailey said. "I have a friend right now, who we’re trying to get her a commutation. She got stabbed in her pregnant stomach by her ex-husband," she said. "I think most women in Michigan, when I tell them this … they go ‘she should have gotten the key to the city.’" The legislation has come under heavy criticism from law enforcement, Republicans and some Democrats as policy that would upend judicial sentences and sentencing guidelines designed to make the punishment fit the crime. "I understand why attorneys general and folks like that are uncomfortable with this type of legislation," Bailey said. "It does unearth decisions that they system has made." Time may be running short this term, but no one who supports the legislation is giving up, Bailey said. "We’ll see you next year, and the year after that and the year after that, and every year until it’s passed," she said. DCD OUT AND ABOUT:
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SUPREME COURT ALLOWS 4.25% INCOME TAX RATE TO STAND
ALBERT PROPOSES KEEPING EXISTING MINIMUM WAGE, SICK LEAVE IN PLACE
ADVOCATES ASK LAWMAKERS TO GIVE SECOND LOOK BILLS ANOTHER CHANCE
THE DCD MARIJUANA TEAM: YOUR COMPETITIVE EDGE!
