Court sides with governor on emergency powers in 1945 law

Michigan’s Court of Claims turned aside a challenge to Gov. Gretchen Whitmer’s emergency powers under a 1945 state law in a ruling issued Thursday.

Judge Cynthia Stephens rejected the challenge by House Speaker Lee Chatfield (R-Emmet) and Senate Majority Leader Mike Shirkey (R-Jackson) that the governor had exceeded her powers.

“It would take a particularly strained reading of the plain text of the (law) to conclude that a grant of authority to deal with a public crisis that affects all the people of this state would somehow be constrained to a certain locality,” Stephens said.

However, Stephens did rule that the governor cannot use a 1976 law to “unilaterally make emergency declarations,” the Associated Press reported. Whitmer had issued emergency orders under both the 1945 and 1976 statutes after the Legislature had declined to extend a state of emergency in late April.

Legislative leaders said they will appeal the decision.

In the meantime, all the governor’s executive orders remain in force.

For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.

Revenue meeting paints bleak outlook for Michigan into 2022

The state has a $3.2 billion hole in its current budgets, public finance experts testified today before the state’s Consensus Revenue Estimating Conference. The conference is used to set revenue targets for elected officials each year. Of that gap, $2 billion is in the state’s roughly $11 billion General Fund, which finances a wide variety of services that counties are mandated to provide.

The outlook for FY21 is little better, with the experts seeing another $3 billion combined revenue drop for the General Fund and School Aid Fund. For FY22, which begins Oct. 1, 2021, the shortfall should be $2 billion.

Data and conclusions provided Friday by the University of Michigan, the Center for Automotive Research, the House and Senate Fiscal Agencies, the Michigan Department of Treasury and the State Budget Office included:

• 22% of the state’s population is unemployed; and that level will persist through the end of June 2020
• The state’s payroll tax revenue will be down 9% for FY20
• One in seven businesses across Michigan will close, resulting in the loss of about 4.9% of jobs in the state
• Light vehicle sales will be down 50% compared to last year, but should rebound to 2019 levels in 2021 

With only four months left in the current fiscal year, serious decisions about cuts to the programs, services and departments supported by the state’s General Fund are imminent. Of the $3.2 billion FY20 shortfall, about $2 billion is in the General Fund. And the $1.2 billion gap in the School Aid Fund will put additional pressure on lawmakers to find more savings in the General Fund.

Restoring a balanced state budget, as required by law, can happen via a negative supplemental appropriations bill advanced by the Legislature or an executive order from the governor, which only would need approval by the House and Senate Appropriations committees, not the full chambers. The specifics of cuts, and the mechanism to enact them, are not yet apparent.

For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.

Governor extends State of Emergency, court battle looms

Gov. Gretchen Whitmer signed new Executive Orders Thursday night to extend Michigan’s State of Emergency and Disaster Declarations until May 28.

EO 66 terminated the previous State of Emergency (SOE) order that expired April 30. EO 67 states that Michigan remains under an SOE via the Emergency Powers of the Governor Act of 1945, which, unlike the Emergency Management Act of 1976, has no time limit on a declaration and no requirement for the Legislature to extend the declaration. The governor also issued EO 68, which declares the new State of Emergency and disaster under the Emergency Management Act through May 28.

Also, limits on places such as bars, restaurants and theaters are extended for the duration of the SOE under EO 69. The order continues to allow businesses to offer food and beverage using delivery service and takeout services.

Meanwhile, Republican majorities in the Legislature adopted HR 250 (Rep. Hernandez R-St. Clair) and SR 114 (Sen. Stamas, R-Midland), which authorize legal action on behalf of each legislative chamber against the governor for taking steps to extend the SOE.

With a court fight looming, Gongwer News Service reported, “Not only do several attorneys who have worked in state government for both parties say the Emergency Powers of the Governor Act clearly empowers the governor to put the state under an emergency and issue necessary rules and orders to address the situation without legislative approval, there’s also a theory that Ms. Whitmer could simply issue a new declaration under the Emergency Management Act with that declaration good for 28 days with nothing the Legislature can do, as long as she can point to new circumstances.”

In other actions on Thursday:

• The Legislature sent Senate Bill 858 to the governor, which codifies some EOs issued for various dates between April and July, while not addressing six of the governor’s orders, including the Stay at Home order. Bars, restaurants and other similar businesses would be able to open on May 16 under the legislation. Other key orders that would continue under the bill include protocols for prisons and jails (EO 62 through July 30) and restrictions for nursing homes and other long-term care facilities (EO 50 until July 30). The governor announced she intends to veto this bill.
• The House passed House Bill 5709 (Rep. Sheppard, R-Monroe), which would make disobeying a rule, order or directive issue by the governor a civil infraction, rather than the current misdemeanor, and allowing a fine of up to $100. The bill specifically says the statutory fine would take precedence over language of any order stating that the violation would constitute a misdemeanor.

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NACo leader touts ‘3 T’s’ and ‘guardrails’ for next federal rescue bill

In final event of 2020 Virtual Legislative Conference, the head of the National Association of Counties urged Michigan leaders to contact their members of Congress to back a “CARES Act 2.0” measure that would include $125 billion in direct aid to counties.

Matt Chase, NACo executive director, said the U.S. House is expected to take the lead on the bill. “Bipartisanship support for local aid is building,” Chase said. “But we need to keep up the pressure.”

Chase said NACo’s message to Congress centered on two themes right now:

• Focus on the 3 T’s of testing, tracing and treatment
• Counties want “guardrails, not third rails,” a response to criticism by some lawmakers that local governments want to use COVID funds to handle longstanding and unrelated fiscal issues, such as pensions

Chase said NACo supports the creation of a federal ombudsman or rapid response team in the 2.0 bill to give counties immediate answers on whether a specific use of federal funds was appropriate. “We are totally for accountability.”

The discussion was the final event of MAC’s two-week Virtual Legislative Conference, launched after the association was forced to cancel its traditional in-person event in Lansing. All eight virtual events can be viewed 24/7 by visiting the conference page on our website.

“Matt’s comments were an excellent cap to our conference,” said MAC Executive Director Stephan Currie. “We averaged 40 to 50 people viewing each event live, and we know far more will view them at their convenience later.”

Local governments will make $1.1B ask to governor in letter

MAC joined with associations for Michigan’s cities, villages and townships today on a letter to Gov. Gretchen Whitmer to advise on distribution of federal aid to local governments dealing with the corona pandemic.

The letter, signed by Executive Director Stephan Currie and his counterparts at the Michigan Municipal League and Michigan Townships Association, said, “Your letter to the White House correctly identifies a major concern that local governments around Michigan are preparing to face. As you are aware, Michigan’s local governments bore the brunt of the last recession and many are ill-positioned to face another economic downturn without significant support from the state and federal government. With that fact in mind, our three organizations respectfully request that you designate a significant portion of the current CARES Act funding the state is set to receive to cover local government reimbursements and recovery expenses resulting from the current pandemic.”

The groups added, “We urge the state to set aside an equitable amount of money for local units of government to draw down upon to reimburse their eligible, COVID-related expenses. Based on the amount the CARES Act made available to our largest members, we ask that an equitable per capita amount, equal to approximately $1.1 billion, be made available to all other local units of government in Michigan to cover these expenses.”

For more information on this issue, contact MAC’s Deena Bosworth at bosworth@micounties.org.

Revenue sharing increase highlights Gov. Whitmer’s FY21 budget

Michigan counties would see a $5.7 million boost to state revenue sharing payments under spending plans released today by Gov. Gretchen Whitmer for fiscal year 2021.

In her second budget plan, Whitmer advises the Legislature to appropriate $232.2 million in statutory revenue sharing for counties, a roughly 2.5 percent increase from FY20 levels, from an $11 billion General Fund. The governor’s proposal would extend a recent trend of modest increases in revenue sharing as Michigan emerged from the Great Recession.

Whitmer also is recommending $7.2 million to support recommendations of a joint county-state Jail and Pretrial Incarceration Task Force and $40 million in grants for local governments to address flooding and infrastructure issues created by rising water levels around the state.

“Any increase is good news for our members, who are still struggling with the effects of the Great Recession and state limitations on property tax revenue,” said Stephan Currie, executive director of the Michigan Association of Counties. “Still, in other areas of the budget, resources to counties are flat or even trending downward.”

Currie noted such areas as:

• Funding for county veteran services grants: $2 million recommended for FY21, down from $4 million in FY20.
• Funding for Secondary Road Patrol for county sheriffs: $11.1 million recommended for FY21, down from $13 million in FY20.
• Reimbursements to county jails for housing state prisoners: $14.8 million recommended for FY21, flat from FY20.
• Funding for “essential local public health services”: $51.4 million recommended for FY21, flat from FY20.

“We agree with the governor’s remarks this week that funding for local services is a crisis created by many decisions over many years in Lansing. We appreciate her commitment to a conversation on addressing that trend. Now is the time to do so, when Michigan’s economy is moving at a solid pace,” Currie argued.

FY21 Estimated Revenue Sharing by County

For more information on the state budget, contact Deena Bosworth at bosworth@micounties.org.