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Gov. Whitmer unveils $5.6B recovery plan targeted at schools, businesses

Craig Mauger
The Detroit News

Lansing — Gov. Gretchen Whitmer unveiled Tuesday a wide-ranging, $5.6 billion COVID recovery plan that features $2 billion for schools, $225 million for economic development programs, and an extension of unemployment benefits.

The Democratic governor announced the proposal during a press conference, setting up a potential high-stakes fight with the GOP-led Legislature, which controls the state's finances and has threatened to use the power to spur Whitmer to lift restrictions on restaurants.

The new plan came four days after financial experts unveiled rosier than previously expected revenue projections for the state. However, about 90% of the plan will come from the federal government and relief programs approved by Congress.

"It is vitally important that we immediately take that federal funding that everybody advocated for and get it out to our residents," said Budget Director Dave Massaron, adding the administration planned to send a formal request to the Legislature on Wednesday.

The plan features $90 million that Congress appropriated for vaccine distribution and $575 million to expand COVID-19 testing, tracing and lab capacity in Michigan. The $225 million for programs at the Michigan Economic Development Corp. will go to grants for high-tech startups, restaurants and other "placed-based businesses" and to support small businesses.

The education element of the program features $1.7 billion from the federal government and $300 million in state dollars to help schools "meet the governor’s goal of providing every student with an in-person learning opportunity by March 1 and to help address the learning loss that has occurred due to the pandemic," according to a press release.

"To help grow and strengthen our economy, we must provide crucial support for our families, small businesses and front-line workers," Whitmer said in a press release. "The MI COVID Recovery Plan will help small businesses get through the winter, help us put more shots in arms and ramp up vaccine distribution, and get our kids back on track in school."

Senate Majority Leader Mike Shirkey, R-Clarklake, said Whitmer was proposing policies and programs previously advanced by legislative Republicans. He noted she had vetoed $220 million in General Fund support for the Unemployment Insurance Trust Fund that was tied to a temporary extension of maximum unemployment benefits from 20 weeks to 26 weeks. The jobless trust fund is usually financed by taxes on businesses.

"Senate Republicans will take a look at what the governor has proposed and see where we can make improvements,” Shirkey said.

The governor's plan includes a call for the Michigan Legislature to permanently extend maximum unemployment benefits from 20 weeks to 26 weeks.

It also features $1 million for the proposed creation of an Office of Rural Development, rental and food assistance, as well as funding to waive penalties for property owners who didn't pay their summer 2020 property taxes on time as a result of economic hardship created by the pandemic.

The proposal would use $5 million to implement a weapons ban at the state Capitol.

Gov. Gretchen Whitmer

Of the $5.6 billion plan, $300 million would come from the state School Aid Fund and $275 million would come from the General Fund, Massaron said.

Sen. Curtis Hertel, D-East Lansing, the top Democrat on the Senate Appropriations Committee, said he was already working Tuesday to formally introduce the plan.

The Senate's next scheduled session day is Jan. 26. Whitmer's goal is for all Michigan schools to offer in-person instruction 34 days later by March 1. The Legislature should act on the proposal quickly, Hertel said, emphasizing funding for vaccine distribution.

"This is the way we open. We open safely," Hertel said.

The COVID-19 pandemic and restrictions aimed at stemming the spread of the virus have slammed Michigan's economy since the state reported its first cases on March 10. The unemployment rate reached 24% in April, according to the U.S. Bureau of Labor Statistics. It was down to 6.9% in November, slightly above the national rate of 6.7%.

But federal assistance and improvements in the state's economy have increased state tax revenue above past forecasts. Michigan's tax revenue for fiscal year 2021 is coming in $1.2 billion higher than was predicted in August — still about $505 million lower than last year's revenue — state finance officials reported Friday during the Consensus Revenue Estimating Conference in Lansing.

A Senate Fiscal Agency report indicated the state has surpluses in last year's budget that closed at the end of September. There is a $2.5 billion surplus in the General Fund and a $1.2 billion surplus in the School Aid Fund.

Michigan's metrics for tracking the spread of COVID-19 have also improved. Last week brought 12-week lows for the number of new infections and the rate of tests bringing positive results.

Republicans in the Legislature have called on Whitmer, a Democrat, to reopen indoor dining at restaurants and bars, which has been suspended since Nov. 18. Whitmer's administration has said it plans to allow indoor dining to resume on Feb. 1.

On Jan. 8, state Rep. Thomas Albert, chairman of the House Appropriations Committee, said the governor must move toward loosening restrictions on Michigan's economy "before the Legislature can have meaningful conversations about the next steps in allocating federal COVID-19 relief funds."

Albert, R-Lowell, vowed Tuesday not to "hand the governor a blank check to continue mismanaging our state’s response to COVID-19."

"Clearly, there is a need to help struggling Michiganders, but I am disappointed the governor’s plan does not appear focused enough on getting help to where it is most needed effectively and efficiently," Albert said.

In an interview with Jackson TV this week, Shirkey, the top Senate Republican, indicated the Legislature could be “more aggressive with budgets” or appointments if Whitmer continues restrictions through her health department.

“Until she starts treating the Legislature as an equal branch of government, I think there’s going to be some consequences,” Shirkey said.

Staff Writer Beth LeBlanc contributed.