Michigan Gov. Whitmer pushes 'kitchen table issues' in State of State speech

Michigan Gov. Gretchen Whitmer announced Wednesday that she planned to propose a big increase in state education funding and strongly discouraged remote learning for K-12 students during her fourth State of the State address. 

The 26-minute address from the Detroit Diesel manufacturing facility in Redford Township focused largely on job incentives, tax cuts and the economy, acknowledging that many Michigan residents are “bearing the brunt of inflation" and a slow recovery from pandemic uncertainty.

The first-term Democratic governor touted Tuesday’s announcement that General Motors Co. would be investing $7 billion in electric vehicle battery manufacturing facilities in Lansing and Orion Township — a move that countered beliefs that Michigan didn’t have the tools or bipartisan cooperation to compete with other states.

“Yesterday, the world saw what we can accomplish together,” Whitmer said. “Democrats, Republicans, businesses, utilities, and labor joined forces to equip Michigan with solid economic tools to attract big projects and create thousands of jobs.”

The address at the Metro Detroit manufacturing facility is believed to be the first time a governor has delivered a State of the State address from outside Lansing in more than a century, a state archivist told the Associated Press. The speech marked the second straight year that Whitmer delivered remarks virtually instead of before a joint session of the Legislature due to the COVID-19 pandemic. 

The location and Whitmer’s focus on jobs, targeted tax cuts and "kitchen table issues" reflected how Whitmer hopes to spend the state’s billions of dollars in state surplus as she works with the Republican-controlled Legislature on supplemental spending bills and her own fiscal year budget proposal in the coming weeks. 

In a Wednesday joint statement, the GOP legislative leaders stressed that Michigan needed clear information, bold ideas and a restoration of trust but Whitmer's speech failed to deliver those. Whitmer’s ideas looked backwards at things already tried or started and did “little but celebrate other people’s accomplishments,” House Speaker Jason Wentworth said. 

“Rising inflation, prescription drug costs and small businesses still trying to get back to full strength — these are all very real problems working families in Michigan face every day,” said Wentworth, the Farwell Republican. “The people we represent need real solutions and leaders who can deliver results.”

Senate Majority Leader Mike Shirkey, R-Clarklake, said the Senate would “take a hard look at our spending” to push for long-lasting investments on infrastructure. 

“We will also return to Michigan families what we do not need, proposing significant and broad-based tax reductions — trusting that moms and dads can spend their money more wisely than government,” Shirkey said.

In-person schooling

Whitmer’s comments on education were a clear-cut criticism of remote schooling, cementing her stance on an issue that has divided school districts across the state since the pandemic.

"I want to be crystal clear," Whitmer said. "Students belong in school. We know it’s where they learn best. Remote learning is not as fulfilling or conducive to a child’s growth."

Several school districts across the state, including Detroit and Flint, transitioned to remote learning this month as the omicron variant spurred a surge of COVID-19 cases in Michigan. The decision to move to remote schooling is largely left to individual districts, but GOP groups pressured the governor ahead of her address to condemn the practice for the sake of students who generally have milder symptoms if they do contract the virus.

Whitmer's comments on in-person schooling came after the governor said she planned to propose “the biggest state education funding increase in more than 20 years.”

The announcement came after Whitmer and the GOP-led Legislature last year approved a historic $17.1 billion funding plan for schools, calling it the “the "largest investment in education" in state history.”

In a statement Wednesday, the Michigan Education Association was mum on Whitmer’s comments related to in-person learning but applauded her plans to repeal the pension tax and “find solutions for the educator shortage.”

“For the sake of our children’s future, Michigan leaders must do more to attract and retain talented educators and school support staff — and that means increasing wages for starting and veteran educators, reducing our state’s overreliance on standardized testing and respecting educators for the professionals they are,” said Paula Herbart, president for the association.

Tax incentives, cuts

Whitmer stressed the importance of cooperation between her office and  Legislature during her address and pointed to examples of collaboration, such as small business relief, criminal justice reforms, skilled trades training and the recent $7 billion GM investment and accompanying incentives. 

General Motors Co. confirmed Tuesday it will invest $7 billion for electric vehicle and battery production at four Michigan sites, creating 4,000 new jobs and retaining 1,000 positions. The Detroit automaker announced the single largest investment in its history in Lansing alongside Whitmer and legislative leaders after the state's Michigan Strategic Fund Board approved $824.1 million in incentives for the projects.

With those accomplishments in the rearview mirror, Whitmer proposed other fiscal policy changes she hoped to reach some consensus on with the GOP-led House and Senate. She laid out plans for a repeal of the pension tax, an increase in the Earned Income Tax Credit, lower insulin costs and the creation of a $2,500 electric vehicle tax credit.

Whitmer’s plan specifically advocates for a boost the state's earned income tax credit from 6% of the federal credit to 20% and the repeal of a 2011 change that subjected additional pension income to the state's income tax.

The governor said about 500,000 household with pensions would save about $1,000 a year under a pension tax repeal plan that, by the end of 2024, would exempt public pensions and restore deductions for private retirement income. 

She also proposed a new $2,500 rebate for the purchase of an electric vehicle and charging equipment, part of an effort to secure Michigan’s future in the auto manufacturing industry.

GOP counteroffer

Republican legislative leaders began countering Whitmer's plans in recent weeks by proposing ways to spend the state’s budget surplus that includes about $1.7 billion more in state tax revenues for the next fiscal year than was previously expected. The state also has about $7 billion in federal COVID relief funds it still must allocate through the Legislature.

The Michigan Senate Finance Committee voted Wednesday to advance a proposal that would bring about $2.3 billion in tax cuts. And House Appropriations Chairman Thomas Albert, R-Lowell, on Friday called for "targeted and sustainable tax relief" for Michigan residents.

The Senate bill would lower Michigan's corporate income tax rate from 6% to 3.9% and decrease the personal income tax rate from 4.25% to 3.9%. It would also allow people to claim a $500 non-refundable credit for each dependent under the age of 19.

Senate Republicans also have their own proposal to increase the tax exemption for senior income. In a Tuesday statement, Sen. Jim Runestad asked the governor to work with Senate and House leadership to expedite legislation "to provide meaningful relief to working families and seniors."

Health priorities

Whitmer also floated plans to lower costs on insulin and increase funding in mental health. 

The plans to lower insulin costs appear to cash in on House bills that passed through the lower chamber last year that would cap insulin prices at $50 a month. The bills have not seen movement in the Senate. 

Whitmer's insulin plans also come as Attorney General Dana Nessel launched an investigation into Eli Lilly this week to investigate the high cost of insulin.

“We all agree that insulin costs too much, and I know we can work together to hold drug companies accountable, lower costs, and save lives,” Whitmer said. “Let’s get that done too.”

Whitmer touted past investments into mental health programs but promised to also increase investments into efforts to retain and recruit mental health workers and expand access to the mental health resources. 

eleblanc@detroitnews.com

cmauger@detroitnews.com

Staff Writer Mark Hicks contributed.