Lansing Update: Momentum Builds to Cut Taxes for Working Poor and more…

Posted April 29, 2022

In this update:

More Than 80 Groups Join MCC in Backing Big Tax Cut for Working Families

Momentum is growing to deliver a major tax cut for lower income working families, a policy long backed by Michigan Catholic Conference (MCC).

Joining the MCC in advocating for an increase of the state Earned Income Tax Credit (EITC) is a coalition of more than 80 organizations spanning business, health and social services groups.

"I've never seen such a large and inclusive group of organizations come together to back a tax cut," said Ken Sikkema, a former Republican Senate Majority Leader who hosted a press event Thursday featuring the Michigan EITC Coalition and press members from Capitol and statewide media.

Together, the coalition is urging the Legislature and Gov. Gretchen Whitmer to expand the state EITC from the current 6% to a proposed 30%, which would significantly increase what working families would receive as a tax credit that could help pay for necessities like groceries and utility bills.

MCC has long supported the EITC, beginning with the creation of the state EITC in 2006, as well as helping save it in 2011 when lawmakers nearly eliminated it in a series of tax reforms.

The Church supports the EITC in part because it's proven to both support the working poor with the necessities of life and because it can lift them out of poverty.

"While encouraging the human dignity that comes with work, the EITC is a pro-family, pro-children policy that provides a level of stability and assistance to help less affluent families get by and cover necessary expense and emergencies," said Tom Hickson, who is MCC's vice president for public policy and advocacy and one of the featured speakers at the virtual press conference this week.

Tom Hickson, MCC's vice president for public policy and advocacy, speaking during the Michigan EITC Coalition press conference.

MCC has testified in support of Senate Bill 417, sponsored by Sen. Wayne Schmidt -- the proposal to lift the EITC to 30% -- at a previous committee hearing in December 2021. Since that time, Gov. Gretchen Whitmer has also announced her support of expanding the EITC.

Both Republicans and Democrats have signaled support for expanding the EITC, meaning that both the Legislature and the Governor are on record in support of an increased EITC.

State Spending Plan Beginning to Take Shape

Next year's state budget is getting closer to completion after the appropriations committees in both the House and Senate approved their spending plans to counter the Governor's earlier proposals.

The full House and Senate are expected to approve their respective budget proposals next week. After that, the conference committee process will ensue, which is typically when the Governor, House and Senate come together to agree on a final budget that will eventually get signed into law.

MCC staff have been diligently following the budget process and working with lawmakers to include funding beneficial to Catholic schools, charities and other items for respecting the dignity of life and ensuring the common good.

Below are some of the spending items of interest to the Church and where the Governor, House and Senate differ, if at all.

MCC Sees Success in Including Nonpublic Schools in Some Budget Proposals

MCC staff have been successful at getting nonpublic schools included in some funding opportunities, but work remains to include them in more.

For instance, MCC staff were able to persuade the Legislature to include nonpublic schools in a grant program designed to bolster school safety, after the Governor left them out of a $51 million proposal.

Nonpublic schools are eligible for a portion of the grant money featured in the Senate budget that totaled $34.9 million for school safety, security assessment, and mapping grants, as well as for the House's total budget of $227.5 million for safety grants. The House cap on grants was raised to $1.2 million for a public or nonpublic school, compared to $50,000 per school cap in the current budget.

Nonpublic schools would also have access to mental health and support services through their local public schools under the Senate and House plans to fund such services at $37.8 million. The Governor had put forth an additional $361 million for programs and personnel to support student mental health.

Meanwhile, there are still a few areas where MCC staff will continue to work with the Legislature to secure funding for the inclusion of nonpublic schools.

The Governor did not propose funding to compensate nonpublic schools for state health, safety, and welfare regulations. Most recently, $1 million for this program was signed into law for the current fiscal year, although the amount included in past budgets had been as much as $2.5 million.

The Senate maintained current funding at $1 million, with the House maintaining the program but without an appropriation. MCC will work to get this resolved during the upcoming conference committee process.

Nonpublic schoolteachers were also unfortunately excluded from the Governor's proposed teacher retention bonus program to provide up to $11,000 to educators in public schools over the next four years, but neither the Senate nor the House funded the program.

The following are other education funding items of note to MCC:

Tuition help for low-income students attending private colleges:The Governor proposed increasing Michigan Tuition Grants from $2,800 to $2,900 per student, while maintaining the funding level of $42 million from the current year's appropriation.

In a similar program designed to help low-income students attend private colleges and universities in Michigan, the Governor suggested a tuition cap of 2.5 times the in‐district, per‐credit community college tuition rate for the Tuition Incentive Program (TIP). The budget assumes savings associated with implementing the cap on TIP, thus reducing funding for the program to $65 million.

MCC supported the work of the Michigan Association of Independent Colleges & Universities to oppose the reduction.

Both the House and Senate rejected the tuition caps and raised the Tuition Grant award amount to $3,000 from $2,800. The House added language encouraging the state to award both Tuition Grants and Competitive Scholarships to students if they are eligible for both.

Further, the Senate included a new scholarship program to provide 2022 high school graduates with a grant of up to $3,000 per year for community college or tribal college students and up to $6,000 per year for public university or independent college or university students.

Per-pupil funding: Public schools would get a minimum of $9,135 per student under the Governor's proposal, while the Senate and House have set that amount at $9,150 and $9,000, respectively.

Incentive money to become a teacher:The executive budget included $250 million for creating the Michigan Future Educator Fellowship, which would provide up to $10,000 per year for first‐time degree seekers and career changers to lower the cost of becoming a PreK‐12 teacher. Students must attend public institutions of higher education to qualify. The House included $66 million for this program and broadened the qualifications to include those who attend private college teacher prep programs.

Dual Enrollment:The Governor, House and Senate are all in agreement in keeping $3 million in funding for nonpublic high school students to obtain college credits through dual enrollment opportunities.

Shared time services:The Governor, House and Senate have not proposed any changes or cuts to shared time instruction, which allows a nonpublic student to enroll in "non-essential" elective courses at a public school and be considered a part-time pupilin the public school for state aid purposes.

Discipline for abortion referrals: MCC supports therequirement within the budget that school districts have a disciplinary policy for staff who refer students for abortion. The Governor removed it, the House restored it, but the Senate did not.

Student teacher pay:The Governor proposed $150 million for the Mi Future Educator - Student Teacher Stipend Program for educator preparation programs to pay student teachers up to $9,600 per semester. The Senate countered with $25 million for scholarships of $3,750 per semester to be used for tuition for student teachers attending public or private colleges. The House provides $150 million to districts and ISDs for compensation for student teachers.

Maternity Home Grants See First-Time Proposed Legislative Investment

For the first time, the House provided $4 million in maternity home expansion grants to provide safe housing and supportive services for pregnant women in need.

The House also again recommended $1.5 million in grant funding for pregnancy resource centers which provide alternatives to abortion and $700,000 to reinstate the Pregnancy and Parenting Support Services Program, which assisted pregnant women and their babies with counseling, prenatal health information, parenting education and items like clothing, diapers, and formula.

Additionally, the House included $10 million for marketing programs to promote infant adoption, $50,000 to inform the public the state does not use taxpayer dollars to fund elective abortions, and $3 million to create a maternal navigator pilot program to refer pregnant women for counseling, substance-use disorder services, and pregnancy and parenting resources.

In related services, all three budget proposals set aside funding for grants to purchase diapers and diapering supplies for children under 3. The Governor included $250,000 for diaper banks, while the House provides $1.5 million in total assistance, and the Senate sets aside $4.4 million for diaper assistance programs, maternity homes, and other nonprofit agencies that distribute diapers free of charge.

Also, the House put in grant funding of $500,000 for universities and $500,000 for community colleges to establish and operate a pregnant and parenting student services office. The Senate included $33,300 that each state university may use to establish these offices on campus and allows community colleges to use operations funding to establish similar programs.

The following are other human services and poverty-fighting measures of interest to MCC:

Assisting the Poor: All budgets retain $7.23 million for the annual clothing allowance and maintain funding for the Heat and Eat program, which uses low-income energy assistance to help individuals in need qualify for additional food assistance from the federal food stamps program. Additionally, all budgets maintain funding of $19 per bed night for emergency homeless shelter programs.

Adoption & Foster Care Support: All budget proposals retain the $55.20 administrative rate for foster care providers. The House also provides $2 million to fund a tax credit for adoptive parents and $100,000 for a marketing initiative to find older foster children adoptive homes before they age out of the system. Both the House and Senate include language directing the state to explore allowing foster care maintenance payments to continue throughout a child's adoption process.

Fighting Human Trafficking: In addition to continued funding of the state's human trafficking commission, all budget proposals would allocate $200,000 for human trafficking intervention services and provide $50,000 for caseworkers to provide immediate assistance, such as food and clothing, to child trafficking survivors and children removed from dangerous environments.

Each proposal would also allow individuals who are victims of domestic violence or human trafficking to receive an additional 3 months of food assistance. The House additionally allocates another $1 million for trafficking survivor grant programs and $250,000 for county grants toward human trafficking collaboratives.

Ensuring Ethical Research:The House and Senate both reinstated language that was left out of the Governor's recommendations to require universities to report on any human embryonic stem cell research conducted at their institutions.

The House included $5 million for research grants to be available to public universities that agree not to conduct any research on aborted fetal tissue and $100,000 to provide informational materials regarding the state constitutional limits on human embryo and embryonic stem cell research.