Making an Impact for Industry at the Capitol

2023 Legislative Year in Review

Manufacturers Move Forward in Challenging Legislative Session

This article appeared in the Jan/Feb 2024 issue of MiMfg Magazine. Read the full issue and find past issues online.

With an unprecedented political shift in the State Legislature prompting adoption of significant legislative packages, 2023 proved to be an impactful year for the manufacturing industry. Despite the change in political control, MMA has created wins for manufacturers and modified proposals to reduce some losses.

All in all, the legislative results of 2023 have left manufacturers and MMA with “cautious optimism” heading into 2024, according to MMA President & CEO John Walsh. “Substantial investments in workforce development, key regulatory changes, and policy improvements to manufacturing personal property tax exemption represent a few key wins that will carry into the future.

“It’s not a zero-sum game. We celebrate our wins as well as mitigate losses whenever we can,” Walsh adds. “And for those challenges we couldn’t defeat, like the repeal of Right to Work and adoption of an energy package that challenges access to reliable and affordable resources, we’ll both continue the fight while educating our members.”

Outside the Legislature, economic conditions created a tumultuous year for manufacturers. In early 2023, there were predictions that the country would enter an economic recession but that didn’t materialize after years of speculation. The automotive strike then occurred later in the year, disrupting production up and down the supply chain for 46 days, ultimately proving how resilient the auto industry is in Michigan.

“Policies near and dear to organized labor, the trial bar and environmental special interests were top of the docket for legislative Democrats who gained majorities across all levels of state government in 2023, a first in more than four decades,” says Walsh. “In this context, MMA’s dedicated team of Government Affairs professionals worked to educate policymakers on the importance of remaining competitive on a global stage, which is critical for attracting new business to the state and keeping what we have healthy and prosperous.”

“Manufacturing competitiveness shouldn’t be a partisan issue,” says Mike Johnston, MMA Executive Vice President of Government Affairs & Workforce Development. “Manufacturers are in every legislative district in the state, and we worked with legislators on both sides of the aisle to achieve pro-manufacturing wins and stave off detrimental proposals.”

Making sure our members can compete effectively in the global economy from their Michigan-based location is our primary advocacy goal. We evaluate every new legislative proposal by one standard: whether it helps or hurts Michigan’s business climate. Tax policy, environmental policy, workforce policy, economic development policy — they all must increase our competitiveness or the legislative proposal will be met with our vocal opposition and our suggestions to amend the proposal to meet our criteria. MMA’s voice is strong, especially when our members bring their full geopolitical footprint to bear. With members in almost every community in the state and driving local economies, when manufacturers speak, policymakers listen.

“We called on our members throughout the year to make their voice heard to their elected officials,” said Walsh. “It was key to achieving legislative successes — and sometimes success simply meant slowing, changing or stopping harmful legislation.”

Several new policies that came out of Lansing in 2023 impacted areas of crucial importance to the industry such as economic development, energy policy and workforce training. MMA’s advocacy impacted all legislation, on proactive policy initiatives or positive modifications to adverse policy.

Pro-Manufacturing Wins

Workforce Training and Going PRO Talent Fund

MMA achieved great success in 2023 on a bipartisan basis to support manufacturing workforce training. Record funding dedicated to key manufacturing training programs like $55 million to the Going PRO Talent Fund and $65 million to Michigan Reconnect recognizes the importance of investing in today’s workforce and the future generation of manufacturers.

In addition, the PRIME program — which creates advanced manufacturing programs in high schools — received another $6 million to expand Michigan’s nation-leading number of schools to 49. (Learn more about Michigan’s PRIME program.)

“It’s extraordinarily important to our industry to get our employees skilled on the latest and greatest so that we can compete not only across the country but around the world,” Walsh says.

Investments in Economic Development Incentives

One of the first efforts in the 2023 legislative session resulted in an additional $900 million injection into economic and community development, including $150 million to the Strategic Outreach and Attraction Reserve (SOAR) fund.

“The return on $3.5 billion investment of the state’s investment in SOAR is clear —$3.5 billion was invested since 2021 and returned $16 billion in new capital investment and 16,000 new jobs,” says Johnston.

Challenges to Manufacturing Competitiveness

Right to Work

The abrupt repeal of Right to Work early in the year remains a concern for the state’s economy and has a broader impact on the state’s business climate.

Michigan’s law gave workers the choice of whether or not to join a union. MMA says that this policy change will reverse progress on Michigan’s ability to grow and keep jobs.

“Twenty-five other states still have Right to Work, so it does have an impact on where companies invest and what they think about,” Walsh says.

Energy Policy

One of MMA’s greatest legislative concerns is the recently adopted renewable and clean energy initiative.

The Clean Energy Future bills signed into law in November statutorily force utilities to shut down base-load generation and replace it with renewable sources, with 50 percent “renewable energy” by 2030, increasing to 60 percent by 2035, and 80 percent “clean energy” by 2035 reaching 100 percent by 2040. Currently, just 11 percent of our generation is renewable which means, 89 percent is not renewable.

That is a dramatic and unachievable mandate that will dramatically increase energy costs and reduce reliability for the manufacturing-based economy. By eliminating coal and requiring costly carbon capture equipment to natural gas, the reliability of baseload generation creates uncertainty for our members.

“We’re all for having clean energy systems and a clean planet, but the question of how and when is huge. The date that they’ve set, in our opinion, is unrealistic,” Walsh says. “Solutions must be affordable and reliable, which is not the case right now.”

“Twenty percent of the Michigan economy is manufacturing, and energy is a lifeblood. We need baseload energy 24 hours a day, seven days a week, 365 days a year, and it needs to be reliable and have enough capacity for growth in the economy,” says Johnston. “Our very vocal concerns throughout the legislative process added flexibility to the mandates. However, we will remain vigilant in ensuring price and reliability are primary considerations during the implementation process.”

Moving Forward

One of MMA’s priorities is to educate members about pending and approved laws in order to clear up misconceptions and provide members with the facts they need.

“When a bill passes, like it or not, our members must comply with the new law,” Walsh says. “We leave it all on the field to achieve a pro-manufacturing result but, in the end, win or lose, we help our members comply with the policies.”

To meet these goals, MMA holds in-person events, hosts online seminars, provides business services and discounts, communicates via social media, produces this member magazine and provides advocacy on issues that impact the manufacturing industry. Members are encouraged to continue to contact legislators as well.

“Our legislators are moved more when they hear from our members — from individuals who may well be a neighbor,” Walsh says. “It really increases the volume of our voice.”

Walsh also has a particularly enlightening vision for the future — and it’s all based on “tone.” The business sector must tell Michigan’s story in a different light — with common goals of sustaining our economy, positively enhancing our state’s image and helping businesses of all sizes thrive.

“We’re going to tell the stories and the histories about individual businesses and how they grow as a result of dedication, resiliency, persistence and an innovative spirit,” Walsh says. “Those are the stories we really want to promote. We have an opportunity to help cure the divided nature of our country right now by giving these examples. We need to tell our stories one by one, and we’re going to do that. We’re going to make that happen.”

The Coming Year

With one more year under the current political environment, MMA will continue to protect the Michigan business climate. That means evaluating every proposal on whether it improves or diminishes the Michigan business climate. We will continue to engage our members in reaching out to legislators to articulate the impact of policy changes on their business.

Together we can drive pro-manufacturing policies, to protect and improve Michigan manufacturing’s ability to compete in the global economy.

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2024 Manufacturing Legislative Outlook

Opportunities and Risks on the Horizon

The 2024 legislative session is poised to make history. Local elections this past November resulted in the departure of two Democrat members in the House, leaving the chamber with a 54-54 partisan split. With no clear House majority until special elections are held in mid-April and a general election in November that will condense the legislative schedule, questions abound about what the Legislature will be able to accomplish in the coming year. Adding to the complexity and uncertainty is a late-December federal judicial ruling that will force a redraw of many legislative districts before the April candidate filing deadline.

“As the Legislature adjourned in 2023, we were able to successfully stall bills threatening our industry, but we’ll remain vigilant in 2024 because our opponents are working to build support and momentum behind these anti-manufacturing initiatives,” said Mike Johnston, MMA Executive Vice President of Government Affairs and Workforce Development.

Bills that MMA will be guarding against in 2024 include:

• A $1.5 billion program supported by Governor Gretchen Whitmer, as well as House and Senate leadership, to provide up to 15 weeks of paid leave.
• Bills creating a higher and more complex threshold for economic development incentives, adding several new criteria including unionized labor, social justice and placemaking requirements.
• A package of 16 bills that would mandate wage transparency, eliminate independent contractors and impose criminal penalties on job-providers.
• Legislation that would empower local units of government to create a patchwork of disparate regulations ranging from wage levels to paid leave mandates and even plastic packaging.
• A so-called “polluter pay” proposal that would disincentivize redevelopment and increase litigation by expanding liability on property owners.

But MMA won’t solely be in a defensive position. In 2023, the Association had success moving a Michigan-based research and development tax credit proposal forward, which can lead to significant benefits for the manufacturing industry and the state’s economy if it is passed.

“We’re very proud of that work because we had to reformulate how the bills were introduced to get it back to a form we wanted and get it out of the House,” Johnston says. “So it’s currently in the Senate, and we’ll take a shot at getting that done in 2024.”

MMA will continue to be proactive in moving forward priorities that will benefit members and the industry, while working to block proposals that would be detrimental to the industry and the manufacturing-driven economic recovery. Because of the unique partisan and calendar dynamics of the year, Johnston expects a compressed legislative session that will move quickly, which means members must make their voices heard early in the year.

“We’ll also be focused on electing pro-manufacturing candidates running for the House in November,” Johnston said. “It’ll be hyper-intensive and hyper-fast action. We need our members engaged.”

See above for ways to make your voice heard on the legislative issues that affect your business or contact MMA’s Government Affairs team at 517-487-8552.

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Have a manufacturing story to tell? E-mail communications@mimfg.org.