Welcome back to OTR on thi special Correspondents edition.

Our lead story, The House Republican Road fix plan moves to the state Senate, where its future is iffy at best.

Around the OTR table this week, Simon Schuster, Claire Hendrickson, Elena Durnbaughl and Jordun Hermani.

Sit in with us as we get the inside out.

Off the record production of Off the Record is made possible in par by Bellwether public relations, a full servic strategic communications agency partnering with clients through public relations, digital marketing and issue advocacy.

Learn more at bellwetherpr.com And now this edition of off the Record with Tim Skubick.

Welcome to Studio C as we go into spring we hope in Michigan with off the record.

Well here's the deal as Republicans Well here's the deal as Republicans passed a road fix plan and there are elements of it which will be popular in the Democratically controlled state Senate.

However, ladies and gentlemen of the panel is the House Republican plan D.O.A.

in th Senate?

Yay or nay?

Partly.

Ohh.

Yes, yes, yes.

As is.

Yes.

Yeah.

Yeah.

Why?

Partly because there are areas in which the governor has explicitly said she wants in a road funding solution tha the Republicans have included.

And Matt Hall has noted that they have areas o commonality which are they want hundreds of millions of dollars in cuts in the budget and they want to redirect sales tax revenue from gasoline to roads.

I mean, these are things that both that both the governor and Republicans have said they want.

So talk to me about the House plan.

Well, the House plan, it's what is it, a $3.1 billion road funding plan?

I actually wrote it down here to make sure that I wasn't going to mess any things up.

So I want us to take about $2 billion in corporate income tax earmarks on that straight to roads.

It wants to nix the 6% gas ta and put in a 20 cent increase.

Yeah, on on motor fuel.

Basically it wants to take all this money, redirect it back to the roads.

But, yo know, then you have to backfill.

Right.

And that's going to leave backfill.

Backfill.

Explain to folks at home what backfill is.

So because you are eliminating it.

Well you're taking all the sale tax sales tax on gas and directing that to roads a portion of the sales tax goes to school aid fund and you can't leave schools without money.

It would be something like $700 billion.

So the plan.

765.

756. going to leave a hole, a sizable hole in the state budget.

Let's talk about sort of the three main ways that there's still so much distance here.

In other words, there are a lot of potholes This plan can hit befor it goes to the governor's desk.

The budget cuts.

Whitmer has talked about mayb 500 million in budget cuts.

The Republican plan is billions of dollars in potential cuts.

That's huge.

So a lot of tough decisions and negotiation.

Still, Whitmer has proposed more money for public transportation than what's in the Republican plan.

That's still probably an area of negotiation.

And then the mega tax credits.

We have Republicans tryin to get rid of these legacy tax credits to create revenue for roads.

That's sort of a nonstarter for Whitmer.

She basically said that trying to get rid of these would be the state, saying that we're not seeing our end of this bargain that we made with companies through and a lot of business out of advocacy groups are worried that this is going to damage the state's reputation with businesses.

With your permission, let's pu that mega thing in perspective.

During the bad recession of 2008 Jennifer Granholm in the legislature, governor, then came up with this idea to keep the autos here.

Okay.

I mean, they were on the ropes, okay?

And this was a long term commitment here.

If you stay here, we'll help you for 20 years.

Now come the House Republicans say all bets are off.

Yeah, the the conversation is that with business incentives like the mega credit companies haven't delivered o the number of jobs they promised and that, you know, the state is pouring millions of dollars into them every year.

And we're not seeing the results in Michigan economically.

And so instead of cutting these big corporations a chec every year, the state can keep that as extra revenue extra revenue to pay for roads.

Did you hear the thud in the business community?

Yeah, absolutely.

I mean, and it's not just mega credits as well.

They've also promote propose earmarking corporate income tax in such a way that there's now $0 appropriated for the Strategic Outreach and Attraction Fund, which is Attraction Reserve Fund, which is a key economic development fund that's proposed by Governor Whitmer.

Now, Republicans say that more jobs.

Yes, but as Elena has said, this hasn't necessarily and reporting a bridge as well has shown that this hasn't really borne fruit, at least not yet.

Essentially, the Whitmer administration is saying you need to be patient, you to wait for these mega these enormous projects to develop and come down the lin to bring these jobs realization.

But I think that politics doesn't really work on those timescales.

Republicans nor Democrats have been really happy with the way SOAR has turned out.

And did did Whitmer have even SOAR money in her executive recommendation this year for the budget?

It was supposed to be the final.

It's a fade out.

It's a faide out.

And she she supported legislation last session to extend this corporate subsidy funding for a decade.

So, you know, the Republicans are targeting somethin Whitmer has really championed.

And you also have Hall kind of seizing on this momentum where you see the bipartisan support for these corporate corporate subsidy funds fading a little bit.

And he's basically saying, do we want I think this is a quote he said this week, do we want corporate giveaways or do we want to fund roads?

And so he's sort of putting Whitmer in a little bit of a tough place.

And it's hard for Democrats to make the case and say that, you know, we can talk until the cows come home about the hole the backfilling, what how this i going to be paid for, whatnot.

But the real fact of the matte is Democrats don't have a plan.

Whitmer has put forward a plan, but that does rely on stress.

Right.

And but that does rely on Democrats to be able to put forward some legislatio in order to further that plan.

They haven't really done that yet.

There's been an introduction from Representative Farhat in the House that's probably not going to go very far, considering that the Republican House has already passed its own plan and the Democratic Senate has done nothing but sort of, you know, pooh pooh the fact that this has gone on the way it has, you know, whether or not we want to talk about has this been done correctly, is sure, fine.

There might be an argument there.

But insofar as saying, well, we don't like that plan, this is almost like you know, when federally we the Republicans wanted to repeal Obamacare, but, you know, you had nothing to back up.

Okay, you take this away.

So what's your solution?

You can't just say not this.

You have to offer something in return.

If you're trying to sa that this is not the way to go.

I think I think Jordyn hitting the nail on the head here in particular, because, I mean, after the Republican House plan passed, we asked the Hous minority leader, Ranjeev Puri, what are the components, what are the fundraising mechanisms that you and your caucus would support?

And he couldn't name any.

So Governor Whitmer, Well, she has sort of a plan.

It's more of like the loose outlines of a plan.

She wants $1.7 billion from business, but she hasn't said ho that money's going to be raised.

So she's essentially dragging Senate Democrats who haven't come up with anything comprehensive of their own kicking in that come up with anything comprehensive on their own.

And House Democratic leadership is just like, oh, well, we're open to negotiations but won't say what should be involved in those.

So dragging them, kicking and screaming the negotiating table, she said.

After spring break, she wants to bring the sides together and have them negotiate.

But there's no counterproposal to balance against what House Republicans have proposed.

But, you know, we've had this argument in this town for years, which is we can help business or we can unilaterally disarm and throw up our arms and sa we're not going to do anything.

And what happens as a result of that?

Ohio comes in Indiana comes in, Timbuk2 comes in and Cherry picks all those jobs.

So you can't have it both ways.

But I do I want to go back to the fact that we at Bridge have done some some extensive reporting on this where, you know, if this is the case that these businesses are coming in, that they're making jobs, they're doing a poor showing of illustrating that these jobs are being created, that this is going to be battering Michigan.

So I do I understand where people are coming from when they say, you know, these corporate subsidies, we've been we've had them for a number of years now, they don't seem to be working.

If the argument is, well, we need to bear it out If the argument is, well, we need to bear it out and give it a little more time, okay, How much more time?

And at what point is it acceptable to to throw in the towel here in adding to that, how about the GM battery plant in Lansing, which they sold off after the governor made the deal with them?

And I think part of the deal, which has been, you know, construction paused and then the number of jobs at that site has changed.

So you make deals sort of with the initial promise that a certain number of jobs will come and then things change.

Companies make different decisions, You know, a different president gets elected and suddenly the EV market looks totally upended.

So it's just it's a it's a shifting set of criteria that that lawmakers are having to deal with.

If you're the auto folks sitting in your boardrooms saying, we've got this tariff problem with Mr. Trump, we've got the EV problem, and now Lansing is not helping us out.

What's going to break this logjam, guys?

Yeah, exactly.

Crickets.

Your guess is your guess is as good as mine.

Fortunately, that's not my job, right?

Yeah, I'm not responsible for that one.

But, I mean, you know, we're we're we're talking about the fact that Democrats don't have any real sort of road plan at the moment.

They are at least kind of competitive on the idea of giving some form of a tax break to Michiganders, like at least there's some kind of conversation going on there for them.

But yeah, in so far as all of this road funding stuff, it's not looking great.

Go ahead.

Well, and all of this gets complicated by the Republican approach to budgeting, scaling back the income tax rate.

And we have a massive hole created by the Roads Plan in the budget.

Yesterday, a bill came up in the Economic Competitive Nest Committee that would give tax credit to families in the house fiscal analysis said that it would reduce revenue by like 1.4 or 1.6 billion.

So these tax cuts, wherever they're coming from, are further reducin what would be the general fund?

It's a mess.

everything here is connected?

I feel like if you've seen Always Sunny in Philadelphia, I feel like Charlie Kelly dartboard over here with the strings attached.

Everything here is attached.

You know, the longer the Democrats don't have a road funding plan that they can put forward.

But, you know, Senate Democrats do have some form of a tax plan.

They want to have more targeted relief.

Whereas, you know, the the House Republicans want to talk about reducing the income tax by, you know, something from 4.25 to 4.05%.

You actually crunched the numbers on this and you said like for the median household, it would only save you like $130.

That's correct.

Yeah.

I mean, it'd be a relatively small increase, but this goes back to a 2023 surplus of revenue where because baked into a 2015 roads plan that showed when there was such a surplus of revenue that would bring down the income tax and Republicans said that this should have been a permanent change.

But I believe the Michigan Supreme Court ruled that it's just going to be a one year deal.

And so they want to make that permanent.

But Matt Hall said explicitly that this is going to be part of budget negotiations.

But I think the bottom line is that the roads plan, the Whitmer administration, would have much preferred if this was a deal that wa hashed out behind closed doors.

That's, I think, the way that they prefer to operate since Whitmer's entered office especially on major legislation.

But it's not something that I mean, Matt Hall decided to make this an extraordinarily public process and in turn kind of put the screws to Democrats and Whitmer on what he wants to see in a Roads Plan.

Two words user fees.

Well I think that's a great point, Tim.

It's the way out of the woods.

Well, you see Governor Whitmer calling for a long term sustainable road funding plan.

At the same time, you're hearing people in the road industry and road officials saying cars are becoming more fuel efficient.

We're not going to be able to rely long term on gas tax revenue.

Something's going to have to give at this point.

So is this a two year plan, five year plan, a ten year plan?

Who knows?

But somewhere down the line, there's probably going to be a discussion about, you know, usage fees.

That's I think that's how she gets around.

Matt Hall on the revenue increase.

It's not a general across the board and she hit it with the marijuana tax and the vaping tax.

Those are all user fees.

Okay.

Why not put a fee on you play golf?

No.

Okay.

Then we can put a user fee on golf.

Okay.

And the golfers who want to golf golf.

And for those of us who don' golf, we don't have to pay that.

They I think that's the way out of the woods on the revenue piece to get Mr. Hall on board or am I off because I think you're you're on to that you're definitely on to something there.

But you know, talking about we're talking about, you know, you bring up, for instance, like the taxing the vapes, for instance, back during the state of the state, I actually just reported on this not not too long ago.

Hall had openly acknowledged that that proposal was DOA because of the fact that the administration what they're pitching about taxing vapes at the 32% wholesale tax.

It also contains a provision that would ban any vaping products that are not currently FDA authorized that the number of FDA authorized vaping products is only like 30 something, and pretty much none of them are flavors other than menthol.

And that all of a sudden he said this is this is another attempt, the vape flavor ban, which we've seen before out of Whitmer, which was, you know, struck down by the courts for not going through the right rulemaking process.

You know, if you're trying to make the case for user fees, for fo collecting this money elsewhere, but that also contains smaller provisions that might, you know, get in the way of itself.

It just doesn't seem like there's serious negotiation.

There's another piece of the user fee.

Remember, we had a ballot proposal.

Rick Snyder, Remember him?

Okay.

And this is a user fee to help with the schools.

And that got turned down by 80% of the people.

So that's, you know, if they're going to do the user fee route, they've got to be very careful to pick on the people that are the smallest number, that raises the largest number of dollars.

Insightful, but that never happen.

We'll see.

Okay.

We've been talking sort of about thi Republican income tax rollback that is also D.O.A., right?

in the senate.

I mean because this is something that, you know, Democrats kind of unwillingly allowed to happen when seven of them voted yes.

Well that's that's true in the House.

They they did approve it an they sent it over to the Senate.

But it was a freebie.

I mean, if if you know, the Senate is going to kill something and you're in a swing district you could vote for this Republican plan.

Right?

It's a no brainer.

So but the Senate is not going to roll back the income tax.

I don't think so.

I mean, obviously, most Democrats in the House already voted against it.

Hard to imagine it would look much different in the Senate, which, you know, that's the chamber that they still control.

And you have Democrats on the House floor arguing we shouldn't be talking about lowering Michigan's flat income tax.

We should be talking about a graduated income tax.

Yeah, well, there's a new idea that hasn't been around.

Which would require a constitutional amendment, which is not going to happen.

Right.

I'm not like Mike Cox and Bill Schuette showed up in the same place.

Who covered it?

Anybody did.

Was did you take a shower afterwards?

You know house TV is a wonderful thing.

But no, that was in the House Oversight Subcommittee on the Weaponization of State Government, which is chaire by Representative Angela Rigas.

And, you know, there there have been some head to head conflicts between Rigas and Nessel and Mike Cox.

And former Attorney General Bill Schuette came in to talk about the role of the attorney general.

And that kind of ended up being largely a criticism of Nessel and how she's operated calling her a political actor, and that's how she interprets laws.

The Republicans on the committee were like, Yes, that's bad.

Rep Dylan Wegela was kind of like, Well, didn't she make some political decisions while you were in office Schuette with I believe it was marriage equality and marijuana.

And also about the Flint water and the Flint water crisis that was also discussed.

However, that was actually something they were coming after Nessel for with how she's handled it and kind of the end of the committee.

But my question is always, okay, what' what's actionable out of this?

And the word is nothing.

I mean, it's largely it's a we're mad.

Yeah, I mean, there's a reason why Attorney generals are popularly elected, and it's because you wan because the public wants to hire somebody who's going to take legal stances that comport with what the public wants, not necessarily like some academic disassociated position that, you know, you pulled out of case law.

Attorneys general Co and Schuette would tell you that the job is to defend the state constitution.

Right.

Right.

And but, I mean, the bottom line is that you have a former attorney general who right now has created a committee to ru for governor and put $1,000,000 of his own wealt into that committee, criticizing the current attorney general, who also has has rumored to have aspirations for higher office herself.

And so, you know, without actual policy I can't really necessarily see what this advances in term of a substantive policy agenda.

Do we know what the chairwoman agenda here is?

What is she going to call Ms. Nessel on the carpet.

She has submitted a subpoena like a letter.

I don't know if it rose to the level of subpoenas.

Well, the subpoena is coming for finishing documentation on the Flint water crisis.

Look, it's a legitimate question to know how much money was spent on an investigation, is it not?

I think it's a legitimate question to ask how much money is spent on any investigation, but especially one that did not bear fruit if bearing fruit meant people going to jail.

Yeah.

And the fact that you had two different attorney general seeking markedly different legal strategies and sort o attempting to prosecute actors in that event, obviously, especially when Nessel's walking away from Bill Schuette's investigation and then going forward with her own sort of gave it raises a lot of hackles for people.

And so I think that that's something that peopl have not necessarily forgotten.

I think the interesting thing about the hearing is that Mr. Cox was really off the rails.

I mean, he was going and going and Bill Schuette was playing nice guy sort of it was sort of the bad cop, good cop sort of thin between the two of them.

Yeah.

I think that Cox had kind of a harder line, was maybe leaning into a little bit more of how the what maybe the committee wa looking for in the conversation.

Whereas Schuette was kind of, you know, so we'r here to defend the Constitution.

Is this a forebear of things to come?

Is the head of the Department of Health and Human Services next up on these oversight committees?

Definitely.

I wouldn' it wouldn't surprise me at all.

I mean, that's I think that they'll probably Eagle has come up a lot, especially when it comes to permitting Auditor general potentially.

I know, especially if we're going to go back and try and relitigate the whole nursing home kerfuffle from from COVID.

And I hate to sound like that but I mean, there can definitely be a case made for this committee existing.

You know, to Simon's point, I was saying a second ago about how it's fine always to ask how much money ever was spent on any investigation.

But, you know, no one's reall looking to reporters for advice.

But what I'm going to say here is that there's a point that this committee can genuinely make.

However, if it really does just turn into basically a glorified Twitter thread of things I'm mad about today, it undercuts itself.

A witch hunt is the minority leader of the House has described it potentially.

One of the things that I'm going to be looking through over the next few years is stemming from 2022 is proposal one reform to term limits that now that we have, you know, both members of the Senate in the House, they can serve in these committees for up to 12 years, means that, you know, Michigan before this had the strictest term limits in the nation.

And because of that, you had people serving on these oversight committees who were only there for a couple of legislative sessions.

You know, they were babes in the woods.

Yes.

State government is a pretty Byzantine body.

There's a lot of differen offices, a lot different bodies, a lot of different programmatic spending.

And if you give oversight members enough time to really understand these and provide substantive oversight, what I'm interested in is whether we're going to see a shift in the role of the oversight committee to doing more substantive investigations with members that are more or better versed in th functioning of state government, because by the time they get their their feet underneath them, it's already time for them to leave what is under the last terms.

And then you're back.

What is the Department of Energy?

And I think I think political theater is always going to be a part of what the Oversight committee does, regardless of who's in power.

But the question is whether beyond that, we can see investigations that actually get at the heart of the functioning of state government, not necessarily independen bodies of the executive branch.

But look at oversight is an honored thing that the legislature has had for years.

And before term limits, you'd have chairperson who had been there for 20 years.

They knew more than the bureaucrats sitting across from them, which is a sort of kind of thing that you get to ask tough questions to get tough answers.

So adding the 12 years will change the dynamics, but it's a long haul.

Speaking of Hall, let's talk about.

Mr.. How did that happen?

Let's talk about Mr. Hall and Mr. Tate, what was going on in the House yesterday over all of this.

Can we explain this in 25 words or less?

I'm going to need more than 25 words.

But brutal is so.

So immigrant rights advocates have been trying to get lawmakers to pass legislation to allow undocumented folks the ability to get driver's licenses because they want to get work.

They got to get to safety work.

You know why anyone els would want a driver's license so that Bill died in the lame duck session, Democrats reintroduced that legislation this term.

The Republicans bring it to the floor for a vote yesterda and they know it's going to die.

Every single Republican voted against it.

They controlled the chamber, but it was this kind of test to what I think is also important to note is that Joe Tate was the speaker of the House last term.

Yes, he was controllin what was going up on the board.

This legislatio that would provide undocumented immigrants with driver's license never went up on the board because it was politically dynamite.

And yesterday it never had the vote.

It could not have passed.

Why didn't Matt Hall do it?

Sponsored the legislation.

In the new term, it's the proverbial thumbing your nose.

It's right there.

There's nothing else to say about it.

Would Matt Hall do that?

Matt Hall When you say that it is a deliberative body, it's something that Democrats said they wanted.

And so he wanted to help former House Speaker Joe Tate out by putting his bill on the board because it wasn't going to make it out of committeee And, you know, Tate voted Tate voted with Republicans on the road plan earlier in the week.

So he's like, I'll do you a solid man and put your put your bill up on the board.

Mr. Hall was having fun.

Well, I think what we've seen Hall do over and over again is sort of pose these Democratic unity tests.

You have this minimum wage and minimum wage and sick leave legislation watering down the court orde changes on both of those fronts.

Democrats divided.

You have the transgender athletes resolution.

Democrats vote for that.

You have the income tax cut.

Some Democrats vote for that.

So you're seeing all the ways in which Hall is kind o posing the question to voters.

If you give Democrats a majority back, what can you expect from them?

And it's not clear.

I mean, any sort of Democratic majority is probably going to be razor thin.

What could they do in the future?

Hall is sort of testing the water, I think, Clara hits the nail on the head here, because, you know, I think Matt Hall's exploiting the political moment to the fullest effect.

The Democratic Party right now has historic unpopularity among the American public, has not found their soul yet know they're going through an identity crisis and they don't know how to respond to the second Trump administration.

And Republicans have an easy out here.

They just need to wholeheartedly embrace everything that the Trump administration does, including the dissolution of the federal Department of Education.

Even if that could mean, you know, enormous complications for state government.

And so by sort of raking the Democrats over the hot coals, all he is doing, and as Clara pointed out, is the sort of sowing discord and trying to run these divisions open for a very good speaker, would take on the opposition like that divide and conquer.

Okay, here's the interesting debate.

The Democrats would argue, you know what, There is strength in the fact that we aren't united.

That's the argument that they can make.

But on the other side, Mr. Hall is saying, well, you have to be united in order to get stuff done.

So it's an interesting debate, but it's also a fundamental difference in the disposition between these two leaders between Joe Tate and Matt Hall.

Like could you ever conceive of Joe Tate taking up Josh Shriver's resolution condemning the Supreme Court for legalizing same sex marriage.

Not in a Ne York minute, It wouldn't happen.

And Shriver was given the opportunity to provide a fuller speech on Tate's bill yesterday.

Matt Hall came to reporters yesterday and said that he was doing Joe Tate a favor by putting his vote on the board and forcing all these Republicans in marginal districts to take uncomfortable votes.

I don't think we would have ever seen Joe Tate do anything like that.

Well, here's.

Never mind.

You know, here's the good news for everybody that doesn't like the legislature.

They're going on spring break.

Okay.

We aren't.

We'll be back next week with more off the record.

Thanks to our great panel for all being here today.

And thank you all for watching.

Catch you later.

Production of Off th Record is made possible in part by Bellwether Public Relations, a full servic strategic communications agency partnering with clients through public relations, digital marketing and issue advocacy.

Learn more at bellwetherpr.com.

For more off the record, visit WKAR.org.

Michigan public television stations have contributed to the production costs of off the record.