Michigan Democrats lay out different paths for implementing Proposal 1

Michigan Democratic lawmakers put forward dueling bills to implement voter-approved financial disclosure requirements for politicians, setting up a legislative battle between more modest and more expansive proposals as the end of year deadline to pass legislation looms.

Proposal 1 — the constitutional amendment approved with 66% of the vote in last year's midterm election — requires the members of the state Legislature to craft financial disclosure reports and filing requirements for themselves and those holding top statewide offices by Dec. 31.

Democrats took their first step to meet that deadline last week, but their proposals differ in key ways.

In the state Senate, they introduced a series of bipartisan bills and held their first legislative hearing during which the proposed disclosure requirements came under fire by government transparency advocates for not going far enough.

The next day, Democrats in the state House introduced their own set of bills. Compared to the Senate plan, theirs subjects more candidates and officeholders to financial disclosure requirements, expands proposed reporting requirements for spouses and imposes steeper penalties for late and inaccurate filings.

One day later, state Rep. Angela Witwer, D-Delta Township, who chairs the powerful House Appropriations Committee, introduced the main bill in a separate Democratic package in the state House that's identical to the Senate version. Witwer faces questions over potential conflicts of interest arising from her continued close ties with a consulting firm she founded with a state contract, according to a Detroit News investigation.

While those championing the more modest proposal may ultimately win out, at least one Democratic lawmaker involved would like to see his colleagues take additional steps to boost transparency in Lansing after meeting the Proposal 1 deadline.

"I think we have made a tremendous amount of progress by laying the foundation," state Sen. Jeremy Moss, D-Southfield, told reporters last week. "And we're not saying this is an end and patting ourselves on the back and moving on to the next issue."

Proposals split on politicians subject to disclosure

The Senate and Witwer bills would stick to the politicians voters decided to subject to financial disclosure reporting requirements when they passed Proposal 1: state representatives, state senators, governor, lieutenant governor, secretary of state and attorney general.

But House Democrats' more expansive proposal would expand that list to include members of the State Board of Education, Michigan State University's Board of Trustees, University of Michigan's Board of Regents and Wayne State University's Board of Governors.

Both packages would expand disclosure requirements to political candidates, going beyond Proposal 1. Democratic lawmakers in the state House also introduced a resolution last week urging the Michigan Supreme Court to require justices, Michigan Court of Appeals judges and others to make annual financial disclosures too.

Proposals would treat spouses differently

The Senate and Witwer proposal would require politicians to disclose stocks, bonds or other forms of securities they hold jointly with their spouse.

The alternative proposal includes that same requirement. But starting in 2028, it would also require politicians to disclose their spouse's and dependents' income, property they have ownership interest in and a description of stocks, bonds, commodities, futures, shares in mutual funds and other forms of securities they hold with a value of $50,000 or more.

Former state Rep. David LaGrand, D-Grand Rapids, who advocated for transparency bills when he served in the state Legislature, expressed deep concerns with legislation that would omit financial information from spouses and dependents.

"If you don't do parallel disclosure requirements for spouses and for dependents, you are making a hole in this legislation which will invalidate the will of the people, the intent of this legislation and it will be a hole that you can drive the Titanic through," he told the state Senate Oversight Committee last week.

Different penalties for late filings, inaccurate reports

The two legislative packages also propose different penalties for late filings, incomplete and inaccurate reports.

The Senate bills set the maximum fee for a late filing at $500 and a civil fine of up to $1,000 for knowingly filing an incomplete or inaccurate report.

Nicholas Pigeon, executive director of the Michigan Campaign Finance Network, said that proposed penalty seemed on the low end.

The second legislative proposal would impose a late filing fee that could exceed $5,000 and a maximum civil fine of $10,000 for knowingly filing an incomplete or inaccurate report.

Transparency in Lansing: Michigan lawmakers introduce disclosure report bills with Proposal 1 deadline looming

What happens next?

Both chambers of the state Legislature must pass identical bills and send them to Gov. Gretchen Whitmer's desk for her signature.

If lawmakers miss the end-of-the-year deadline for enacting legislation spelling out how politicians must file financial disclosures, any Michigan resident can sue the state Legislature and the governor in the Michigan Supreme Court to enforce the requirements of the constitutional amendment.

Whitmer said that she's open to lawmakers' efforts to go beyond the changes voters approved, but noted that they have a duty to at least take legislative action to implement exactly what Proposal 1 requires by Dec. 31.

"Now is that the whole picture of what we can and should do under the law? No, I think it's a floor. But we've got to make sure that we at least meet that minimum before the end of this year's session days and that is quickly coming upon us," Whitmer said at a Michigan Press Association event in Lansing last week.

Contact Clara Hendrickson: chendrickson@freepress.com or 313-296-5743. Follow her on X, previously called Twitter, @clarajanehen.

This article originally appeared on Detroit Free Press: Michigan Democrats propose two financial disclosure packages