Oct. 13, 2017 – CNS Budget

Oct. 13, 2017 — Week 6

To: CNS Editors

From: David Poulson and Sheila Schimpf


For technical problems, contact CNS technical manager Tony Cepak at (517) 803-6841 or cepak@msu.edu.

For other matters, contact Dave Poulson: poulsondavid@gmail.com;

Here is your file:

USEDCARS: Attention business editors. Sales of used cars and trucks in Michigan are rising, thanks in part to more vehicles coming off leases. They’ve been increasing for the past five years and show no signs of slowing. Unlike other states, Michigan sales of new and used vehicles tend to be less cyclical. We talk to dealers in Traverse City and Cheboygan and an executive with the East Lansing-based Michigan Automobile Dealers Association. By Carl Stoddard. FOR CHEBOYGAN, SAULT STE. MARIE, TRAVERSE CITY, LEELANAU, LANSING CITY PULSE, GRAND RAPIDS BUSINESS AND ALL POINTS

CRANE: Some lawmakers want to reverse 100 years of conservation and allow hunting of Michigan’s sandhill cranes. The move comes as hundreds of the 5-feet tall birds are expected to land at the  annual CraneFest on Big Marsh Lake in Bellevue. A Cedar Lake representative recently introduced a resolution asking the Natural Resources Commission, whose chair is from Marenisco, to add them — with a 6- to 7-foot wingspan — to a list of  game species, and to seek U.S. Fish and Wildlife Service approval for a hunting season. Cosponsors include legislators from Hudsonville, Grant, Manton, Walker, Clare and Lake City. Bill passed committee. Supporters say that the birds damage crops, particularly freshly planted corn. Conservationists say the birds still require protection. By Jingjing Nie. FOR MARQUETTE, SAULT STE. MARIE, HOLLAND, LUDINGTON, STURGIS, THREE RIVER, GLADWIN, OCEANA, ALCONA, MONTMORENCY, BAY MILLS, CHEBOYGAN, PETOSKEY, TRAVERSE CITY, PETOSKEY, CADILLAC, CRAWFORD COUNTY, GREENVILLE, BIG RAPIDS, MANISTEE, LAKE COUNTY, HERALD-REVIEW AND ALL POINTS

W/CRANEPHOTO: Sandhill cranes can grow up to 5 feet tallwith a wingspan of up to 7 feet. Credit: https://pixabay.com/en/sandhill-crane-bird-ornithology-1833587/

ORANGESNOW: A Plainwell company is turning orange traffic barrels into surfaces to ski on. It gives ski resorts, including Caberfae, Crystal Mountain and Caberfae, a jump on the season, and homeowners could also establish a small hill in their backyards. But don’t count on it as a hedge against global warming. By Stephen Olschanski, FOR CADILLAC, PETOSKEY, GRAND RAPIDS BUSINESS, TRAVERSE CITY AND ALL POINTS.

w/ORANGESNOWPHOTO1: A Plainwell company, mSnow, is turning orange traffic barrels into artificial skiing surfaces for use in backyards and ski resorts. Credit: mSnow

and ORANGESNOW PHOTO2: A Plainwell company, mSnow, is turning orange traffic barrels into artificial skiing surfaces for use in backyards and ski resorts. Credit: mSnow

NOSTRICTER: For the third time in six years,lawmakers are trying to prevent state agencies from creating rules tougher than federal regulations. They back a bill that would allow only the Legislature to do that, unless there are exceptional circumstances. It would apply to rules that regulate things as diverse as business, pollution, manufacturing. Supporters say stricter rules put Michigan companies at an economic disadvantage. Critics say federal rules should be minimum requirements and states should be able to approve stricter regulations. We hear from Midland and Rockford senators. By Kaley Fech. FOR ALCONA, LANSING CITY PULSE, GRAND RAPIDS BUSINESS AND ALL POINTS

MEDICAIDLEAD: Michigan received $24.8 million in Medicaid funding to abate lead- contaminated buildings last January, the first state  to tap that source for lead cleanup. But a lack of contractors, awareness and reluctance to fill out paperwork has made it difficult to put those dollars to work. That has an impact in West Michigan, not just Flint. By Jack Nissen. FOR LUDINGTON, MANISTEE, HOLLAND, BIG RAPIDS, TRAVERSE CITY, PETOSKEY, CADILLAC, GRAND RAPIDS BUSINESS, LANSING CITY PULSE AND ALL POINTS

GREENFRAUD: A fraudulent green energy scheme in Detroit cheated Chinese investors of $4,475,000, according to a federal indictment and Securities and Exchange Commission suit against the project promotor. He promised an eco-friendly “green energy” waste processing facility to recycle paper, process other waste and produce synthetic fuel. The Michigan Economic Development Corp. refused to authorize tax-exempt bonds for the project. Much of the money went to personal items such as Green Bay Packers tickets, his wife’s dental work and an $89,000 Cadillac. Investors who put in $500,000 each expected to qualify for U.S. visas. By Eric Freedman. FOR GRAND RAPIDS BUSINESS & ALL POINTS.

All those orange traffic barrels can have a second life

Capital News Service

LANSING — A Michigan company is recycling orange traffic barrels into an artificial snow surface that could combat fewer snowfalls in the future and is already turning backyards into ski slopes.

The Plainwell-based company called mSnow hasfound a home in at least two Michigan skiing hotspots – Mount Brighton and Crystal Mountain. Mount Brighton will showcase the product at its inaugural Fall Fest Oct. 21-22.

Whether the surface could address ski slope owners’ concerns over climate change is uncertain. Large-scale implementation of the mSnow surfaces has yet to begin and questions remain over its feasibility, said company co-owner, Luke Schrab.

The barrels, damaged by cars and beyond repair, are transformed into tiles and pieced together to make surface areas to practice skiing and snowboarding. They are used primarily by kids to practice in their backyards, but have begun to attract nationwide attention.

The average backyard setup costs between $200 and $300, Schrab said. To build a setup down a hill would cost a substantial amount. Also the surface isn’t for beginners or intermediate skiers. Larger slopes made of the surface become a bigger safety risk.

Simple falls on the surface can cause scrapes, he said. An entire slope of the surface would require more protection

“Even though a lot of areas are not installing it to be able to ski down a slope, there are little ways they use it,” Schrab said. One is mSnow’s development of tubing lanes to allow inflatable tubes to slide down slopes in the summer. Places that have instituted tubing lanes in the past include Breckenridge in Colorado and Brian Head in Utah.

Climate change could increase the demand for artificial surfaces.

But artificial surfaces are not an option in the foreseeable future as a replacement for snow as the ski industry is still alive, said Michael Berry, president of the National Ski Areas Association.

Ski areas across the country have installed artificial surfaces for summer training and on a small scale at resorts but they’re not needed to replace a full slope, Berry said. “It’s not all doom and gloom in the industry.”

But large scale artificial surfaces could be useful because they don’t need much snow, Berry said.

The popularity of artificial surfaces has risen as a way to train and to combat less snow, he said.

Orange barrels are manufactured by private companies that rent them to construction companies with state  contracts. Instead of heading to the landfill, damaged barrels are bought by or given to mSnow by the companies that rent them to construction companies, Schrab said.

The barrels are cleaned, molded into tile pieces and an additive is applied to make them slippery, Schrab said.

Schrab and his brother competed across the Midwest in skiing competitions. To compete in inverted aerial events they had to train in the summer. After skiing on an artificial surface in Park City, Utah, they thought about developing their own surfaces.

“Those traffic barrels are a similar plastic to what gets used for ski surfaces,” Schrab said. “Normally, it is a polyethylene. There are other types, but that’s what the barrels are made of.”

Kids who crafted backyard practice setups from mSnow made them popular, Schrab said. Word of mouth at ski resort and trade shows prompted Mount Brighton and Crystal Mountain to pick them up.

Caberfae Peaks Ski and Golf Resort near Cadillac has implemented mSnow surfaces into its resort for liftoffs but has put more money into man-made snow operations, Caberfae general manager Pete Meyer said.

Lack of contractors slows lead removal from Flint and other Michigan homes

Capital News Service

LANSING — Since receiving $24.8 million from Medicaid to remove lead from contaminated homes almost a year ago, the Department of Health and Human Services has abated only 23 homes of lead in Flint.

Another 47 Flint homes are undergoing cleanup. So far, $660,200 of those Medicaid funds have been spent in Flint and another $730,500  spent elsewhere, state officials said.

It can take a long time to remove lead from a house—close to three to five months—but before  removal can happen, contractors need to be available. And there just aren’t enough.

“It’s the biggest impediment to spending those dollars,” said Tina Reynolds, the health policy director of the Michigan Environmental Council. “Lead risk assessors and contractors are in short supply. It’s related to us only having so much money to hire them so there was only a small pool of people willing to do the work.”

Michigan is the first state to receive Medicaid funding for lead removal. Some of it can be spent in communities other than Flint, which received nationwide attention for lead contamination in its drinking water.

To fully take advantage of that money and combat the shortage, the health agency has hired someone to help increase the number of lead contractors. The new workforce development coordinator is entrusted with finding those that could become lead contractors.

“His role is to really get out into communities, starting in Flint, and looking at who’s available in the community to take the training that may have a little bit of construction knowledge,” said Carin Speidel, the Lead Safe Home Program manager. “It’s going to be a big undertaking because it’s not an overnight process.”

The reasons for the shortage date back to the recession in 2008, when many contractors couldn’t find work and began finding jobs elsewhere.

“The industry is maxed out in terms of its capacity,” Speidel said. “It’s a nationwide issue.”

Lead-removal services include paint, walls and water lines. Reynolds says there is a disconnect between the program and eligible residents. They may not know about program, or they don’t want to do the paperwork. Sometimes there’s a language barrier as well.

Toeducate people about the program and the dangers of lead in general, the state is taking steps to reduce confusion.

“So people are now going door to door to encourage people to get tested,” she said.

So far, 190 eligible people have enrolled in the Medicaid program. One hundred and fifty of them have had tests conducted on their homes.

While most of this money would go to Flint, there’s $6 million available for consortiums and local health departments that could providet services outside of Genesee County, including West Michigan.

It’s a welcome source of money, said Paul Haan, the executive director of the Healthy Homes Coalition of West Michigan, but there are problems with getting it to people after his coalition receives it.

People are used to a lot of restrictions when it comes to getting federal housing funds from the U.S. Department of Housing and Urban Development, Haan said. There isn’t a lot of confidence the funds will be easily accessible. But Medicaid money is much easier to get.

Haan’s coalition oversees some of the hardest-hit places for lead poisoning like Kent County, which found more than 6 percent of its children under age 6 testing positive for lead poisoning in 2016. The Healthy Homes Coalition has applied for $1.5 million from the Medicaid fund.

Health and Human Services received six applications from consortiums for the abatement money and will announce its awards in late Novemberd.

 Muskegon County, which has also applied for funds, struggles with even finding the opportunity to tell people about the services.

“A lot of the time, they will not let folks in their house to even provide education,” said public health education supervisor Jill Keast, of Muskegon County. “They may not want you to see their living conditions, or they may worried about (Immigration and Customs Enforcement) and deportation.”

Muskegon County also has one of the highest lea -levels in children under the age of 6, at 4.3 percent. Keast says she likes it that more money is coming into the state, but says it’s still not enough.

“Flint should be a priority., We understand that and I do appreciate they need the funding right now,” she said. “However, it’s not helping our communities. Putting all your resources toward Flint doesn’t eliminate the issue of lead in other areas.”

Proposed bill would prevent creation of rules more strict than federal regulations

Capital News Service

LANSING – Some Republican  lawmakers want to prevent state departments from creating rules that are tougher than federal regulations.

They’re backing a bill that would allow only the Legislature to do that unless there are exceptional circumstances. The bill, introduced by Rep. Triston Cole, R-Mancelona, would encompass rules that would regulate sectors as diverse as business, the environment and manufacturing.

“This is a good bill with a good purpose,” said Jason Geer, the director of energy and environmental policy for the Michigan Chamber of Commerce. “It will help ensure Michigan is not overregulated.”

It’s the third time in six years that the legislation has been pushed. And opponents fear this time there may be enough political will to pass ith.

The Michigan Environmental Council questioned why lawmakers would want to take away the governor’s power and put it in the hands of the federal government.

“Why should we demote the governor and his ability to protect Michigan?” said James Clift, the policy director for the council.

Clift said the bill would give the decision-making power to the Trump administration. He said this would directly impact quality of life in Michigan, especially  considering the federal government’s lowering of its own regulations.

Supporters of the bill say that’s good because it will require state departments to show  there really is a need for a rule that is more strict than federal regulations.

Geer said the bill would prevent state departments from doing whatever they want.

”It’s not an outright ban,” he said. “Anytime they feel the need to exceed federal standards, it just requires them to explain it and demonstrate a need for it.”

But critics fear the bill will force the state to be reactive instead of proactive.

“The level of convincing that will be needed to exceed the federal standards is a very high bar,” said Charlotte Jameson, director of government affairs at the Michigan League of Conservation Voters. “That means there will only be rules in times of crisis.”

Geer said many of the rules in Michigan that exceed federal standards relate to environmental laws, and the bill shines a light on that.

He said it would force state departments to prove why they are necessary. That would help businesses because they wouldn’t have to meet standards significantly higher than the federal level, he said.

The Michigan League of Conservation Voters says the standards set by the federal government are a minimum requirement all states must be at or above.

“We feel the federal standards are a floor, not a ceiling,” Jameson said. “The rules don’t account for unique states.”

The Michigan Environmental Council agrees, Clift said.

Officials at both environmental groups say their biggest concerns relate to the Great Lakes.

“Michigan is the Great Lakes State,” Clift said. “This would undermine the ‘Pure Michigan’ campaign because we wouldn’t be able to create stricter rules to protect the lakes.”

Stricter rules are needed to protect the lakes, Jameson said.

“The Great Lakes need forward-thinking protection,” she said. “We need flexibility to go beyond federal standards.”

This is not the first time a similar bill has been proposed. Gov. Rick Snyder vetoed one in 2011. And in 2016 one cleared the House but never made it out of the Senate.

Sen. Jim Stamas, R-Midland, said he thinks the bill will pass in the Senate this year. He sits on the Oversight Committee that approved he bill, and he supports it.

“It does present some challenges, but the bill has great intentions,” Stamas said. “This is a positive discussion to have.”

One challenge could be protection of wetlands, Stamas said. Michigan is one of only two states that administers the federal wetland program. There is a lot of support for keeping wetlands under state control, he said.

Clift said he is concerned the governor may sign the bill this time because Snyder has not made a statement in opposition to it.

The governor isn’t saying. He’ll evaluate the final version if and when it reaches his desk, said Tanya Baker, the deputry press secretary in the executive office of the governor.

Clean Water Action members and Plainfield Township residents gathered at the Capitol on Oct. 10 to oppose the bill and highlight contaminated drinking water in that Kent County community.

That contamination was caused by Wolverine Worldwide, a footwear manufacturer.

Sean McBrearty, the campaign organizer of Clean Water Action, said the bill threatens public health because the Department of Environmental Quality would be unable to more strictly regulate contamination in drinking water.

Sen. Peter MacGregor, R-Rockford and who represents Plainfield Township, issued a statement saying the bill was not created in response to water contamination there.

“This bill was not introduced or approved by the Senate Committee on Oversight in response to the current situation, nor can it be retroactively applied to the ongoing issue in Plainfield Township,”  MacGregor said.

The bill passed 57-50 in the House in May. It was reported from the Senate Oversight Committee on Oct. 5. It’s unclear when the Senate will take a vote on the bill.

MacGregor has asked the Senate to pause the bill, according to McBrearty. MacGregor could not be reached for comment.

Sandhill cranes could be hunted if legislators get their way

Capital News Service

LANSING — Some lawmakers want to reverse a hundred years of conservation and allow hunting of Michigan’s sandhill crane.

The push comes as the cranes — by the hundreds — are expected to land at the 23rd annual CraneFest on Big Marsh Lake in Bellevue at dusk Oct. 14-15. The CraneFest celebrates the big birds in art and offers educational materials.

Rep. James Lower, R-Cedar Lake, recently introduced a resolution asking the Natural Resources Commission to add the birds — some as big as 5 feet tall and with a 6- to 7-foot wingspan — to a list of Michigan game species, and to seek U.S. Fish and Wildlife Service approval for a hunting season. The resolution was passed in the House Natural Resources Committee Committee.

Lower said many of his constituents complain that the birds damage crops. They favor freshly planted corn.

But conservationists say the birds still require protection. The Michigan Audubon Society and the Kiwanis Club of Battle Creek sponsor CraneFest at the Kiwanis Youth Area in Bellevue, overlooking Big Marsh Lake. The event promotes crane awareness and provides optimal viewing of hundreds of cranes as they land for a rest on their way south.

The Department of Natural Resources reports a 10.5 percent annual increase in Michigan’s sandhill crane population from 1966 to 2013. The Nongame Wildlife Fund recently found 805 breeding pairs in the state, the DNR reported.

The  Fish and Wildlife Service reports that sandhill crane hunting is allowed in Alaska, Arizona, Colorado, Idaho, Kansas, Kentucky, Minnesota, Montana, North Dakota, New Mexico, Oklahoma, South Dakota, Tennessee, Texas, Utah and Wyoming.

Farmers with damaged crops can apply for permits to hunt them from the Fish and Wildlife Service. But even with a crop damage permit, farmers cannot eat what they kill, Lower said.

“I think it is sad and wasteful. It would make a lot of sense to be able harvest the meat,” Lower said.

The Michigan United Conservation Clubs, which represents hunters, supports a hunting season.

“Hunting is a valid and preferred way of wildlife management. We would like to see hunters have the opportunity to manage the population,” said Amy Trotter, the deputy director of the organization.

The birds were once rare in Michigan but their population has recovered.  

Julie Baker, director of the Michigan Songbird Protection Coalition, said, “The sandhill crane has been protected as a non-game species for a hundred years, and we hope to remain that way,” said

The bird is native to Michigan but was hunted to near extinction, Baker said.

Hunting them was banned nationwide in 1916 when they verged on extinction. By the 1930s, only 50 breeding pairs lived in Michigan, Minnesota and Wisconsin.

Because they reproduce very slowly, it took several decades for the birds to recover, Baker said. A pair usually hatch one or two chicks each year.

The increase in population in recent years is because the crane is protected as a non-game species. For the first time in many decades the population has stabilized but is still vulnerable, Baker said.

“There is no good reason to recreationally hunt sandhill crane. There are no benefits to anyone,” she said.

Farmers don’t have to kill them, Baker said. Most of the damage is done in the first three weeks after corn is planted and chicks have hatched. Farmers can apply a product that makes crops taste bad to the birds.

The issue has not come before the state Natural Resources Commission which sets hunting seasons. The DNR only monitors the population, said Ed Golder, the agency’s public information officer.

John Matonich from Marenisco, the chair of the Natural Resources Commission, said, “There is no initial discussion on that yet. If there is an interest, we will look into that, and we will work with the wildlife division to see their recommendation and options then decide.”

The resolution is co-sponsored by Reps. Roger Victory, R-Hudsonville; Tom Barrett, R-Potterville; Triston Cole, R-Mancelona; Scott VanSingel, R-Grant; Jason Sheppard, R-Temperance; Michele Hoitenga, R-Manton; Rob VerHeulen, R-Walker;  Jason Wentworth, R-Clare;  Gary Howell, R-North Branch; Daire Rendon, R-Lake City; and Tim Sneller, D-Burton.

The resolution awaits House action.

Major recycling scam ends in indictment

Capital News Service

LANSING — A bogus scheme to build an eco-friendly “green energy” waste processing facility in Detroit defrauded lenders and investors — including Chinese investors hoping to qualify for U.S. visas — of $4,475,000, according to a federal grand jury.

Project promoter Ronald Van Den Heuvel promised the victims that his Green Box-Detroit would build and operate a facility to recycle paper, process other waste and produce synthetic fuel, the indictment charged.

He also sought approval from the Michigan Economic Development Corp. (MEDC) to issue $95 million to $125 million in tax-exempt bonds toward the project’s $200 million price tag, legal documents said.

In a related civil suit against Van Den Heuvel and Green Box-Detroit, the Securities and Exchange Commission (SEC) said, “He claimed that he had developed a breakthrough recycling process that could turn post-consumer waste into usable products. He represented that the Green Box process would be both environmentally friendly and profitable, and would allow Green Box-Detroit to repay investors.”

But it was a scam because Van Den Heuvel never acquired the promised facility or equipment and used the money for other purposes, the indictment said.

The Detroit scheme was disclosed in a broad indictment accusing Van Den Heuvel of fraudulently obtaining more than $9 million in investments and loans in Wisconsin and Michigan between 2011 and 2015. He promised to “turn post-consumer waste from sources like fast food restaurants completely into usable consumer products and energy,” the U.S. Attorney’s office in Milwaukee said in announcing the indictment.

“As represented by Van Den Heuvel, the Green Box business plan was to purchase the equipment and facilities necessary to employ a proprietary process that could convert solid waste into consumer products and energy, without any wastewater discharge or landfilling of byproducts,” the indictment said.

Van Den Heuvel, who lives in De Pere, Wisconsin, diverted more than $3.9 million of the $9 million for personal uses, the indictment and SEC suit said. Among them: $44,000 for Green Bay Packers football tickets; $57,000 for court-ordered support for his ex-wife; $89,000 for a new Cadillac Escalade; $16,570 for his children’s private school tuition; and $33,000 for his wife’s dental work.

He also falsified financial statements that “grossly inflated his personal wealth and his companies’ assets,” the indictment said.

His defense lawyer, Robert LeBell of Milwaukee, didn’t respond to requests for comment.

The primary victims of the Detroit project were nine investors from China who poured $4,475,000 into the failed endeavor. They’d hoped to become permanent residents — green card-holders — by investing at least $500,000 each under the U.S. Citizenship and Immigrant Services EB-5 Immigrant Investment Program.

Van Den Heuvel worked through Green Detroit Regional Center, which is owned by a Georgia law firm that is authorized to operate in Wayne, Livingston, St. Claire, Lapeer and Macomb counties, court documents said. The center finds “foreign clients, mainly from China and South Korea, to invest in large alternative energy projects,” according to its website.

The Green Box-Detroit project was portrayed as creating 35 direct and indirect jobs per each Chinese investor.

“Green Detroit Regional Center promoted the EB-5 investments in Green Box Detroit based on Van Den Heuvel’s representations,” the SEC suit said. It said the chief executive officer of the Green Detroit Regional Center, Georgia lawyer Simon Ahn, marketed the project to investors through immigration consultants in China.

Neither Ahn nor Green Detroit Regional Center have been charged or sued by the SEC.

Ahn said, “If the charges are true, it is completely shocking to learn about the extent that Ron Van Den Heuvel hid the truth from me,” the center and investors.

“All of us visited the plants in Wisconsin many times, including the potential site in Detroit, and everything checked out fine. All the financials from a recognized accounting firm indicated that everything was proceeding on track, Ahn said.

The SEC suit said Van Den Heuvel falsely told investors that the MEDC had approved tax exempt bonds for the project. However, the MEDC rejected the request after discovering five tax liens, one construction lien, two state tax warrants, four civil judgments and three civil lawsuits, according to court documents.

“Van Den Heuvel did not satisfy MEDC’s concerns. He did not provide additional information to the MEDC, and did not provide a satisfactory explanation for the issues that it had raised,” the SEC suit said.

MEDC vice president of marketing and communications Emily Guerrant said “Yes, they did approach us. No, we never engaged with them.”

Ahn said it is likely that a receivership will be established to help Chinese investors recoup their money. He said it is “hard to determine at this point” whether they will qualify for green cards.

The grand jury accused Van Den Heuvel of wire fraud and illegal financial transactions. If convicted, he faces a maximum penalty of five years in prison and a $250,000 fine. In addition, the federal government is seeking to recoup the proceeds of the alleged fraud.

Earlier this month, Van Den Heuvel pleaded guilty under a separate 2016 indictment in a bank fraud conspiracy case. Charges against his wife and a bank loan officer in that case are still open.

Used car sales rise as leases expire

Capital News Service

LANSING — Sales of used cars and trucks in Michigan are rising, thanks in part to more vehicles coming off leases.

For the past five years, sales of used vehicles in the state have been speeding up and still show no signs of slowing, said Terry Burns, executive vice president of the Michigan Automobile Dealers Association, which is based in East Lansing and represents more than 650 new-vehicle dealerships.

Unlike in some other states, in Michigan sales of new and used vehicles tend to be strong and less cyclical because of the state’s long-standing ties to the auto industry, Burns said.

“We’re the auto capital,” he said. “People like cars. People understand cars.”

People in Michigan have been buying more used vehicles as more cars and light trucks come off leases, he said, a trend that started around 2013.

Leasing was a popular option for new-car seekers until 2007 or 2008 when the nation  plunged into a recession, he said.

“Leasing was just about nonexistent” in those difficult financial times, he said. “Banks were under extreme scrutiny. The banking decision was to cut down on leasing at that time.”

But as the recession eased, starting around 2012 or 2013, banks became more willing to offer automobile leases and leasing once again became a popular option, he said.

Now, those leased vehicles are coming back to dealerships and are available  for sale as used vehicles.

“It creates a little bit of a cycle. That’s why you’re seeing more used cars on the market,” Burns said.

When it comes to auto sales, he said, Michigan is a little different than the rest of the country.

“We don’t have the real highs and lows in sales,” he said. “We don’t normally follow the U.S. averages. We’re never seeing extreme swings.”

At the Fernelius dealership in Cheboygan, used vehicle sales are strong, said Travis Vizina, the pre-owned sales manager.

“We’re having a good year. August was a record month,” said Vizina, whose dealership sells Toyota, Chrysler, Dodge, Jeep and Ram vehicles.

He said used vehicle sales tend to be “a little bit of everything.” The dealership sells cars coming off leases, as well as other used newer and older model vehicles, and the mix includes cars, trucks and sport-utility vehicles, he said.

Sales of used cars have been on the rise at the Serra Traverse City dealership, said Jerry Zezulka, its executive manager.

The dealership, which sells seven new-car brands, was acquired by the Serra Automotive group, headquartered in Grand Blanc, in 2015. It has seen used car and light truck sales increase since that time, he said.

“There’s a need for used cars,” he said, and many of the used cars and trucks the dealership sells were previously leased.

In Sault Ste. Marie, vehicles coming off leases are popular with buyers as well, said Craig Stump, used car sales manager at Rodenroth Motors Inc., a Buick, Chevrolet and GMC dealer.

“We’re in north country, so we sell of lot of SUVs,” Stump said.

Four-wheel-drive pickups also are popular and expected to be even more in demand as winter approaches, he said.

But while sales of used cars are up around the state, the number of used car dealers is not.

“There has not been any real increase or dramatic change in the number of used vehicle dealer licenses” in Michigan, said Fred Woodhams, the communications director for the Michigan Secretary of State.

“In fact, over the past five years, there’s been a small decrease.”

Currently there are 3,615 licensed used vehicle dealers in the state, down from  3,914 in 2012, Woodhams said.

The number of new car dealers in the state also is falling. There are 1,229 new car dealers, down from 1,304 in 2012, according to the Secretary of State.

Manheim Inc., an auto auction company based in Atlanta, said used vehicle sales at franchised U.S. dealerships last year rose for a seventh year in a row.

“We are now at that point in the automotive cycle where percentage gains in used vehicle sales start to exceed those of new vehicles,” Manheim said on its website. “That’s what happened in 2016, and it will likely occur again in 2017.”

Nationwide, dealers are benefiting as more cars and truck come off leases, “which means that quality used vehicle inventory will literally be driven to their door,” Manheim said.

Edmunds.com, an online resource for automotive information, reported that used vehicle sales in the U.S. hit 38.5 million last year, up 0.6 percent from 2015.

Prices of used vehicles also rose last year, Edmunds said. In 2016, the average retail price for a used vehicle was a record $19,183, up 3.4 percent from the previous year.

“Financing was one place consumers found relief from higher prices. Interest rates were at a record low, coupled with slightly longer loan terms,” Edmunds said.

New vehicle sales in the U.S. rose to a record 17.5 million last year, up slightly from the previous year, according to J.D. Power and Associates, a marketing information services company.

Oct. 6, 2017 – CNS Budget

Oct. 6, 2017 — Week 5

To: CNS Editors

From: Perry Parks and Andi Brancato


For technical problems, contact CNS technical manager Tony Cepak at (517) 803-6841 or  cepak@msu.edu.

For other matters, contact Perry Parks: parksp@msu.edu


MICHIGAN JOURNALISM HALL OF  FAME: Nominations are open and due by Jan. 22, 2018. The induction ceremony is scheduled for April 15. For details on how to submit nominations, go to    


Here is your file:

LIQUORRULE: Some state officials want to eliminate a restriction that keeps liquor stores at least a half mile apart. They say it stifles competition. But opponents say it helps limit the number of stores in a particular area and protects small operators from getting squeezed out of business. A bill is moving through the Senate to keep the restriction in place. We hear from Grand Ledge and Wayland senators and Traverse City and Holland retailers. By Kaley Fech. FOR HOLLAND, TRAVERSE CITY, LANSING CITY LIMITS, GRAND RAPIDS BUSINESS AND ALL POINTS

MENTALHEALTH: Up to 64 percent of county jail inmates in Michigan have some form of mental illness. That has police scrambling to increase training to learn how to handle people who should be in mental hospitals instead of behind bars. Advocates say cooperation among agencies is at an all-time high. We hear from and about law enforcement and mental health experts in Oakland, Cheboygan and Kalamazoo counties, Clinton-Eaton-Ingham counties, AuSable Valley and Northern Lakes Community Mental Health, as well as the ACLU and Sheriffs’ Association. By Jack Nissen. FOR CHEBOYGAN, GRAND RAPIDSBUSINESS, METRO TIMES, LANSING CITY PULSE AND ALL POINTS

XMASTREES: While warm weather hangs on, Michigan Christmas tree growers are readying for another strong year of sales. Michigan ranks third in the nation in the number of Christmas trees harvested, supplying about 1.7 million fresh trees to the national market each year. We talk to growers from Mason and Manton, as well as the state and national growers’ associations. By Carl Stoddard. FOR CADILLAC, TRAVERSE CITY, CRAWFORD COUNTY, LANSING CITY PULSE, GRAND RAPIDS BUSINESS, LUDINGTON, LAKE COUNTY, CHEBOYGAN, ALCONA, GLADWIN, MONTMORENCY, PETOSKEY, MANISTEE, BIG RAPICS, HERALD-REVIEW AND ALL POINTS

W/XMASTREEPHOTO: The Windy Hill Christmas Tree Farm in Thetford Township, north of Flint, is one of many tree farms in Michigan. The state is the third-largest Christmas tree producer in the country, after Oregon and North Carolina. Credit: Carl Stoddard

CLEANUPCRITERIA: Emergency rules for how much of a hazardous solvent can be left in contaminated  groundwater are set to expire Oct. 27. But the Department of Environmental Quality is proposing a new limit for the chemical responsible for a high-profile groundwater contamination west of Ann Arbor. Other affected sites are in Oshtemo and Metamora townships. The change may be the first among a series of revisions to cleanup criteria for up to 300 other chemicals. We also hear from the Michigan Environmental Council, Michigan Petroleum Association and a Wayland senator. By Kaley Fech. FOR GRAND RAPIDS BUSINESS, STURGIS, HOLLAND, THREE RIVERS, METRO TIMES AND ALL POINTS

ENROLLMENT  — Public school enrollment in Michigan will decline by more than 5 percent by 2025, according to one projection. It is one of only nine states facing that fate. That means even less revenue for struggling schools, whose expenses don’t drop in proportion to lower student counts. Officials say not enough young people are staying and having children in Michigan. We hear from an Allegan Schools official. By Jack Nissen. FOR HOLLAND, GRAND RAPIDS BUSINESS& ALL POINTS

FARMRUNOFF: Federal officials are launching a two-year study to determine the best ways to convince farmers in Michigan and across the Great Lakes region to help fight water pollution. The pollution has created conditions ripe for excessive algal blooms that perennially appear in Lake Erie and other lakes and bays and threaten water quality. The culprit: nutrient-laden runoff, much of which comes from farmland. We learn about the Saginaw River Watershed and the Great Lakes Restoration Initiative. By Steven Maier. FOR GLADWIN, ALCONA, CHEBOYGAN, MARQUETTE, SAULT STE. MARIE, LEELANAU, PETOSKEY, HARBOR SPRINGS, OCEANA, TRAVERSE CITY, MANISTEE, LUDINGTON, HOLLAND, BAY MILLS, ST. IGNACE, GRAND RAPIDS BUSINESS AND ALL POINTS.

LYNX: It’s scientifically feasible for the National Park Service to reintroduce the Canada lynx onto Isle Royale after the predator’s disappearance eight decades ago, according to a new study. The island has a sufficient supply of the lynx’s favorite food, snowshoe hares, to support a population of about 30 lynx. They’d probably be imported from Ontario. Meanwhile, the Park Service is expected to decide the controversial issue of whether to bring more wolves to the island to replenish that animal’s population late this fall or early this winter. By Eric Freedman. FOR MARQUETTE, BAY MILLS, SAULT STE. MARIE, CHEBOYGAN AND ALL POINTS.

           w/LYNXPHOTO: Canada lynx. Credit: U.S. Fish & Wildlife Service

State set to renew groundwater rule for toxic chemical

Capital News Service

LANSING — Michigan’s emergency rules on how much of a particular hazardous chemical can be left in groundwater are set to expire Oct. 27, and that could create an environmental problem in the state.

To address the concern, the Department of Environmental Quality (DEQ) is proposing  a new rule with a limit of 7.2 parts per billion for 1,4-dioxane, which is responsible for a high-profile groundwater contamination west of Ann Arbor at the site of Gelman Sciences. The company used the chemical to manufacture medical filters.

If a new rule is not approved before the expiration, the limit will revert to 85 parts per billion, the level it was before the emergency rules went into effect in 2016, said Mitch Adelman, section manager for the remediation and redevelopment division of the DEQ.

The department is working with those responsible for the contamination to assure that human health and the environment are protected using the new, lower limit for contamination, Adelman said.

But Gelman Sciences isn’t the only site where the chemical has led to groundwater  contamination. The West KL Avenue Landfill in Oshtemo Township and the Metamora Landfill in Metamora Township have been contaminated by 1,4-dioxane as well, Adelman said, resulting in groundwater contamination.

The proposed new rules would continue the emergency rules that are set to expire and are before the Legislature’s Joint Committee on Administrative Rules.

Rep. Steven Johnson, R-Wayland, chair of that committee, said they will likely be approved.

“They’ll go into place about a week before the other ones expire,” he said.

The Michigan Environmental Council agrees with the proposed limits.

“It’s needed a lower number for years,” said James Clift, the policy director for the council.

The 1,4-dioxane rule is being considered separately so that standards do not revert to 2002 values that were in place before the 2016 emergency rules were implemented.

The 1,4-dioxane solvent is a clear liquid chemical that easily dissolves in water, and is considered likely carcinogenic to people, according to the Environmental Protection Agency. Long-term exposure can also cause kidney and liver damage, according to the DEQ.  

It’s used mainly when making other chemicals and can be found in paint strippers, glues and pesticides.

Although it can also be found in some makeup, lotions, detergents, bath products and shampoos, the amount found in these products is not likely to be harmful, even if used every day, according to the DEQ.

The DEQ’s proposed change on 1,4-dioxane may be the first of a series of revisions to clean up criteria for up to hundreds of other chemicals.  

The DEQ has been updating the toxicological, physical and chemical data for over 300 hazardous substances to help set new cleanup criteria, Adelman said.

He said there are more than 9,000 contaminated sites across Michigan.

That more extensive overhaul has met with various levels of opposition.

Although the Michigan Environmental Council supports an update, Clift said he believes the proposed rules fail to provide for new science as it emerges.

“We want the cleanup processes to use the best available science,” Clift said. “Unfortunately, this doesn’t provide a way to adjust the rules with the development of new science.”

That is a safety concern, he said.

“They’re supposed to regulate any substance that could cause injury,” Clift said. “The inability to update the rules without going through the time-consuming rulemaking process every time leaves them powerless to regulate new chemicals.”

The Michigan Petroleum Association said it worries the rules are too strict and will become a bigger hindrance than a help.

The association’s members have cleaned up more than 2,000 underground sites, said Mark Griffin, the industry group’s president. “All of that is in jeopardy of coming to a standstill.”

He said contaminated sites are currently cleaned to a level that won’t harm anyone; he believes the new criteria require a level for cleanup of contaminated sites that is unreachable.

“Our concern with the new rules is getting sites cleaned up and closed,” Griffin said. “We’d hate to lose all that progress.”

The Michigan Environmental Council said it’s been too long since the rules were revised.

The Michigan Chamber of Commerce said its members acknowledge the rules for cleaning up contaminated sites need to be updated.

“It’s improved from where it started, and it’s a step in the right direction,” said Jason Geer, the chamber’s director of energy and environmental policy. “Our members all recognize that it needed to be fixed.”

Michigan school enrollments projected to drop

Capital News Service

LANSING — A forecast for Michigan’s public school enrollment is bleak.

The National Center for Education Statistics recently predicted that public school enrollment in Michigan will decline more than 5 percent by 2025. It is one of only nine states facing that fate.

“Most districts have seen a decrease in enrollment over the past several years, granted some more than others, but this is widespread throughout our state,” said Chris Wigent, the executive director of the Michigan Association of School Administrators.

As of 2017, a little more than 1.3 million students are enrolled in  public schools. A 5 percent drop represents a loss of 65,000 pupils.

A school district receives a little more than $7,500 from the state per enrolled student. To put those numbers in perspective, if a district has 1,500 students and loses 30 children a year, that’s more than a $225,000 loss. But when losses pile up, it doesn’t mean other expenses can be cut, said Wigent.

When students leave, it doesn’t happen in only one grade, but across the entire kindergarten through 12th grade system, Wigent said. That means the number of teachers can’t necessarily be reduced. And expenses like transportation remain the same, he added.

“Quality education is one big part of the equation to continue to have our state move forward in a positive economic direction,” Wigent said. “There are many parts of that equation. They all have an impact on each other. It’s like a Rubik’s cube.”

And enrollment is a significant piece of that puzzle.

Enrollment doesn’t just fall for no reason. Michigan’s state demographer, Eric Guthrie, says it can be because of a fall in birth rate, an increase in deaths and migration out of the state.

Michigan hasn’t had an increase in its mortality rate, so that leaves the other two options.

”When we look at the structure of the population, we see fewer people of early childbearing years, so we’re going to see a decline of young persons,” Guthrie said. “If you look at the population structure of Michigan, you can see right after those college years, we have a reduction in populations in that 25-40 year age group.”

U.S. census figures show Michigan saw .7 percent of people ages 22-34 migrating from the state between 2014 and 2015.

But that’s only part of the puzzle. For those who stay in the state, Guthrie said many delay having children to complete their own educations.

“These things mixed together are driving down our school aid populations and will continue to do so for the near future,” Guthrie said.

The author of the study that cites those projections says the prediction model is usually fairly accurate. Those projections come from an analysis of the number of students enrolled in one grade, compared with the number of those enrolled in the grade below.

Michigan public school enrollment has been declining for some time. The National Center for Education Statistics reports its K-12 enrollment is at its lowest in five decades — from 2.1 million in 1971 to 1.4 million in 2016.

A reduction in enrollment also leads to a reduction in educators, Wigent said.

“The biggest impact that we’ve seen is a reduction of salaries for teachers, for support staff and administrators,” Wigent said. “And the outcome of that is we have this shortage of educators in our state.”

Allegan Public Schools has had a decline in enrollment for the last 10 years, and like much of the state has suffered a decline in teachers.

“Obviously, the biggest impact is going to be on our staffing levels,” said Allegan Public Schools Superintendent Kevin Harness. “If you budget-crunch for that long, you start to lose a lot of important people.”

Wigent says the state needs to pay attention to studies that show where the money for education is going. Those numbers will play an important role in how the state tackles future education reform.

“I think we’re going to need to look at those carefully and we’re going to have to prioritize and pay attention to how schools need to be funded,” Wigent said. “And really take a look at school reform in Michigan. It seems all the arrows point to that right now.”

Michigan passed major tax and school finance changes 20 years ago. As everyone knows, things have changed over the past 20 years, Wigent said, and it’s time to look at it again.