Capitol News
October 2014
The Legislature came back from summer recess on September 9 and adjourned on October 2 to return to district work, i.e. campaigning and fundraising for the November 4 election.
November Ballot
On the ballot will be all state-wide offices (a U.S. Senate seat, Governor, Attorney General, Secretary of State, two full-term and one partial-term Michigan Supreme Court Justices, all education boards), all U.S. Congressional seats, all Michigan House and Senate seats, community college, local school district, county commission, two statewide ballot issues (wolf hunting) and any local ballot issues. You can find your own sample ballot at www.michigan.gov/vote. The absentee ballot application deadline is November 1.
AARP has published nonpartisan voter guides featuring positions from U.S. Senate, Congressional and Gubernatorial and other statewide candidates — in their own words — on critical issues including Social Security, Medicare, and financial security. View the guides at www.aarp.org/yourvote. The Citizens Research Council of Michigan has released an analysis of the two statewide questions appearing on the November ballot. View it at www.crcmich.org.
The Center for Public Integrity reports that as of September 27, Michigan had the third most money spent on ads in U.S. Senate races at $20.5 million, behind Georgia at $28.3 million and North Carolina at $29.6 million. According to the analysis, Republicans and supporting groups have purchased 20,000 ads with a cost of $10.7 million. Democrats and supporting groups have purchased 18,600 ads for $9.8 million.
In the gubernatorial air war, the Michigan Campaign Finance Network reports that Michigan’s gubernatorial candidates and their allies have spent $19.2 million for television ads about the candidates through September 29. MCFN expects that total to exceed $30 million by election day. On both sides, the candidate committees are spending less than the outside independent expenditure groups whose donors do not have to be revealed.
Short Takes
Another Pension Tax Bill — Michigan Rep. Martin Howrylak (R) introduced on September 10, 2014, HB 5796 to increase the state income tax personal exemption from $3,700 to $4,300, and reverse the provision of the 2011 income and business tax overhaul that partially eliminated some state income tax exemptions for pension income. This makes about a half dozen bills to eliminate the pension tax. None of these bills have had any hearings and since the cost in revenue would be in the range of $360 million, it would take a change in party control of the Governor’s office and both chambers to move this issue.
UAL New Reporting Requirement — SB 359 sponsored by Senator Darwin Booher (R-Evart) would add a new reporting requirement to the agenda of the annual May revenue estimating conference. The report would have to be from the State Treasurer, or his or her designee, regarding the unfunded accrued liabilities (UAL) and funded ratios of the State for pensions and other postemployment benefits such as health care and life insurance. The report would have to be based on the most recently published annual actuarial valuation report for the immediately preceding fiscal year, for each of the State’s pension and retiree health benefits systems, including the systems for state employees, public school employees, judges, State Police, and legislators. The Office of Retirement Services produces the data each year for each retirement system.
Another bill sponsored by Senator John Proos (R-St. Joseph) requires all budget bills to contain UAL and funded ratios of the state for pensions and other post-employment benefits. Both bills were reported out of the Senate Appropriations Committee and await floor action.
Great Lakes Water Authority — Spurred by the Detroit bankruptcy proceedings and ending 40 years of conflict between the city and suburbs over the Detroit water and sewer system, Detroit and its suburbs agreed on a deal for a regional water authority in early September after more than a year of negotiation. It will provide water and sewer system services to almost 4 million residents in eight counties covering nearly 1,100 square miles. A new six-member board includes two appointed by the Detroit mayor, one each by Oakland, Macomb and Wayne counties, and one by the Governor.
The deal provides for $50 million lease payment to the city each year and holds annual rate increases to 4 percent for a decade. The Great Lakes Water Authority will lease regional pipes and plants from Detroit, which will retain ownership and use the funds from the lease payments to rebuild its failing infrastructure. Detroit will maintain control of 3,000 miles of local pipes. If the city and the three counties approve the deal, there will be a 200-day due diligence period. A program to assist customers who don’t have the ability to pay is included in the agreement.
Anywhere from $500 to $800 million in bonds could be issued to help pay for the rebuilding of Detroit’s water and sewer system, which saw 2,000 water main breaks last year.
Updates
Okrie Case — The application for leave to appeal the Michigan Court of Appeals decision denying Thomas Okrie’s challenge of the constitutionality of the Court of Claims transfer was filed September 19. Response from the Attorney General is scheduled for October 14. Thereafter we wait for a decision from the high court as to whether it will grant or deny the application for leave to appeal. There is no timeframe for the court to issue a decision. The SERA Coordinating Council agreed to donate $500 toward a friend of the court brief in the case being organized and developed by appellate attorney Patrick Rose.
Aramark — The Department of Corrections food service contractor continues to be in deep water. It was discovered that the DOC waived the first $98,000 fine for contract violations. The latest scandal involves an alleged murder for hire plot that one of its employees initiated with a prisoner. The State Police and the Attorney General’s Office are investigating. Meanwhile, Aramark has announced that it is raising the amount of its entry-level pay in some areas of the state where there has been difficulty recruiting and it is adding training programs. Over 100 Aramark employees have been terminated from employment for various rule infractions. Governor Snyder hired the former Florida prisons director to do oversight of the Aramark problem.
Detroit Bankruptcy — The Detroit bankruptcy trial by U.S. Bankruptcy Judge Stephen Rhoades is ongoing. He will determine if the Emergency Manager’s plan to slash more than $7 billion in liabilities and reinvest $1.4 billion over 10 years to improve city services is acceptable.
Road Fix — A Road Fix has become campaign fodder but the Legislature has taken no action yet, some saying lame duck session after the election is more likely to produce more risk-taking in coming up with extra money to fund the Road Fix. President Obama issued a disaster declaration for the one billion dollars of damage to 118,000 households that the sudden August rainstorm produced in southeastern Michigan.
SERA Recent News — If you are a SERA member, you are eligible to receive SERA Recent News, a periodic e-mail about breaking news and media stories of interest to state employees and retirees. Write to michigansera@comcast.net, giving your name and chapter.
Editor’s note: Mary Pollock is the Lansing SERA Chapter and SERA Council’s Legislative Representative. She may be contacted at 1200 Prescott Drive, East Lansing, MI 48823-2446; Phone 517-351-7292; E-mail michigansera@comcast.net.
Return to top of page