Capitol News

July 10, 2016

Before its summer break ending June 9, the Legislature passed the budget for next year, a “fix” for Detroit Public Schools, and a host of other bills. And there was plenty of news from the courts.

Court Nixes Pension Tax Challenge

Although retirees packed the courtroom at the Michigan Court of Appeals hearing in Lansing on June 7, retired teacher Tom Okrieís challenge to the pension tax went down to defeat again. Okrie retired in 2000, but in 2011 the tax-exempt status of his pension income was repealed in legislation proposed by Governor Snyder and approved by Republican legislators beginning in tax year 2012 for those born after 1945.

Okrie filed a class action lawsuit on counts of promissory estoppel, then later added counts for unjust enrichment, breach of contract under traditional contract principles, violation of the contract clauses of the state and federal constitutions, violation of the takings clauses of the state and U.S. constitutions, and violation of substantive and procedural due process. In its 11-page opinion, he COA denied all eight counts of Okrie's first complaint, his cross-motion for summary disposition, his motion to file a second amended complaint and his motion for class certification. The COA panel also affirmed the granting of summary disposition to the State of Michigan.

Judges David Sawyer, Joel Hoekstra and Kurtis Wilder signed the opinion in case No. 326607. Michigan SERA, some SERA chapters and individual SERA members have financially supported Okrieís lawsuit. Okrie attorney Gary Supanich has filed a motion for reconsideration and intends to file an application for leave to appeal to the Michigan Supreme Court.

Michiganís Budget for FY 2017

On June 27 the Governor signed the $16.1 billion education budget (SB 801, PA 249) for FY 2017. The bill provides $12.1 billion for K-12 school operations, including per-pupil increases from $60 to $120 per student; $39.8 million for the 15 public universities, and $4.4 million for community colleges.

Two days later at an event in Holland, he signed the omnibus $55 million budget for state departments and non-education major budget areas for the 2016-17 fiscal year, and supplemental appropriations for the current 2015-16 fiscal year.

Snyder issued no line-item vetoes in the bill (HB 5294, PA 268, immediate effect). He pointed out significant investments in Flint, Detroit, education, public safety, and the economy. Among the highlights of the budget was expanding Healthy Kids Dental to all children in all counties. Several larger investments Mr. Snyder proposed in February had to be omitted or reduced after projected tax revenues were less than expected. All six budgets during Mr. Snyder's time in office have been completed no later than June.

State Rep. Andy Schor (D-Lansing) voted No on the state budget bills, giving this explanation to his constituents:

. . . By failing to allocate $3 million to the “Heat and Eat” program ó which helps many of our vulnerable citizens to heat their homes during the winter ó Michigan will now be unable to leverage nearly $140 million in federal funds for the program. I was disappointed that this budget continues to utilize previously failed privatization funding for the Grand Rapids Home for Veterans and prison food services. The budget also did not include state funding for rape prevention and service programs for victims of sexual assault. Right now, only 33 of Michiganís 83 counties receive resources, yet these crimes impact all communities.

The final School Aid budget . . . gave the maximum funding increase to cyber schools, even though these schools do not have the same expenses as traditional brick-and-mortar schools. Additionally, in what I believe is a violation of the state constitution, this budget appropriates $2.5 million to non-public schools, including private religious schools, to pay for state mandated measures that traditional schools also pay for. Funding for our universities was lower than the governorís recommendations, and while community colleges received a 1 percent increase, it is not enough to keep pace with inflation.

The executive director of the Michigan Association of Schools Boards, Don Wotruba, told a coalition of education groups he will likely file a legal challenge to block the state aid to private schools as a violation of Michiganís constitutional provision barring parochiade.

Detroit Public Schools

After protracted negotiations, the Senate and Governor finally capitulated to the $617 million House plan for the Detroit schools. Assistant Democratic Floor Leader State Rep. Sam Singh (D-East Lansing) characterized the plan as

. . . an attack on the teachers, students and residents of Detroit and will do nothing to provide the needed assistance for this school district. . . [It] doesnít have enough funding in it to solve the debt problems. It still allows uncertified teachers to teach in Detroit Public Schools. It still requires the school principals to reapply for their jobs. And it still eliminates the Senate language creating the Detroit Education Commission, which would be responsible to decide which schools open and close. It requires closure of low-performing public schools, but gives charter schools a pass. These provisions are destructive to the education of Detroit students.

Gov. Snyder signed the bills on June 21. However, a group of parents and Detroit Public Schools board members filed suit in the Court of Claims challenging the DPS reform law. In Moore v. Snyder (COC docket No. 16-000153-MM), plaintiffs argue the state is prohibited from passing a law that allows only DPS and not other school districts to hire uncertified teachers and did not follow the requirements for passing a local act. Because the law singles out DPS, it is a local act, not a state act, and requires approval by two-thirds of the Legislature and by the voters of the district. Neither of those requirements was met, the lawsuit contends.

Flint Water Crisis Update

Flint-based engineering firm Rowe Professional Services hired by the state to analyze Flintís infrastructure issued a report saying it could cost up to $214 million to cure the water problems in the near future, including $80 million to dig up and replace roughly 10,000 lead pipes. That estimate far exceeds what the state is projecting.

In a letter dated June 16 noting that the federal emergency period and federal assistance is coming to an end soon, the federal Environmental Protection Agency issued a warning to the Governor and Flint Mayor Karen Weaver that there are a number of significant challenges to the long-term goal of reliable and sustainable clean drinking water for the city of Flint. It cited an oversized distribution system for current and projected water demand in Flint, which the EPA said could result in “water not moving through the system as originally designed, leading to water residing in pipes too long, potentially causing a loss of chlorine residual, which is a necessary barrier against pathogens.” The EPA also said the water treatment plant is not adequately staffed, operated or administered to “reliably deliver safe drinking water for years into the future.”

The state has so far appropriated $234 million to address the Flint water crisis. This yearís omnibus state budget includes $114.3 million in funding for Flint. That money will go for water filters, pipe replacements, assessments and therapy for affected children, and other much-needed services. $25 million was budgeted to replace lead service lines. Funding was provided to cover 65 percent of Flint residentsí water bills. And the state is spending $3 million to defend the state from Flint-related lawsuits with additional costs on the legal front projected.

On June 23 after months of testing of 200 homes where pregnant mothers or small children live and rated high risk because they have lead service lines or galvanized steel, federal EPA officials announced that the filters are doing their job and all people can and should drink filtered water. Activist Melissa Mays of Flint rising and Water You Fighting For called the announcement irresponsible.

Transitions

First-term State Rep. Julie Plawecki (D-Dearborn Heights) died suddenly of an apparent heart attack while hiking in Oregon on June 25. She was 54. The Governor has called a special primary on August 30 and election coinciding with the general election November 8 to complete Plaweckiís term ending December 31, 2016. Meanwhile, Eleventh District Democratic leaders have chosen Inkster City Councilmember Jewell Jones to replace Plawecki on the primary ballot for the term starting January 1, 2017. Mr. Jones, 21, who will almost certainly be elected given the Democratic nature of the district, would be the youngest legislator ever elected.

Eighth U.S. Congressional District Democratic candidate Melissa Gilbert of Howell, famous for her role in TVís Little House on the Prairie, announced in May she was withdrawing from the race for health reasons. However she has not officially contacted the Secretary of State Elections Bureau to provide supporting evidence for her late withdrawal and her name will still appear on the primary ballot. Democratic leadership in the district has chosen Suzanna Shkreli of Clarkston, an assistant Macomb County prosecutor, to replace Gilbert as a candidate. She may have to run a write-in campaign for the primary on August 2 and/or general election on November 8 if Gilbertís name is not removed. The current incumbent is Mike Bishop, former Republican State Senate Majority Leader.

State employee unions are again in negotiations with the Office of the State Employer this summer and fall for pay and benefits for the FY 2018 fiscal year since last yearís agreement was for only one year due to budget unknowns. The sides have until September 16 to request an impasse panel on any issues not decided in negotiations. Non-union state employees and limited-recognition organizations wanting to participate in wage discussions for 2017-18 have until September 2 to indicate their interest to the Civil Service Commission.

Teachers around the state who were required to pay 3 percent of their income into the Michigan Public School Employees' Retirement System or MPSERS for health benefits from 2010 to 2013 may receive that money back with interest, according to a published ruling from the Michigan Court of Appeals. The money held in escrow is about $550 million belonging to over 200,000 educators. The Governor wants to appeal the decision but Attorney General Bill Schuette has declined to take the case, saying he will appoint a special assistant attorney general to represent the state. The case is AFT Michigan v. State of Michigan, Nos. 303702, 303704 and 303706.

Detroit U.S. District Judge Linda Parker has issued a preliminary injunction against a newly enacted state law that bans companies from collecting employee donations for union campaign funds, but permits a firm to continue to collect donations for corporate campaign funds. She said the law,†PA 269 of 2015, violates the First Amendment of the U.S. Constitution by allowing corporations to continue collecting funds from workers for its separate segregated funds for political purposes, but not for the same types of funds for its union workers. The law thus discriminates against political speech, she said. The case is Michigan State AFL v. Ruth Johnson (USDC docket No. 16-11454).

MLive is reporting that if the Michigan House and Senate stick to their schedules this year, they will spend the fewest days in session since 2002. The House is slated to spend 80 days in session in 2016, and the Senate is slated to spend 83 days in session. That's a combined 163 days — lower than the combined 205-day average lawmakers have posted over the past 19 years, according to legislative records available online.

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.

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