Capitol News
November 6, 2016
At this writing, the result of the November 8 election is not known, but whatever the outcome, it will be a relief to move on to governance issues.
CAMPAIGN MONEY
The Michigan Campaign Finance Network says the most active 150 political action committees (PACs) in Michigan have raised $43.19 million as of the last reporting period ending October 20, a 24 percent increase over where the top 150 PACs were at the same point in the 2012 cycle.
The total is the most the top 150 committees have raised in a two-year presidential cycle in the state’s history. It’s up 45 percent over where the top 150 PACs were as of October 20, 2004.
The United Auto Workers Michigan Voluntary PAC reported raising $1.1 million between July 21 and October 20. The West Michigan-based DeVos family gave $360,000 to the House Republican Campaign Committee. And a new PAC funded by Republican state senators raised $211,100.
Much of the spending has been focused on the battle for control of the Michigan House. The House Republican Campaign Committee (HRCC) has raised $3.9 million from January 1, 2015, through October 20, 2016, according to its campaign finance disclosures. The House Democratic Fund (HDF) has raised $2.8 million. They are the top two fundraising committees in the state, and both are raising more than they have in past cycles.
HRCC’s top donors included nine members of the DeVos family who each gave $40,000 to combine for $360,000. The Michigan Republican Party, Autocam president John Kennedy, his wife, Nancy Kennedy, and the Republican State Leadership Committee also each gave $40,000.
For HDF, its top donors included numerous leadership PACs and candidate committees connected to its members. The Bernstein PAC also gave $25,000, the International Brotherhood of Electrical Workers PAC Voluntary Fund gave $15,000 and former Sen. Gretchen Whitmer’s Whitmer Leadership Fund gave $10,000.
Gov. Rick Snyder’s Relentless Positive Action PAC raised $161,275 last quarter. The PAC spent $38,327. Of that, $16,000 was given to Republican State House candidates. Relentless Positive Action’s top donor was William Parfet, owner of the Northwood Group, who gave $125,000.
LEGISLATIVE NEWS
The Michigan Legislature has not met since September 22 and returns to elect leaders and have a few hearings on November 9 and 10. Both chambers return again for lame-duck session after Thanksgiving for at least 9 session days, and perhaps more.
Energy — An issue that has been debated in both the House and Senate for nearly two years without action by either chamber had a breakthrough on October 20 when the Michigan Chamber of Commerce indicated that it supports the newly revised version of the Michigan Senate’s energy bills, SB 437 and 438. This support will likely result in more legislative votes for the bills as they are considered by the full body in lame duck.
The House deliberations on its energy bills stopped in December 2015 and it is unclear just what course the energy issue will take in that chamber.
According to Gongwer News Service, there are three major changes to the Senate legislation from the previous proposed substitute:
- The previous version called for a utility building or acquiring a power plant generating 1,000 megawatts or more to go through the certificate of necessity process, more streamlined than making them go through the full integrated resource plan process the legislation would require. The revised version drops the threshold to any plant generating more than 225 megawatts.
- The previous version of the legislation would have granted automatic standing to alternative electric suppliers in a contested case before the Public Service Commission involving a new power plant involving at least 500 megawatts. The new version drops the threshold to 200 megawatts. This move would allow alternative suppliers to make a case to the PSC they could offer an alternative to a utility proposal.
- The previous version of the bill called for a renewable portfolio standard of 14 percent by 2018. The new version would set the standard at 15 percent by 2021.
A provision that utilities could purchase out-of-state renewable energy credits to meet the 15 percent threshold was not agreeable to health and environmental interests, making Democratic support somewhat questionable. They want renewable investments that actually take place in Michigan.
The proposed legislation also preserves the 10 percent choice of electric suppliers market but critics say there are not enough protections. The major utilities argue that alternative electric suppliers are not paying their fair share for upkeep of the electric grid that everyone uses and they want some financial contribution.
An amendment to be proposed by Sen. Peter MacGregor (R-Rockford) would, among other things, provide ratepayer protections and set up a process for the Michigan Public Service Commission to ensure ratepayers receive the best value when new electric generation is being brought online. However, electric choice advocates say the bills are not yet adequate. To support their claims, a recent poll they commissioned indicates that 62 percent of the public supports electric choice. School districts are heavy users of electric choice and will likely weigh in as the energy legislation moves through the process during lame duck.
Public Pensions — Amway President Doug DeVos recently announced that the conservative West Michigan Policy Forum’s top priority is to transition Michigan government employees to 401(k)-style post-employment benefits. The news immediately caused speculation on legislative movement on the issue, perhaps in the lame-duck session.
Although mostly aimed at the alarming unfunded accrued liability in most municipal pension funds, the initiative also would include the Michigan Public School Employees Retirement System (MPSERS) and other pension funds administered by Office of Retirement Services.
SB 102 sponsored by Sen. Phil Pavlov (R-St. Clair) would move future school employees to a defined contribution system. It was introduced in February 2015 and assigned to the Senate Committee on Appropriations with no subsequent action. Pavlov has long advocated ending the current hybrid system that gives new school employees some pension benefit and some defined contribution benefit. The hybrid system was created in 2012 along with elimination of school employee retiree health insurance for newly hired employees. A 2012 study determined that if public school employees were to be provided the same defined contribution plan as state employees receive, the added cost would be $13.6 billion over 30 years.
It appears that Governor Snyder’s administration opposes eliminating the school employee hybrid plan. Kerrie VandenBosch, Director of the Office of Retirement Services, was quoted as saying“The [school retiree] hybrid plan is 100 percent funded today, and it’s one-third less risky than a defined benefit plan.” She stated that the liabilities on the MPSERS system are related to the legacy defined benefit plan, which has already been closed and closing the hybrid system will not address the defined benefit plan unfunded accrued liabilities.
If Governor Snyder and succeeding governors keep up the current effort to appropriate funds for paying down the pension liabilities during the state budget process, the liability should be gone by 2038.
The major causes in the low percentage of public pension funding is the extreme economic recession of 2008 and the relatively slow recovery from it combined with an overly optimistic discount rate that has kept public employer contributions to the pension funds too low.
Re-employment for Retired State Firefighters — HB 5128 sponsored by State Representative Bruce Rendon (R-Lake City) that would allow retired state employees to contract with the Department of Natural Resources for wildfire suppression without suspension of their state pension passed the House in February and may receive approval by the full Senate and the Governor during lame duck. The Department of Natural Resources announced recently that it had sent crews to fight wildfires in Georgia, North Carolina and Virginia. Each two-person crew also took a fire truck.
Detroit Pensions — Attorney General Bill Schuette is seeking civil forfeiture actions against the 12 former Detroit school officials convicted of bribery. He is seeking forfeiture of pension contributions made by both the Detroit Public Schools and the state from the time the school officials began accepting bribes until they were either fired or retired.
State law allows for a public employee’s retirement benefits to be forfeited if they plead guilty or are convicted of a felony related to their public employment.
Courser-Gamrat Update — The Michigan House has reached a settlement with the fired aides of former House members Todd Courser and Cindy Gamrat. The lawsuit claimed they were fired for refusing to help the two legislators cover up their affair and other wrongdoing. The two aides said they reported the problems to Speaker of the House Kevin Cotter but were rebuffed and later retaliated against. If the matter would have gone to trial, details of the whole incident would have been a matter of public record. The terms of the settlement are not known.
FLINT WATER DEVELOPMENTS
Court Action — Michigan Court of Claims Judge Mark Boonstra is allowing parts of a Flint water-related lawsuit against the state to go forward, the first substantive ruling in the many lawsuits against the state about the Flint water crisis, according to plaintiffs’ attorney Michael Pitts. It is likely the state will appeal the decision, thus delaying discovery and depositions. The case is Mays v Snyder, a class action lawsuit involving 6,000 plaintiffs.
Judge Boonstra wrote:“Significant favorable weight must be given to the degree of outrageousness of the state actors’ conduct as alleged by plaintiffs, e.g., that various state actors allegedly intentionally concealed data and made false statements in an attempt to downplay the health dangers posed by using Flint’s tap water, despite possessing scientific data and actual knowledge that the water supply reaching the taps of Flint water users was contaminated with Legionella bacteria and dangerously high levels of toxic lead, and the well-settled legal precept that substantive due process protections apply to an individual’s right to bodily integrity.”
Fast Start — Flint Mayor Karen Weaver announced the third phase of her FAST Start pipe replacement initiative on October 31. It is expected to replace service lines to 788 more homes in Flint this fall. Phase 2 of FAST Start replaced lead-tainted service lines at 218 homes (as well as capping lines at three abandoned homes).
The state has provided $25 million to pay for pipe replacements through September 2017. An additional $170 million could come from Congress in December to aid in pipe replacement in Flint and other cities. It is estimated some 30,000 homes in Flint may have lead or galvanized steel service lines that need to be replaced.
EPA Inspector General — On October 20 EPA Inspector General Arthur Elkins issued a“management alert” in advance of his final report on Flint water contamination to advise the EPA of when it should use its power to issue emergency orders under the federal Safe Drinking Water Act. The report said the EPA had sufficient information about lead leaching into Flint’s water in June 2015 to conclude that Flint had not been adding corrosion control treatment to the water it was drawing from the Flint River. It was not until January 2016 when the EPA finally issued an emergency order taking command of the water crisis in Flint.
Joint Committee Report — The Joint Select Committee on the Flint Water Public Health Emergency issued its final report on October 19 urging consideration of more than 30 recommendations, among them changes to the emergency manager law, the creation of a citizen oversight commission and the investment in water infrastructure across the state.
The Report is the result of the six meetings and many of testimony provided to the joint committee appointed by Senate Majority Leader Arlan Meekhof (R-West Olive) and House Speaker Kevin Cotter (R-Mount Pleasant) earlier this year in the wake of the Flint water crisis.
Sen. Jim Stamas (R-Midland), chair of the joint committee, has stated that over a dozen of the recommendations are likely to get immediate attention.
TRANSITIONS
Former Michigan State Senator Earl Nelson, 79, who served the Lansing area during his eight years in the Legislature and former Rep. Jan Dolan, 89, who represented Farmington Hills after serving in city government for many years, have both died. Nelson died November 1 in Florida where he had retired after leaving state government. Dolan died the same day in Farmington Hills where she had lived virtually her entire adult life.
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