Capitol News
November 11, 2018
With the mid-term election over, Michigan’s officeholders can get down to the business of governing.
TOP OF THE BALLOT
Turn-out — November. 6, 2018 saw the biggest turnout in Michigan for a mid-term election in 50 years. More than 4 million residents cast ballots — 4,308,781 according to the uncertified results on November 9. More than half the voting age population voted - 52 percent, according to the Associated Press. Beginning January 1, 2019, Michigan will go from a Trifecta Plus state in which all three branches of government including both legislative chambers are held by the same party to a somewhat divided government in which a minority party holds the Governorship.
Statewide Races — Democrat Gretchen Whitmer of East Lansing, the former Michigan Senate minority leader, bested Republican Bill Schuette of Midland, Michigan’s current Attorney General, by 9.5 percentage points. Though Schuette won 66 of Michigan’s 83 counties, Whitmer won urban and many suburban areas and improved Democratic performance in Republican majority counties compared to 2014 Democratic candidate Mark Schauer. Whitmer’s core messages concerned infrastructure — clean water and her “fix the damn roads” mantra — health care and eliminating the pension tax. Mr. Schuette’s core message was a “paycheck agenda” focused on cutting the state income tax. Exit polling indicates Whitmer garnered 59 percent of the women’s vote and 50 percent of the men’s vote in Michigan.
Newly elected Secretary of State Jocelyn Benson garnered 52.8 percent of the vote and Attorney General-elect Dana Nessel squeezed by with 49 percent of the vote. Current U.S. Senator Democrat Debbie Stabenow won re-election with a surprisingly skimpy 52.2 percent against newcomer Republican John James.
In the Michigan Supreme Court race, Republican-nominated incumbent Justice Elizabeth Clement and Democrat-nominated attorney Megan Cavanaugh won their races for the two available seats on our high court. The court will go from 5-2 Republican nominated to 4-3.
Democrats were able to sweep all 8 statewide education boards despite the lack of straight-ticket voting for the first time in 134 years. But the voter fall off was noticeable: in 2014, statewide votes for the Democratic and Republican candidates for the State Board of Education fell by 16.3 percent from the votes cast for the Democratic and Republican candidates for governor. This year, votes fell by 19.6 percent.
Congress — In federal Congressional races, the Democrats won two more seats in the U.S. House to create a 7 -7 U.S. House delegation from Michigan. In the 8th Congressional District, Elissa Slotkin ousted 2-term Republican Mike Bishop by just 13,074 votes according to the uncertified returns. In the 9th Congressional District, Andy Levin won the open seat previously held by Democrat Sander Levin. In the 11th Congressional District, Haley Stevens won an open seat currently held by Republican David Trott of Birmingham. Incumbents won in the 11 other Congressional races. Democrats received 50.7 percent of all Congressional votes to the Republicans’ 46.2 percent.
LEGISLATURE
The 100th Legislature, which runs during calendar years 2019 and 2020, will remain Republican controlled. The majority party appoints chairs and members of all legislative committees and controls what bills get considered by the full chambers. The majority party also controls the legislative budget process and sets the budget for the Legislature itself, awarding themselves more staff and resources than the minority party.
A Bridge Magazine analysis showed that despite picking up over half the votes cast in all state House and Senate races, the Democrats failure to win the House and Senate was largely because of gerrymandered districts drawn in 2001 and refined in 2011 to reshape the state legislature to Republican advantage.
House — All 110 seats in the Michigan House and 38 seats in the Michigan Senate were up for election. In House races, there were 43 open seats with no incumbent running. Eighteen members were eligible for re-election but decided to run for the Michigan Senate. A record 58 of the 110 seats had one or more female candidates running. Democrats needed to flip 9 seats currently held by Republicans to gain control of the House, but only gained 5 seats.
| 2017-2018 House | 2019-2020 House | ||||||
| Republicans | Democrats | Republicans | Democrats | ||||
| 63 | 47 | 58 | 52 | ||||
| Male | Female | Male | Female | Male | Female | Male | Female |
| 46 | 17 | 30 | 17 | 41 | 17 | 27 | 25 |
The Republican House Caucus elected Lee Chatfield of Levering as their nominee for Speaker of the House. At 30, he will be the youngest speaker in modern times. The Democratic House Caucus elected Christine Greig of Farmington Hills as the House Democratic Leader.
Senate — In the Senate, there were 26 open seats (a 68 percent turnover!) with 19 Republicans and 7 Democrats leaving because of term limits. The Republicans have had the majority in the Michigan Senate for 34 years and will continue that run for two more years. The Democrats needed to flip 9 seats to take the majority but only flipped 5 seats. Lieutenant Governor-elect Democrat Garlin Gilgrist will break ties of 19-19.
| 2017-2018 Senate | 2019-2020 Senate | ||||||
| Republicans | Democrats | Republicans | Democrats | ||||
| 27 | 11 | 22 | 16 | ||||
| Male | Female | Male | Female | Male | Female | Male | Female |
| 24 | 3 | 10 | 1 | 19 | 3 | 8 | 8 |
The Senate Republican Caucus has elected Mike Shirkey of Clarklake as Senate Majority Leader. Jim Ananich of Flint will remain the Democrat Minority Leader of the Michigan Senate.
Women — If Democrats had a good election day in Michigan, Michigan’s female candidates had a great election day. For the first time in Michigan history, the offices of Governor, Attorney General and Secretary of State will be filled at the same time by women. The most women ever will serve in the state Legislature: 53 of 148 — 35.8%. There will also be the highest number of women in the Michigan delegation to the U.S. House: 5 of 14 — 35.7%.
BALLOT PROPOSALS
All three statewide ballot proposals were approved by voters:
| Proposition Subject | Percent of Vote |
| Voter-initiated statute for recreational marijuana legalization, regulation, and taxation | 55.9 |
| Constitutional amendment to establish an independent citizen’s redistricting commission | 61.2 |
| Constitutional amendment to expand voting rights and procedures | 66.9 |
These laws will go into effect 10 days after certification of the vote by the Michigan Board of State Canvassers, usually in early-December.
Marijuana — Proposition 1 allows people age 21 or older to carry 2.5 ounces of marijuana in public as long as they are not on lands owned by the federal government or K-12 schools. Households are able to contain up to 10 ounces and 12 plants per resident, as long as the plants are not visible from outside. Smoking marijuana in public is prohibited, along with driving under the influence. Employers will still be able to drug test and penalize workers for marijuana use at their own discretion. The process of establishing regulations for its retail sale and issuing licenses will likely go into 2020. The measure will create a state licensing system for marijuana businesses and allow cities and townships to restrict them as some have already done for medical marijuana. Marijuana is still illegal on a federal level. Governor-elect Gretchen Whitmer has said she would consider granting clemency to jailed marijuana offenders.
Three other voter-initiated laws were adopted by the Legislature and did not appear on the ballot: prevailing wage repeal, minimum wage increase, and an earned paid sick time law.
Lame Duck battle ahead — On November 8, two bills were introduced to radically amend the minimum wage and paid sick time laws approved by both chambers in early September. Legislatively-adopted voter-initiated statues take a simple majority to amend, the stated reason the Republican majority adopted both measures in early September. If the proposed statutes would have gone to the ballot and passed, they would take a three-quarter majority to amend.
The minimum wage law, now PA 337 of 2018, raises the minimum wage to $12 per hour in yearly stages by 2022, ties the minimum wage rate to inflation, and brings tipped worker minimum wage up to regular minimum wage in stages by 2024. Restaurant owners and servers in highly-tipped work settings oppose eliminating the lower tipped-worker wage rate. SB 1171, introduced by Sen. Dave Hildenbrand (R-Lowell), would reinstate the tip credit for tipped restaurant workers.
The earned paid sick time law, now PA 338 of 2018, would require employers with 10 or more employees to provide one hour of sick time for every 30 hours worked up to 72 hours a year. Employees of small businesses, defined as employers with fewer than 10 employees, are allowed to accrue and use 40 hours of paid sick time per year. The Michigan Chamber of Commerce and the National Federation of Independent Business oppose the legislation. SB 1175, introduced by Sen. Mike Shirkey (R-Clarklake), eliminates several provisions related to presumptions against employers contained in the law. It also reduces the requirement of retaining records documenting hours worked and earned sick time taken by employees from three years to six months.
Both laws go into effect 91 days after adjournment of the 2018 regular legislative session or on or around April 1. Both bills to amend the laws have been referred to the Senate Government Operations Committee chaired by Senate Majority Leader Arlan Meekoff (R-West Olive). Republicans have stated they want to make the laws more business friendly, but a Democratic Governor with a veto pen starting January 1 puts pressure on the Republican majority to pass amendments during Lame Duck session — Tuesday through Thursday, November 27 through December 20. However, a 1964 Attorney General opinion states that an initiative petition enacted by the Legislature cannot be amended until the next legislative session but of course Attorney General opinions can be overturned by the courts.
Michigan SERA Coordinating Council endorsed both the minimum wage and earned paid sick leave proposals so we will be active in opposing changes to the laws during Lame Duck.
SURVIVOR PENSION BENEFIT
PA 335 of 2018 (HB 5653) signed July 2, 2018 amended the State Employees’ Retirement Act to align two assumptions used in the calculation of survivor benefit payments with current experience and future projections. A survivor benefit option (which provides reduced pension payments to both the retiree while living and to a designated survivor after the death of the retiree) is designed to be actuarially cost-neutral compared to the cost of a non-reduced pension provided to a retiree who does not choose a survivor benefit option. The calculation of the survivor benefit payment is predicated on various actuarial assumptions.
The new law eliminates the use of a projected 8 percent interest rate of return on the pension fund and a 1983 mortality table and instead these two factors will be determined going forward by the Director of the Department of Technology, Management, and Budget along with the State Retirement Board in consultation with the actuary. The changes are similar to changes made in 2017 to the school employees’ retirement system.
The State Retirement Board met November 1, 2018 to hear the actuary report on implementation of the new law. The actuary discovered three additional issues needing change. The Board adopted new standards for calculating survivor benefits starting April 1, 2019:
- Use investment return assumption of 6.75 percent rather than 8 percent.
- Use mortality table from the 5-year actual state employee retiree participants experience study and other sources.
- Include pension cost-of-living yearly adjustment of 1% (or $25, whichever is lower) in the calculation.
- Use a unisex table with 60% male and 40% female instead of assuming all retirees are male and all survivors are female.
- Include pop-up experience cost. If a survivor dies before the state retiree, the pension “pops up” to 100 percent.
The Office of Retirement Services has been contacting defined benefit active employees eligible for retirement to inform them about the changes and urging them to compare the survivor benefit under the current formula and the one that will be used beginning April 1, 2019. The new formula is not available to current state retirees and survivors. The interest rate and actuarial assumption for calculating survivor benefits will be looked at again in five years. Questions about this change should be directed to the Office of Retirement Systems.
LEGISLATIVE UPDATE
Investment Board — SERA representatives are scheduled to meet with the Bureau of Investment executives in late November to discuss the implications of the new Michigan Investment Board created in Governor Snyder’s Executive Order 2018-10 issued September 27. The Governor recently named the current three Investment Advisory Committee members to the three openings on the new Board. The first meeting of the newly constituted Board will be 9:30 a.m., Tuesday, December 11 at the Bureau of Investments, Great Lakes Conference Room, Fifth/Third Bank Building, 2501 Coolidge Road, Suite 400, East Lansing, Michigan.
Double-dipping Bill — The Michigan SERA Coordinating Council Executive Board decided to support HB 6097 if amended to only address critical shortages in recruitment of transportation specialty classification vacancies. The sponsor’s office was contacted, listened to our concerns about the over-broad language of the current bill that would challenge the stability of the pension fund and raise ethical concerns about state employees being hired by the contractors they previously regulated. A substitute bill is being prepared.
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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