Capitol News

September 9, 2019

The Michigan Senate returned on August 27 and the Michigan House on the day following, ending its 9-week summer “district work.”

BUDGET NEWS

Facing a potential state government shutdown on October 1 over Governor Gretchen Whitmer’s commitment to raising new revenue to complete her campaign promise to “fix the damn roads” and the GOP-led legislature’s commitment to no new taxes, the Governor, House Speaker Lee Chatfield (R-Levering) and Senate Majority Leader Mike Shirkey (R-Clarklake) have agreed to complete the 2019-2020 fiscal year budget without a road deal.

In a statement released September 9, the three said “In conversations over the weekend, we’ve agreed that the best course of action is to immediately begin target-setting with legislative and executive leadership to get a budget passed by October 1st. We have all agreed to continue conversations about road funding in a meaningful way and table all associated issues for the time being. Right now, our number one priority is getting a budget passed. We look forward to rolling up our sleeves and negotiating on behalf of the people of Michigan.”

For months the Governor promised she would veto any budget that does not include a mechanism for raising $2.5 billion in new funding for the state’s crumbling infrastructure. Sen. Shirkey agreed that amount was probably what is needed. But the Governor has said that four undisclosed Republican proposals discussed with her were not viable.

Her proposal to raise the gas tax by 45 cents a gallon would in turn release some General Fund dollars now going to roads for education or other priorities. The GOP likes the idea of a $10 billion school employee pension bond to be paid off over many decades at a higher borrowing cost to free up $900 million a year in the General Fund, but the Governor has remained firm in opposition to it.

House Republicans like the idea of eliminating the state sales tax on gasoline purchases, which is constitutionally dedicated primarily to schools and local governments, to make sure money spent on fuel goes to roads. Whitmer has said she’d consider that as long as it’s clear how the state would make up that funding currently going to schools and local governments.

Meanwhile, House Democratic Leader Christine Greig has suggested taxing heavy trucks so they pay an extra cent per mile driven, which she estimated would raise an additional $400 million for roads. She also said closing “corporate tax loopholes” could raise up to $500 million. Combined with a smaller gas tax increase, these ideas could close the gap for necessary road repair funding, she asserts.

Other differences — And there are other differences to be ironed out. The Senate budget proposal included a 10 percent cut to both the Attorney General’s office and the state Department of Civil Rights, as well as a more than 30 percent cut to the Secretary of State’s executive operations that would fund the state’s new Citizen’s Redistricting Commission approved by statewide ballot last November.

The House passed a proposed budget that cut the Attorney General’s office by 15 percent. The House also proposed cuts to information technology of 25 percent in most executive branch agencies, including the offices of Attorney General, Civil Rights, Secretary of State, Treasury, and Talent and Economic Development. The House and Senate are also in conflict with the governor on proposed state K-12 education spending.

Deadline — By Michigan’s Constitution, there must be a budget adopted by the Legislature and approved by the Governor by October 1. State government departments have been ordered to identify essential services that must be maintained such as keeping state institutions staffed, but other state services may shut down if a budget deal isn’t reached.

VULNERABLE ADULT BILLS MOVE

On September 5, the Senate Judiciary and Public Safety Committee reported out to the full chamber five bills that would raise the penalties for financial exploitation and assaulting a vulnerable adult. Reported unanimously were SB 108, SB 109, SB 110, SB 412 and SB 413.

Assaulting or battering a vulnerable adult are addressed through stiffer criminal penalties in SB 108 and SB 109, while SB 110 allows a court to appoint a limited guardian to supervise an incapacitated individual’s access to a relative under certain circumstances. Heavier criminal penalties for financially exploiting a vulnerable adult are addressed in SB 412 and SB 413.

“Vulnerable adult” means: a) an individual age 18 or over who, because of age, development ability, mental illness, or physical disability requires supervision or personal care, or lack the personal and social skills required to live independently; b) a person 18 years of age or older or a person who is placed in an adult foster care family home or an adult foster care small group home; or c) a vulnerable person not less than 18 years of age who is suspected of being or believed to be abused, neglected, or exploited. Many frail seniors are considered vulnerable adults deserving of the additional protections offered in these bills.

GERRYMANDERING CHALLENGES

Yet another lawsuit has been filed challenging the Independent Citizen Redistricting Commission overwhelmingly passed by voters last November. This time it is the official Michigan Republican Party bringing the lawsuit, rather than individual Republicans or Republican-leaning organizations.

The lawsuit was filed August 22 in U.S. District Court in Grand Rapids and seeks to invalidate the Commission that will redraw the state’s legislative and Congressional boundaries after the 2020 Census for the 2022 elections. The lawsuit argues the structure of the 13-member commission — 4 each from the two major political parties and 5 non-affiliated — violates the GOP’s freedom of association by barring political parties from picking their own representatives. The MRP points out that the Democratic Secretary of State will effectively pick the Republican representatives on the Commission. The lawsuit asks for a preliminary injunction that would leave redistricting in the hands of the Republican-run legislature subject to a gubernatorial veto (effectively throwing the matter into the courts) while litigation remains ongoing.

The new law requires the Secretary of State to mail commissioner applications to 10,000 Michigan registered voters, selected at random. Current Secretary of State Jocelyn Benson’s office plans to accept applications through June 2020, and then contract an outside firm to draw 200 applicants from the pool, which must be representative of the geographic and demographic diversity of the state. Of those 200, legislative leaders of both parties may each strike five applicants. The 13 commissioners will be randomly selected from the final pool of 180.

The law requires applicants to attest under oath whether they affiliate with one of the state’s two main parties, and if so, which one. The Michigan GOP says in its lawsuit that the amendments did not define “affiliation,” and the process violates the party’s constitutional freedom to pick its own representatives.

In a complaint filed July 30, a separate group of Republicans argued the Commission’s selection process unconstitutionally excluded political candidates, officeholders, lobbyists, and their relatives from serving on the commission.

Defenders — Michigan’s Attorney General Dana Nessel has vowed to defend vigorously the new law for the State of Michigan. Voters Not Politicians, the group behind the anti-gerrymandering constitutional amendments, has been granted permission by the court to intervene in the lawsuits.

AUTO NO-FAULT UPDATE

Overlooked in all the excitement about the new auto no-fault insurance reforms that will generally go into effect in July 2020 are a few important changes that are in effect right now with regard to Personal Injury Protection benefits. Gone are unlimited medical benefits for 1) drivers of your vehicle who are not named insureds on your policy and are not related to you and 2) those related to you but don’t live in your household. This would include your children or grandchildren who are not full time students and don’t live with you but have use of your car.

From Rathbun Insurance Agency:

As in the past, the Named Insured, secondary named insured, spouse of the named insured (or secondary named insured), resident relatives of the named insured (or secondary named insured) are all considered eligible for personal injury protection (PIP) benefits. These would be listed and rated on the policy, or in some cases like young children, just included in the household member count. In the event of an accident involving a motor vehicle, these people could make a claim for PIP benefits under the auto insurance policy.

Moving forward, listed drivers living in the household that are not related to the named insured and not designated as a secondary named insured cannot make a claim for PIP benefits under the auto insurance policy. In an accident, these individuals would make a claim for PIP benefits through the Michigan Assigned Claims Plan, limited to $250,000. The only way for two unrelated, unmarried adults living in the same household to both be eligible for PIP benefits from the same policy is if the second person is designated as a secondary named insured.

Drivers that don’t live in the household generally cannot make a claim for PIP benefits under an auto insurance policy. In most cases, these drivers would need to be the named insured on their own policy to make a claim for PIP benefits under an auto insurance policy. The main instance in which this exclusion would apply is if a child is still listed on a parent’s auto insurance policy after they are no longer in school and do not reside with the parents. In order to be eligible for unlimited PIP benefits, these drivers would need their own policy. The most notable exception to this is a college student away at school, as those students can remain on their parent’s policy until they move out.

OF NOTE

Ombudsman bills introduced — HB 4872 and HB 4873  would create the State Employees Ombudsman Act, expanding whistleblower protections for public employees who sound off against the misconduct of their employer. The ombudsman would be administratively housed in the Legislative Council.

The two bills were part of a larger package of bills(HB 4868 through HB 4879) introduced by House Democrats to tackle alleged payroll fraud by making it easier for employees to report fraud, increasing criminal penalties for fraudsters and more. Apparently Michigan taxpayers lose about $107 million to payroll fraud. Attorney General Dana Nessel created a Payroll Fraud Enforcement Unit just months after taking office. The resource, in which people can report alleged fraud either online or over the phone, frequently sees complaints of unpaid overtime and wrongfully listing employees as independent contractors so the employer can avoid unemployment and workers’ compensation insurance costs among other employer advantages.

Stoner Alert — Michigan voters legalized medical marijuana in 2008 and adult recreational use in November 2018. Licensed medical marijuana dispensaries are initially the only businesses that will be able to obtain a recreational marijuana retail license. State law and regulation differentiates crops between medical and recreational use, and will therefore require growers to obtain separate licenses depending on where their cannabis will be sold. This puts the first crop of recreational cannabis in licensed dispensaries sometime in the first quarter of 2020 (most likely), with sales commencing in late March 2020.

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. Michigan SERA Recent News, a compilation of links to articles of interest to state employees, has been suspended until further notice.

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