October 6, 2019
The talk of the town is the GOP-controlled legislature waiting until the last minute to send the Governor FY2020 budget bills and then the Governor’s bold budget vetoes. However, there was plenty of other news in the last month.
FY 2020 BUDGET
Whitmer’s budget, presented in March, was built around her proposed 45-cent-per-gallon hike in the fuel tax that would generate an extra $2.5 billion annually, once fully implemented. Whitmer’s budget proposal would have spent $468 million to $600 million from the General Fund formerly used for fixing Michigan’s crumbling roads and bridges for other state priorities, such as education and the environment. The total state budget is $59 billion, of which less than $11 billion comes from the state’s General Fund.
The governor’s proposed huge hike in the gas tax was widely seen as an opening gambit for negotiating a deal with GOP legislative leaders. But Speaker of the House Chatfield (R-Levering) and Senate Majority Leader Mike Shirkey, (R-Clarklake) rejected the plan. Instead they put forward a proposal to generate extra money by borrowing against, and/or delaying payments on, school employee pension obligations, which the Governor soundly rejected.
Vetoes — Governor Whitmer’s vetoes, believed to be the most aggressive use of the line-item veto power by a governor in Michigan history, are emblematic of the fight over spending priorities between the first-term Democratic governor with 15 years of state budgets under her belt as a former legislator, and the less experienced GOP-led legislature. All but 7 of 148 legislators, all State Senators, have only served with a Republican Governor for the previous eight budgets.
The Governor vetoed 147 line items totaling $947 million and declared 72 provisions unconstitutional in 16 budget bills on the last day of the fiscal year, September 30, thus avoiding a feared partial state government shutdown. Whitmer’s vetoes included $375 million in proposed General Fund spending on roads and bridges, but she explained the paradox by contending she’s opposed to using one-time General Fund money, as the Legislature proposed, rather than revenues from increased fuel taxes for a longer-term road funding solution.
The Governor claimed that the Legislature’s spending plan threatened public health and safety by, for example, underfunding state prisons that would have caused the closure of two prisons, and underfunding of state cybersecurity efforts. The veto of the $37 million popular Pure Michigan tourism advertising campaign was the top eye-catcher, but axing $35 million foundation allowance increases for charter schools and zeroing out public funding for private college tuition grants also caught attention. Rural hospitals were hit with a $40 million veto, and secondary road patrols in rural areas caught a $13.1 million veto. Indeed commentators noticed that many of the vetoes targeted Republican-dominated areas of the state, perhaps sending a message to that party to bargain in good faith on a supplemental budget bill for FY 2020 and a caution for future budget negotiations.
State Administrative Board — Bright and early October 1, the State Administrative Board met and moved $ 625 million within 13 departmental budgets. Governors can’t move money from one department to another without approval of the Legislature. But the power to shift money within departments was upheld by the Michigan Supreme Court in a 4-3 decision in 1993. That case arose after Republican Gov. John Engler shifted money within departments and was sued by legislative leaders.
Overall, environmental programs and K-12 schools fared well, while health care, higher education, local government, and business interests had mixed results.
Supplemental? — The day after the Administrative Board met, the Governor announced $254.5 million in spending priorities that she would like to see in a FY 2020 Supplemental Appropriation bill that includes additional spending on parolee monitoring tethers, literacy coaches, a skilled trades job retraining program for adults, and additional funding for the Department of Health and Human Services. That would leave about $650 million in unallocated money for negotiations. But GOP leaders, still reeling from the vetoes and transfers, are at present uninterested they have said publicly. And the smaller government crowd sort of liked all the vetoes regardless of consequences.
ELDER ABUSE BILLS MOVE
On September 18, the House Families, Children, and Senior Committee referred out a package of bills to make it a crime to assault or restrain an elder adult (defined as those 65 or more years old) or vulnerable adult; expand a provision of law prohibiting embezzlement from a vulnerable adult to include an elder adult and update sentencing guidelines to reflect the changes. Each bill would take effect 90 days after its enactment. The bills are HB 4254 through HB 4260 and HB 4265. The bills will next be considered by the House Judiciary Committee.
On October 2, the Senate passed SB 110 to amend the Estates and Protected Individuals Code to allow a court to appoint a limited guardian to supervise an incapacitated individual’s access to a relative under certain circumstances. Under the bill, there would need to be clear and convincing evidence that the individual was incapacitated and the person caring for him or her was denying contact to another relative who wished to have access. The bill has been referred to the House Judiciary Committee for consideration.
BALLOT MEASURE UPDATES
Redistricting Commission — The GOP-controlled legislature moved the budget for the state’s new Independent Citizens Redistricting Commission from the Department of State to the Legislative Council, which has a majority of Republicans on it. The budget would provide $3.36 million General Fund money for the Redistricting Commission, a cut of $1.3 million from the Governor’s executive recommendation. The 2018 voter-approved amendment requires the Commission funding to be 25 percent of the Department of the State’s General Fund appropriation.
The approved budget does not provide any funding for the Department of State to implement the Commission. Nevertheless, Secretary of State Benson was recently quoted as saying that work on implementing the new Citizens Redistricting Commission will continue though the task has been made harder by the Legislature not funding the Commission in the Department of State budget. Her department is given the responsibility to create the process to name the 13-member Citizens’ Redistricting Commission that was added to the Constitution by the voters in approving Proposal 2018-2 in the 2018 election. Benson said in about one month the application for citizens to apply for the commission will be available at www.michiganredistricting.org
Republicans are currently challenging whether the commission itself is legal under the U.S. Constitution in a lawsuit before the U.S. District Court. No hearings have been scheduled in the case at this time.
PA 608 — The major parts of a Michigan law passed during lame-duck session in 2018 to limit ballot drives is unconstitutional, Michigan Court of Claims Judge Cynthia Diane Stephens held on September 27. The law placed a 15 percent cap on the number of signatures ballot petitioners can gather in any one of the state’s 14 congressional districts, a restriction that prevents ballot committees from solely targeting the most heavily populated, more Democratic urban areas. The ruling held that a geographic limit on petition gathering unconstitutionally makes it harder to qualify proposals for a public vote. She also nullified a new requirement that each petition indicate whether a circulator is paid or a volunteer.
The law also required petitioner gatherers to sign an affidavit with the state indicating whether they’re paid or volunteer. The court ruled that the legislature is justified in requiring circulators to disclose whether they’re paid or volunteer. That leaves the law’s affidavit requirements (and the invalidation of signatures if a paid volunteer fails to submit an affidavit) fully legal.
State Attorney General Dana Nessel had previously issued a legal opinion in May blocking most of the new restrictions. Voting rights groups sought the court ruling to ensure Nessel’s opinion wouldn’t be overturned and Republicans sued to enforce the law in its entirety. The GOP-led Senate plans to appeal the case.
AUTO NO-FAULT REFORM CHALLENGED
Two auto crash victims from 1990 and 2014 suffering catastrophic brain injuries and their guardians together with the Eisenhower Center, an Ann Arbor brain injury trauma center, have filed suit in Ingham County Circuit Court to challenge two parts of the state’s new car insurance law. Specifically, the limits on in-home attendant care and what health care providers can charge are targeted in the lawsuit. The lawsuit names two insurance companies, Citizens Insurance Company of America and USAA Casualty Insurance Company as the defendants. The case was assigned to Judge Wanda Stokes, a former top official in the administration of Governor Rick Snyder and a former attorney for Auto Owners Insurance Company.
The lawsuit contends that the premiums both crash survivors paid for their insurance policies entitled them to lifetime full in-home attendant care services and reimbursement for all reasonable charges for necessary care without regard to government or private fee schedules that are part of the auto no-fault reform legislation signed into Michigan law last spring. The fee schedule imposed on health care providers starting July 1, 2021, means the Eisenhower Center will only be reimbursed at 55 percent of the rate that it charged as of January 1, 2019, with that falling to 52.5 percent by July 1, 2023. The lawsuit argues that the law cannot have retroactive application to the insurance contract of plaintiffs and that their rights under that contract vested when the person got injured.
The new law, set to take effect in stages in the coming years, allows drivers to choose from a menu of medical coverage areas, rather than mandating unlimited coverage which has automatically covered those in catastrophic car accidents. Many bills have been introduced subsequently to modify the new law.
NEW PENSION TAX BILL INTRODUCED
Those retiring before 2012, regardless of age or year of birth, would be exempted from the pension tax if State Rep. Jeff Yaroch’s (R-Richmond) HB 4949 is enacted. The House Fiscal Agency has not projected the revenue cost to the state, but it has to be much less than the $330 million projected cost of abolishing the pension tax entirely. The lack of warning about the pension tax was one of the main criticisms of the law passed in 2011 with effect for the 2012 tax year.
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