Capitol News
June 6, 2021
COVID-19
You could almost hear a statewide sigh of relief on June 1 when the capacity limits for outdoor events like baseball games and outdoor residential gatherings were lifted entirely. Indoor capacity limits increased from 25 percent to 50 percent, allowing larger indoor social gatherings such as weddings and funerals to resume at near-normal size. Face masks are only required for individuals who are not yet fully vaccinated. As of July 1, the State will no longer limit capacity at indoor or outdoor gatherings.
Variants — An unknown in this hopeful picture is whether new variants develop among the unvaccinated and then expose vaccinated people to a variant not protected by current vaccines. According to the Michigan Department of Health and Human Services, there are seven known variants circulating in Michigan. Through May 28, there were 11,569 cases of variants, a nearly 700 percent increase from 1,450 known variant cases on April 1, 2021. We must quickly get everyone eligible for a COVID vaccination vaccinated before variants can develop and spread.
PENSION TAX UPDATE
Senate Bill (SB) 467 — A new pension tax modification bill, SB 467, sponsored by Sen. Jim Runestad (R-White Lake) was introduced May 20 and had a first hearing in Senate Finance Committee on June 2. Sen. Runestad is chair of the Committee. The bill would amend the Michigan Income Tax Act to increase the amount an individual who was born after 1945, and had reached the age of 67, is eligible to deduct from his or her taxable income starting January 1, 2021, and to adjust the amount of the deduction with an inflation factor beginning with the 2022 tax year. Individuals born before 1946 are not affected by the bill.
Deduction Increase — The bill would increase the amount of income that may be deducted by eligible individuals from $20,000 to $25,000 per return for single filers, and from $40,000 to $50,000 per return for joint returns. As a result, the maximum impact for any individual eligible taxpayer would be a tax liability reduction of $213 per year for a single return and $425 for a joint return according to the House Fiscal Agency Analysis.
Revenue Loss — The Analysis of the bill projects a loss to the General Fund and School Aid Fund revenue of approximately $92 million per year in tax year 2022, and the revenue reduction would increase by approximately $10 million to $15 million per year in later tax years as additional taxpayers turned age 67 and exemption amounts were indexed to inflation.
SERA Position — The SERA Coordinating Council Executive Board voted to support the bill with the suggestion that the inflation index cited in the bill be the one for the elderly, CPI-E (Consumer Price Index for the Elderly), that better reflects senior spending patterns on medical care and housing than the general CPI typically used as an index.
House Bill (HB) 4002, which would sunset the pension tax on December 31, 2021, and discussed in last month’s SERA-Nade, has received no action since its hearing in the House Tax Policy Committee on April 14.
ANNUAL PENSION SUPPLEMENT
SERA’s proposal to remove the $300 annual supplement cap on our pensions saw meetings of SERA leaders in the last month with the majority and minority vice-chairs of the Senate Appropriations Committee, the Office of Retirement Services Director, and the Governor’s Deputy Legislative Director. The purpose of the meetings was to inform them about the problem with our 3 percent annual supplement capped at $300 set in 1987. Subsequent inflation has eroded this so that its value now is only $129. Moreover, 85 percent of State employee retirees are subjected to the cap. School employee retirees have no such cap on their 3 percent annual supplement.
Our current strategy is to use HB 4264, a bill about financing pension funds in the future, as a vehicle to ask for elimination of the cap but our proposal could also be a stand-alone bill. The full House has passed this bill unanimously. The Office of Retirement Services is estimating a cost to the pension fund of over $200 million over 20 years but the SERA Legislative Committee is developing our own estimate.
ANNUITY BILL
The annuity bill that would require the State to offer an annuity option to current active State employees (future retirees from SERA’s point of view) in the defined contribution retirement plan, HB 4733, had a hearing in the House Appropriations Committee on May 12 and was reported out of Committee on May19.
The Michigan Department of Treasury, Bureau of Investments (BOI) representative Greg Parker, Director of Asset Allocation and Public Markets, testified in opposition to the idea of adding annuities to the active employee investment choices. The reasons are that annuities are complex, irrevocable once purchased, often pay out low returns, have waiting periods to use them, and are expensive. BOI says it is better for employees to purchase an annuity at retirement when a person’s financial situation is better known. Annuities are currently offered to State employees upon retirement. Additionally, any current State employee can contact Voya right now and ask for help in finding an annuity vendor, or use their own financial or tax advisor for a recommendation on a reliable annuity provider.
The SERA Coordinating Council Executive Board voted to oppose the bill. This will be communicated to the full House and the Governor’s Office.
ELECTION BILLS
Both the House and Senate Election Committees are moving quickly to act on dozens of bills to change voting laws and procedures in Michigan based on the premise that there were problems with the November 2020 election.
Passed in the House — HB 4132 and HB 4133 passed the House 66-43 and 65-44, respectively, on May 26. Under current law it is a misdemeanor for a person to make a false statement in an absent voter ballot application and a felony for a person to submit a forged signature on an absent voter ballot application.
The bills would make it a felony to knowingly submit an absentee voter ballot application using another person’s name and personal identification, knowingly submit an absentee voter ballot application with intent to obtain multiple absentee voter ballots, or knowingly submit an absentee voter ballot application containing false information or a forged signature. Under Michigan’s Election Law, a felony for which no other penalty is provided is punishable by imprisonment for up to five years or a fine of up to $1,000, or both.
The bills are reintroductions of HBs 5880 and 5881, and of SBs 977 and 978, of the 2019-20 legislative session. SB 977 and HB 5881 were passed by both chambers and enrolled, but were vetoed by Governor Whitmer on October 16, 2020. In her veto message, the Governor said that current law concerning voter fraud “is crystal clear,” and argued that the bills “would muddy the waters, and would likely confuse voters about what conduct is actually criminal.”
The Secretary of State supported the bills in Committee. The Michigan League for Public Policy, the ACLU of Michigan, and the League of Women Voters of Michigan opposed the bills. Michigan SERA took no position on the bills. The bills now await action in the Senate Elections Committee.
Reported by Senate Elections Committee — On June 2, the Senate Elections Committee reported out along party lines SB 285, 303, and 304. Michigan SERA submitted written testimony opposing the bills as introduced on May 26. As a result of many objections to SB 285, on June 2 the Senate Elections Committee approved a substitute SB 285 S-1 modifying the absentee ballot application requirements.
SB 285 as introduced would have required that absentee voters include a copy of their driver’s license or State-issued identification with their mailed absentee ballot application. Failure to do so would make them eligible only for a provisional ballot with its attendant post-application or post-election in-person trip to the clerk’s office to show acceptable identification.
Since we estimate that most of our members do not have a working copier in their homes, and many no longer drive a car to be able to easily go to a copy shop to obtain a copy of their driver’s license or State-issued identification, or follow up the submission of a provisional ballot with a trip to the election clerk’s office, we stated that this proposed requirement would have the effect of disenfranchising a significant number of voters, especially seniors. The system we have now for signature verification on the absentee ballot application with the signature on file in the clerk’s office and penalties for forging a voter’s signature is sufficient to deter absentee ballot application misconduct in SERA’s view.
The substitute SB 285 S-1 added a driver’s license or State-issued identification number, the last four digits of the Social Security number or a copy of the driver’s license or State-issued identification number to the options for proof of identity on an absentee ballot application.
SBs 303 and 304 would abolish the current voter identification requirements of either a State-issued identification or a signed affidavit of identity under penalty of perjury for in-person voters. This proposal would result in many in-person voters without the narrowly prescribed identity requirements with them on Election Day having to submit a provisional ballot which would not be counted unless the voter made a separate post-election trip to the election clerk to present additional voter identification. Many voters would not have the time or capability of completing the post-election follow-up, thus disenfranchising them. In the last election about 15 percent of those voting with a provisional ballot followed up with a trip to the election clerk to show acceptable identification. The last time these strict voter identification requirements were passed, lawsuits challenging their constitutionality were successful in overturning them.
SB 310 — SERA has also opposed SB 310 as introduced. The bill as introduced would prohibit the Secretary of State from sending absent voter ballot applications to voters unless it was requested by the voter. The bill as introduced also prohibited providing a direct link to an absent voter ballot application on the Department of State’s website.
In its written testimony, SERA stated that the provision of the absentee voter ballot application on the SOS Website and actually sending an application to all voters was very helpful in 2020 to encourage Michigan voters to engage in the election process, especially since all voters were newly eligible to vote by absentee ballot and most voters were not familiar with the process. Even with this effort, 30 percent of Michigan voters failed to cast a ballot in November 2020. Perhaps requiring, permitting, or encouraging duplicate mailings of absentee voter ballot applications would be helpful in reminding voters of their opportunity to vote easily by mail or drop box. Since election clerks keep track of absentee ballots sent to voters, any duplicate submission of applications for an absentee ballot would be caught and not acted upon.
Subsequently, a substitute SB 310 S-1 was introduced removing the prohibition of a direct link to the absentee ballot application on the Secretary of State’s website but retaining the prohibition on the SOS mailing an application for an absentee ballot to voters unless requested to do so by the voter.
Other Election Bills — In both the Senate and House Elections Committees, 28 other bills with GOP-proposed election law changes had hearings in the last month. There are also other GOP-sponsored bills not yet considered in Committee as of this writing. The Michigan Republican Party has announced plans to run a voter-initiated law petition drive to by-pass any Governor’s veto of the bills. Because signature gathering is easiest in good weather, the remaining bills are likely to move very soon.
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, is no longer produced.
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