Capitol News
February 9, 2025
SCRAP THE CAP UPDATE
SERA has been informed by Anthony Estell, Director of the Office of Retirement Services, that the actuarial study authorized in the Fiscal Year 2024 General Government Appropriations Act should be available this month. That will trigger discussion among lawmakers, their staff, and SERA representatives as to which of the three options requested in the study (or an alternative?) might be offered as an amendment to the State Employees Retirement Act and included in budget planning.
2024 LAME DUCK SPUTTERS TO A CLOSE
House Early Adjournment — On Thursday, December 19, the 2024 Democratic-controlled House (56-52) abruptly ended its last scheduled session day midafternoon after one Democrat, Karen Whitsett of Detroit, chose to leave and stay in the Republican minority office. Since all House Republicans had boycotted the session since the previous week, the House was down to 55 members present, not enough to pass any legislation. House Speaker Joe Tate (D-Detroit) resorted to a “Call of the House” provided in the Michigan Constitution and used rarely, directing House sergeants to force absent lawmakers to return, but he ultimately for unknown reasons, chose to adjourn rather than force holdouts back to House session. Over 250 Senate-passed bills died in the process and will have to be reintroduced in the 103rd legislative session with a Democratic-led (19-18 with one vacancy) Senate and Republican-led (58-52) House.
Included in the carnage were government transparency bills to subject the Legislature and Governor’s office to public records requests, gun and police reforms, polluter pay, a new Voting Rights Act, charter school reforms, petition drive improvements, maternal health care measures, and several bills SERA had supported.
Senate Last Day — Meanwhile, the Michigan Senate worked a 29-hour marathon session Thursday afternoon December 19 into Friday late afternoon to complete action on bills the House had sent to them before its surprise adjournment. Ultimately, the Senate sent to the Governor over 100 bills regarding gun safe-storage information, increase in unemployment benefits, tougher penalties for hate crimes, allowing pharmacists to prescribe birth control, easing the name change process, destruction of gun buyback firearms, standardized school safety requirements, charter school reforms, some child labor restrictions, standardizing sampling techniques for petition signatures, motherhood mortality measures, and more.
Dead bills We Supported — Left on the cutting room floor were some bills SERA supported. House Bill (HB) 6089/Senate Bill (SB) 1144 of 2024 to eliminate the $300 COLA cap on State employee pensions while retaining a 3 percent annual COLA was introduced in November but did not get a hearing in either chamber despite SERA’s efforts to urge their consideration. HB 6061 of 2024 to provide a defined benefit plan and retiree health care insurance for new State employees and an election option for current employees was introduced November 11, 2024, reported by the House Labor Committee. A floor substitute advanced to third reading by the whole House but did not get final House approval to advance further.
HB 5986 of 2024 to allow a State employee retiree to assign their pension benefits to a Special Needs Trust for a disabled beneficiary passed the House 91-18 but did not see any consideration in the Senate. SB 668 of 2023 which would permit people to directly access physical therapists for at least 60 days passed the Senate unanimously in October, was reported out of the House Health Policy Committee on December 5, but did not get a whole House chamber vote.
SBs 922 - 924 of 2024 would have created personal protection orders specifically to address situations involving financial exploitation of vulnerable adults, including those over 60, as well as threats or acts of violence against them. The bills passed the Senate and were reported out of the House Committee on December 19, but received no further House consideration. The guardianship reform package, HBs 4909 - 4912 of 2023 that we supported didn’t make it through the whole process either.
House Withholds Nine Bills — The Senate sent back to the House the House-originated bills they had approved without amendment for further Constitutionally required processing. House clerks prepared all of the bills and sent them to the Governor for her 14-day window to sign or veto them &$8212; EXCEPT for nine bills, four of which were supported by SERA.
The new Republican Speaker Matt Hall (R-Kalamazoo) said he was holding these nine bills for review. According to news stories, there is historical precedent for delaying presentment to the Governor. However, the Senate passed a resolution authorizing a lawsuit to compel the House Speaker to present the bills to the Governor, which was filed on February 3.
2025 LEGISLATIVE ACTIVITY
Senate Labor Committee Hearing — To dramatize the importance of the four labor bills being held back by the House, the Senate Labor Committee held a hearing on the bills on February 5. SERA submitted written testimony supporting the bills and Senate legal action to compel the House to comply with the Constitutional requirement to present the bills to the Governor.
- Held back: Public Employee Health Insurance Premiums – One bill held back is HB 6058 passed by the Senate at 6:41 a.m. on December 20 in a party-line vote that would ultimately allow lower health care insurance premiums for public employees, including pre-Medicare eligible State employee retirees. The 2011 law sets 80 percent as the maximum premium public employers can contribute toward public employee health care. The bill would make 80 percent the floor rather than the ceiling that public employers are required to pay.
- Held back: Corrections and Conservation Officer Pension Improvements – Three other bills held back are HBs 4665 - 4667, passed on a bi-partisan basis, that would allow corrections and conservation officers and others in law enforcement to participate in the state police retirement plan, a hybrid plan with both pension and 401k-style components. Supporters say the measure could help boost staffing, recruitment and retention to reduce existing shortages, particularly in Michigan prisons. Boosting these retirement benefits would cost the state between $20 million and $37.8 million a year, according to an analysis by the House Fiscal Agency.
Minimum Wage and Sick Leave — The 2018 voter-initiated minimum wage and earned paid sick leave statutes are scheduled by the Michigan Supreme Court to go into effect February 21 after a six-year court challenge of the “adopt and amend in the same legislative session” procedure the then-Republican majority used to gut the measures in the 2018 lame duck session.
House measures — House Republican proposals to amend both laws to gut them again, HB 4001 of 2025 (minimum wage amendments) and HB 4002 (paid sick time amendments) of 2025, had a hearing in a specially appointed House Select Committee on Protecting Michigan Employees and Small Businesses on January 16, 2025. The bills were adopted by the whole chamber 63-41 (HB 4001) and 57-38 (HB 4002) on January 23 and sent to the Senate.
Senate measures — Senator Kevin Hertel (D-St. Clair Shores) has sponsored SB 8 of 2025 to amend the minimum wage-initiated statute in less harsh ways than the House’s HB 4001. The major feature is bringing tipped wages to 60 percent of the minimum wage instead of leaving them at 38 percent of the minimum wage in HB 4001. The minimum wage law to go into effect February 21, 2025, would bring tipped wages to 100 percent on the minimum wage by February 2030.
Highly tipped workers oppose a change in the tipped wage on the theory that customers would quit tipping them. Some report making the equivalent of $20 to $25 an hour with their tips. The small restaurant industry opposes because paying servers minimum wage would mean price increases that might put them out of business they say. A hearing on SB 8 is scheduled for February 12.
Senator Sam Singh (D-East Lansing) sponsored paid sick leave amendments in SB 15 of 2025 in an attempt to respond to small business concerns on recordkeeping while retaining most of the features of the initiated statute. His amendments would affect employers with 25 or more employees whereas HB 4002 would only apply to employers with 50 or more employees. The law scheduled to go into effect February 21 sets a minimum of ten employees. SB 15 provisions also are somewhat in line with features of other states’ paid sick time laws. A second hearing on SB 15 is scheduled for February 11.
BUDGET
On February 5, the Governor issued her Executive Budget recommendation. The Governor proposes an overall budget recommendation totaling $83.5 billion, including a general fund total of $15.3 billion and a school aid budget totaling $21.2 billion.
Notable in the Governor’s budget are the following senior measures, including:
- Continuing the tax relief to Michigan seniors through the rollback on the retirement tax, which on average will put $1,000 back into the pockets of 500,000 senior households when fully phased in for tax year 2026.
- $2.9 million to expand the PACE program, which provides comprehensive medical, social, and physical care for the frail and elderly population, by adding a total of 54 slots in Saginaw, Traverse City, and Newaygo. Since October 2019, enrollment in the program has grown from serving 3,000 individuals to nearly 5,500 seniors today.
- $2.7 million to protect nursing home residents, supporting nine new positions to provide more timely and comprehensive oversight of Michigan’s 424 nursing homes and acute and continuing care facilities. This adds to $29 million already appropriated for this critical need.
- $700,000 to enhance oversight of Homes for the Aged. This will support three additional positions to ensure timely issuances of new licenses and renewals of existing licenses, routine inspections, and complaint investigations at Michigan’s 342 state-licensed retirement homes and assisted living facilities.
- $2 million to support services for Michiganders experiencing dementia.
Federal Funding — Since over 40 percent of the State’s budget is derived from federal government funds, and with President Trump’s administration trying to impound Congressionally approved grants and contract payments to states, municipalities, and private entities, State budget planning is likely to be difficult this year. Michigan Attorney General Dana Nessel on February 7 joined a coalition of 23 other State Attorneys General in New York v Trump, the ongoing lawsuit challenging federal government’s pause of nearly $3 trillion in federal assistance to the states.
State of the State on February 26 — Other budget priorities will likely be included in Governor Whitmer’s State of the State address scheduled for 7 p.m. on Wednesday, February 26. The address will be held in the Michigan House Chambers in front of a joint session of the Michigan House of Representatives and the Michigan Senate and broadcast live throughout the state.
Editor’s note: Mary Pollock is the Lansing SERA Chapter and SERA Coordinating Council’s Legislative Representative. She may be contacted at michigansera@comcast.net.
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