Legislative Report

May 2007

The State’s financial crisis continues to dominate the news around the Capitol. The fiscal picture worsens as the legislative leadership and the Governor continue to debate the best resolution to the current year deficit and the problems that loom for the 2008 fiscal year.

The Governor threatens to virtually close down state government and make drastic cuts in payments to schools and delay payments to other entities outside of state government. The deficit has been pared back to some $700 for the current fiscal year as the result of actions taken by the legislature to partially reduce the School Aid Fund deficit, although the Fund is still some $200 million short. The General Fund shortfall for the current year is some $500 million. With only five months remaining in the fiscal year, time is running out to pass and implement measures to eliminate the deficit. As a result of Michigan’s fiscal woes, Moody’s Investor’s Service, a Wall Street rating agency, has downgraded the state’s credit rating one level.

This is not one of Michigan’s shining moments!

There was action on a few bills which might be of interest to seniors/retirees. The following are some of these bills:

SB 79 is a bill which eliminates the requirement that a vehicle registration certificate be signed in order to avoid a ticket for a civil violation if a driver is stopped by the police. Currently the lack of the owner’s signature on the registration document carries with it a hefty fine. This bill would eliminate the requirement for the signature on the back of the certificate. The bill has passed the House and is now in the Senate Committee on Transportation.

SB 16 & SB 348 and SB 347 are bills which would create funds for financing research for prostate cancer and breast cancer, respectively. Both bills allow for a check-off on the state income tax form to allow taxpayers to contribute to the funds established by these bills. The Department of Treasury would administer the two research funds and determine the specific contribution designations (check-offs). The Department could discontinue the check-off if it failed to raise $100,000 in a tax year for two consecutive years. The research activities associated with these funds would be under the jurisdiction of the Department of Community Health. All three bills have passed the Senate and gone to the House where SB 16 and SB 348 have been reported out of the House Committee on Health Policy. SB 347 has been reported out of the House Committee on Tax Policy.

SB 3 & SB 284 are bills addressing telephonic political activity or the so-called robo calls. SB 3 defines “automatic telephonic communication” as “any outbound telephone call that plays a recorded message that expressly advocates for or against an election, a candidate, or a ballot question.” SB 284 requires any communication covered under the law to state clearly the identity of the person authorizing and paying for the communication and identify the source of funding as defined in the bill. An individual acting independently, and not as an agent of a candidate, would not be subject to the requirements contained in the bill. The bill also specifies sanctions for violation of the requirements of the bill. Both bills have passed the Senate and gone to the House Committee on Ethics and Elections.

HBs 4373 & 4514 are bills intended to stimulate new automobile sales. These bills would allow a person purchasing or leasing a new automobile to trade in his/her used automobile and pay sales taxes(HB 4373)or use tax on leased vehicles (HB 4514)on the difference between the cost of the new vehicle and the trade in value of the used vehicle. The value of the vehicle being traded in is the agreed upon value as evidenced by a signed document. New vehicles are defined as those with less than 300 miles. Both bills have been reported from the House Tax Policy Committee and are on the floor for action.

HB 4600 is a newly introduced bill which is difficult to understand its real intent upon its first reading. The bill authorizes the State Employees Retirement Board to “create and implement a state employee Health Care Fund for the purposes of accumulating funds to provide for the funding of health care benefits to retirants.” The bill requires that the Retirement Board report back to the Senate Majority Leader and the Speaker of the House no later than 12 months after the bill becomes law and is effective on the progress of establishing and implementing the fund. The bill allows the payments of health care costs for retirees and beneficiaries from this fund. The bill specifically states that it is legislative intent that the fund be exempt from federal taxes under specific sections of the Internal Revenue Code. The Retirement Board shall designate who the Fund’s investment fiduciary shall be and who shall be eligible for payments from the Fund. The Board shall also determine whether the fund will be established on an actuarial basis. The bill specifically states that “The fund may receive money from any source, including, but not limited to, contributions from members and qualified participants with any money paid though contribution by members or qualified participants being pre-tax dollars. It appears that this bill may anticipate employees and others paying for part of their health care cost. The bill was referred to the Committee on Government Operations.

HB 4680 is a recently introduced bill which would prohibit the sale of a gift certificate or gift card that states an expiration date or otherwise expires and carries with it an inactivity fee or other service fee when the gift certificate/card is used. The bill has been referred to the Committee on New Economy and Quality of Life.


Attorney General’s plan for gym squashed — After a Detroit newspaper revealed that Attorney General Cox was planning to have a gym in the Law Building, the plans were quickly killed. Mr. Cox justified the gym because he has legal investigators who need to be in good physical health. Mr. Cox was criticized for planning to purchase the gym equipment at the same time he was laying off clerical staff. The estimated $54,000 cost was allegedly to be paid from private funds, although the source of funding continued to be debated. After review, the Attorney General conceded that the procurement of the equipment would be in violation of an Executive Order issued by the Governor as part of her fiscal retrenchment plan, so the issue is now mute.

Judges turn in State-owned vehicles — The justices of the Supreme Court followed the lead of Chief Justice Clifford Taylor and turned in the state-owned vehicles assigned to them. The Court of Appeals judges followed the Supreme Court Justices lead and turned in their state-owned vehicles also. The vehicles were being use for both business and personal use. The practice of assigning justices/judges vehicles was questioned in view of the State’s dire fiscal crisis. It is estimated that the vehicles were costing the State some $400,000 annually.

People in the News

Representative George Cushingberry, a Detroit Democrat, went on trial in Ingham County Circuit Court for campaign finance violations. The combination felony and misdemeanor charges were brought by the Attorney General at the request of the Secretary of State. Cushingberry was charged with not filing campaign reports in a timely manner and signing an affidavit indicating that his campaign finance reports were in order and that he had no outstanding issues with the Secretary of State. After the case was heard and the jury seated, Circuit Court judge James Giddings dismissed the case because, in his opinion, the state had not proved its case. In affect, he issued a directed verdict of acquittal. Cushingberry is Chairman of the House Appropriations Committee.

Representative John Garfield, a Republican from Rochester Hills, was recently arrested and charged with drunk driving, his second such offense since 2005.

Gary Peters, State Lottery Commissioner, has announced he will leave that position in August to accept an Endowed Chair in American Government at Central Michigan University. State law prevents the Lottery Commissioner from holding an outside job. Peters is a former state senator.

Editor’s note: Alvin Whitfield is former President of the Lansing SERA Chapter and former Chairperson of the Michigan SERA Council and current Legislative Representative for both the Council and the Lansing Chapter. He may be contacted at 1241 Runaway Bay Drive, C-3, Lansing, Michigan 48917; phone 517/703-9666; e-mail: alwhit@worldnet.att.net.

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