Legislative Report
July 2007
With the agreement on the Single Business Tax replacement, another piece of the puzzle has been put in place. The Michigan Business Tax has been agreed upon by the legislature and the Governor. It is being received with mixed reactions from the business community. Overall, it is thought to be a better taxing mechanism that the former Single Business Tax. The insurance industry probably was affected most by the new tax. However, even with agreement on this aspect of the state’s fiscal crisis, the whole puzzle is far from being solved. The two major pieces that comprise a partial solution to the fiscal puzzle, the current year deficit solution and the resolution to the business issue, still leave a giant piece of the puzzle yet to be resolved. The Governor’s office and legislative leadership are still wrangling over how to fund the cost of government for the 2008 fiscal year which begins October 1, 2007. Politically based philosophical differences have the two sides far apart on a solution.
The Republican leadership is insisting that reforms be made to state government before any serious talk of a tax increase occurs. Downsizing is their mantra. The Governor believes that while some streamlining of government can take place, it will not be significant enough to avoid some kind of revenue enhancement, known to us common folks as a tax. A figure of $1.5 billion is being tossed about as the amount needed in new revenue for the next fiscal year. A temporary income tax increase is being bandied about. In some circles, there is talk of a sales tax increase and/or having sales taxes levied on products and services which currently are not affected by the sales tax. It appears that the Democrats and the Republicans are not at a stage to seriously discuss the details of any tax proposal.
The Republican leadership of the Senate has come up with a list of “demands” which they are insisting be met before any tax increase is considered. These demands are summarized as follows:
- The Democrats help the Republicans pass a series of reforms which they have yet to introduce;
- That the Governor use her executive authority to halt the pay raises for state employees which are to take effect on October 1, 2007 [2%] and April 1, 2008 [2%};
- That the Governor immediately negotiate $300 million in concessions from the state employees or find other alternatives to generate the $300 million;
- If a deficit still exists after the implementation of these measures, it then should be addressed by some type of tax measure. The Governor has rejected these demands because either it is impossible for her to do (halt the pay increase) or she is philosophically opposed to doing so (reopening current contracts to get concessions). And the beat goes on . . .
Despite all of the infighting over the budget, there was action on a few bills which might be of interest to retirees/seniors:
SB 525 is a recently introduced bill which would require the Department of Community Health to create and operate a website containing price information on prescription drugs. The website would have to list the 150 most commonly prescribed brand name drugs as reported by the Medicaid program. The list could be supplemented by the most commonly prescribed drugs for all major illnesses and diseases, as determined by the Department of Community Health. If a generic drug is available for the brand name drugs on the list, the generic drug name equivalent must be listed. The usual and customary price of each drug listed and the name of the pharmacy, street address, and city or other identifiable location of the pharmacy where the drug or its generic equivalent may be purchased at the stated price must be included on the website. The bills provide that pharmacies must have a mechanism to update the website with correct pricing data. The bill has been referred to the Committee on Health Policy.
HB 4897 is a recently introduced bill which has been named the “Utilization of unused prescription drug law.” The bill calls for the establishment of a “statewide unused prescription drug repository program consistent with public health and safety through which unused prescription drugs, other than controlled substances, may be transferred from a health facility or agency, an adult foster care facility, an assisted living facility, or a manufacturer to a pharmacy or a charitable clinic that elects to participate in the program.” This program is intended to assist the medically indigent and participation by the type of agencies listed above is strictly voluntary. The bill outlines the eligibility criteria for agencies to accept and dispense unused prescription drugs and establishes specific rules governing the program. The bill has been referred to the Committee on Health Policy.
HB 4899 is also a recently introduced bill which would require health care insurers to include in their policies, both group and non-group, benefit coverage for prosthetics and orthotics that, “at a minimum, equal the prosthetics and orthotics coverage provided for by [the federal government]. Benefits shall provide for the replacement for the devices if required because of a change in the member’s physical condition and for repair or replacement if determined appropriate by the member’s treating physician. Benefits may be limited to the most appropriate model that adequately meets the medical needs of the member as determined by the member’s physician.” The bill lists other conditions and requirements such as prior authorization and imposition of co-payments and co-insurance. The bill has been referred to the Committee on Insurance. Note: This bill is likely to face strong opposition from many quarters because the cost of the coverage it mandates would increase the cost of health care in general. There is an organization that opposes any mandated health care coverage for this reason.
HB 4887 is a recently introduced bill which would create the “Job Applicant Credit Privacy Act.” Under the provisions of this bill, an employer could not take into consideration in the hiring process a job applicant’s credit history or even inquire about a job applicant’s or potential job applicant’s credit history. If a good credit history is an established bona fide occupational requirement of a particular position or job classification, the provisions of this bill would not apply. Any individual believing he or she was injured by the violation of the terms of this bill could bring civil action. The court could award costs and reasonable attorney fees to the prevailing plaintiff.
HJR “P’, SJR “B”, HJR “H”, and HJR “K” are all joint resolutions relating to a part time legislature. These bills differ in the amount of detail they contain. “P” calls for the reduction in pay and staff and the elimination of health insurance coverage for part time legislators. The number of days allowed for regular sessions in “P” is 120, while the number of days allowed in “B” is 90 consecutive days. If any of these bills were to pass, the measure would then be put on the ballot as a constitutional amendment for the citizens to decide whether to have a part time legislature or a full time one. All of the resolutions have been referred to an appropriate legislative committee. There probably will not be any action on these resolutions any time soon.
HJR “R” is a resolution pertaining to term limits. The Joint Resolution would extend the term limits for legislators elected after 2008 by allowing three terms (12 years) for senators and six terms (12 years) for representatives. An extension to three terms (12 years) would apply to elected officials in the executive branch of government. If passed by the legislature, this proposal would go on the ballot as a constitutional amendment.
HJR “E” is a resolution intended to limit state spending and establish a contingency fund. The resolution would cap state expenditures at 96% of the anticipated revenue as determined at the January Estimating Conference (a meeting of the two fiscal agency directors, the state treasurer, and the Budget Director) beginning with the 2010 -2011 fiscal year. The appropriation bills could not exceed 96% of the estimated revenue figure. Supplemental appropriation bills would require a two-thirds vote of the members elected and serving in the house and senate for passage. The additional revenue realized from the application of the 96% mandate and the actual revenue in excess of the 96% shall be deposited in a Countercyclical Budget and Economic Stabilization Fund. Appropriations from this Fund shall be made only by a two-third vote of those elected and serving in the house and senate. The Resolution was referred to the Committee on Government Operations and Reform. If passed by both chambers, the measure would then be placed before the people in the form of a Constitutional amendment.
SR 81 was quickly passed in late June to allow the Senators to take a two-week vacation without fear of being called back to Lansing. Under the Senate rules prior to this Resolution being passed, a “Call of the Senate” could be made by a majority vote of those present and voting. (A “Call of the Senate” is a procedural vote to require all members to return to the chamber posthaste. The doors are locked and those in the chamber cannot leave. Those who do not return, may be arrested by the Michigan State Police wherever they are and physically brought back to the chamber in Lansing to participate in legislative activity.) The Republican controlled Senate, believing the Democrats would try to force them back to Lansing though a “call of the Senate” changed the rule regarding “a call of the Senate” to require a majority vote of those elected and serving. Since the Democrats are in the minority, they could not succeed in a “call of the Senate” without the presumably absent Republican votes. After negative publicity about the two-week vacation with major budget issues being unresolved, both the House and the Senate reduced their vacations to approximately one week.
Miscellany
New Retiree Committee — The Speaker of the House, Andy Dillion, has established a new ad hoc committee to study the issue of the $200 billion unfunded health care liability for public employees in Michigan. The Health Care Committee is charged with coming up with solutions for covering the unfunded costs, reducing the costs of health care for state employees as well as other public employees, and generally making recommendations on the entire issue of health care for public employees. Obviously, the task is a tremendous one! The Committee is chaired by Democratic Representative Mark Meadows of East Lansing. Other Democratic members of the Committee are Representative Andy Coulouris, Saginaw and Dudley Spade, Franklin Township. Republican members of the Committee are Representative Lorence Wenke, Richland and Representative Brian Calley, Portland. SERA leadership intends to follow the Committee’s hearing and make input as appropriate.
Public disclosure of state employees’ salaries — The Lansing State Journal has angered a large number of people by establishing a website with the salaries of each of the 53,000 state employees available for review. The salaries are there for anyone to review without any contextual basis being provided. They obtained the information from the Department of Civil Service under the Freedom of Information Act, but apparently did not state how they intended to use the information. The Governor sent an e-mail to all state employees apologizing for the disclosure of this information by the State Journal. There has been a significantly large number of letters to the State Journal (some of which they print) taking exception to the disclosure of this information. There has been a call for a boycott of the State Journal by state employees and many have publicly announced the cancellation of their subscriptions. Some previous subscribers have gone as far as writing to businesses which advertise in the Lansing State Journal asking them to refrain from doing so. Resolution of the problem created by the Lansing State Journal’s disregard for privacy of a large number of Journal subscribers has not yet been reached.
Training citizens for recall efforts — The Michigan Taxpayer Alliance headed by former Republican state representative Leon Drolet of Macomb County has started holding “recall boot camps” throughout the state to teach citizens how to mount recall campaigns for any legislators who vote for a tax increase. Drolet is utilizing the services of two individuals from Wisconsin who have been successful in recalling 15 legislators for a 75% success rate to assist his organization in this undertaking. According to the Gongwer News Service, former Governor William Milliken, when asked about the ultra-conservative Drolet’s campaign, replied his actions were “as irresponsible as a man can be.”
People in the News
J. Peter Lark, Chair of the Michigan Public Service Commission, has accepted another position as General Manager of the Lansing Board of Water and Light. His resignation will create a second vacancy on the Public Service Commission. The Governor will fill both positions. With Lark’s departure, there will be only one Commission member and the Commission cannot conduct business with only one member.
Dennis Muchmore, a well respected public relations specialist in Lansing, has been named Director of the Michigan United Conservation Clubs, the state’s major conservation/natural resource advocacy organization.
Leon Drolet, an ultra-conservative former state representative from Macomb County, has been named Chair of the Michigan Advisory Committee to the United States Civil Rights Commission. This is a non-paid two year appointment. The Advisory Committee does fact finding, participates in investigations, and disseminates information on behalf of the U.S. Civil Rights Commission. The Michigan Department of Civil Rights issued a statement following Mr. Drolet’s federal appointment stating, “The appointment has all but erased its (U.S. Civil Rights Commission’s) credibility on civil rights issues.
Guy Vander Jagt, a 26 year former U.S. congressman from Grand Rapids and former state legislator, recently died at the age of 75. Mr. Vander Jagt, known for his oratory skills, was the keynote speaker at the 1980 Republican National Convention.
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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