As this report is being written in early September, the long saga of the State’s fiscal crisis remains unchanged. Supposedly, the leadership of the House and Senate are talking with each other regarding breaking the fiscal logjam, but no definitive reports or actions have resulted from those talks. With less than 30 days until the beginning of the new fiscal year, the projected 2007-8 fiscal year deficit of some $1.7 to $1.8 million remains with no consensus on a resolution by the decision makers.
While the legislature has been in recess for most of the month of August, the Appropriations Committees of both chambers have been active. The House and Senate have exchanged agency appropriation bills, have of which originate in the House and the other half of which originates in the Senate. But the bills have no basis in fact in terms of the validity of the bottom line amount because no one knows what the total revenue will be for next fiscal year.
The one thing that is known is that there is no agreement on whether and how to raise the revenue necessary to have even a continuation budget for 2008. The Republicans are advocating for further reductions in spending while the Democrats are declaring that further reductions cannot be made without severely curtailing existing services. With a move afoot to recall legislators who vote for an increase in taxes, neither Democrats or Republicans are anxious to face such a challenge. (See more regarding the recall issue later in this report.)
Because the legislature was gone for most of August, the status of bills reported on in the July report remains unchanged, with few exceptions. So the report on legislative activity in moving bills forward is short. The activity on the following bills may be of interest to senior/retirees:
HBs 4517 and 19 and SBs 298, 299, 301 and 303 are all bills requiring that certain records handled by Registers of Deeds not show the full Social Security number of an individual. The bills require that the last four digits of a Social Security number be used instead. This applies to any record released by or accepted by a Register of Deeds. The large number of bills is necessary because each bill addresses these changes to some existing law. These bills have either been sent to the Governor for signature or have been enrolled and are on their way to the Governor’s desk.
SB 689 is a bill which was fast-tracked in the Senate to provide for an early retirement program applicable to state employees whose age and years of service total 75. The bill provides that these employees would be eligible for an enhanced (1.75% factor) early retirement during a window period effective November 1 until December 31, 2007. Accrued annual and sick leave payouts would be made over a five year period. At the request of their department heads, certain employees could have the effective date of their retirement extended for up to three years (December 31, 2010) although the enhancement factor would only apply for service up to December 31, 2007. This bill passed the Senate Appropriations Committee on August 30 and the full Senate later that day. The Appropriations Committee did not take testimony from the State Budget Director or the Director of the State Retirement Systems, both of whom were present to give the administration’s objections to the bills. The bill passed on a straight party-line vote with the Republicans favoring the bill and the Democrats opposed. The bill has gone to the House Committee on Government Operations.
SB 624 is a bill to establish the date for the Michigan Presidential primary as January 15, 2008. This bill is quite controversial in a number of ways. First, it would require voters to declare their party affiliation, to which some people object. Secondly, it is in violation of the National Democratic Party rules which sets the priority for state’s holding primary elections. (The Party has threatened to unseat the Florida delegation at the National Convention in 2008 for changing its primary election date as Michigan has done.) The major Democratic candidates have announced that they will not campaign in Michigan prior to the January 15th primary date as a protest for this Party rule violation. The bill has been signed by the Governor. Stay tuned for the final outcome on this issue.
HB 5080 is a bill which would create a State Office of Condominium Ombudsman to review procedures and disputes concerning condominium elections and meetings, to assist the private sector in understanding their legal rights and responsibilities under the law, encourage voluntary meetings between condominium unit owners, the association co-owners and other interested parties, serve as a neutral resource in disputes between unit owners and the board of directors of the co-owners, and assist in resolving informal disputes within an association of co-owners. The ombudsman shall report periodically to the Governor, the Administrator, and the legislature regarding recommended changes in the condominium act. This ombudsman is to be a licensed attorney who shall be appointed by the Governor. The bill also would place tight restrictions on officers or employees of the Office of the Condominium Ombudsman as it relates to political activity and outside business activities. The bill has been referred to the Committee on Intergovernmental, Urban and Regional Affairs.
Product Recall Website — Governor Granholm has announced the creation of a website which will provide citizens with up-to-date information regarding products which have been recalled by the manufacturers. The website provides information on national product recalls in addition to Michigan specific product recalls. The address of the website address is www.recall.gov and is intended to help protect Michigan families from danger.
House Retiree Health Care Reforms Committee — This is a special committee established by the House leadership to study the scope of the cost of retiree health care and recommend ways in which to reduce future costs and fund the current obligations. The issue of “other post employment benefits” has come to the forefront as the result of a government agency requiring that business and government book the cost of these obligations. For Michigan state government, the cost is some $23 billion. The size of this figure has the potential for impacting credit ratings and other measures of fiscal soundness. To put Michigan’s obligation in perspective, the cost is 75% of its total assets and 2% of its total current spending. The Committee is taking a macro economic look at the problem at the present time. They have had individuals from large national firms such as Credit Suisse and UBS testify about possible solutions and the potential impact if nothing is done. These same individuals have given testimony regarding what other states have/are doing. It is refreshing to see a legislative committee go about their work in a dignified manner in attempting to understand the issues and ramifications of various alternative actions in solving a very complex problem. The UBS representatives told the Committee that in coming up with a solution(s), they should consider the problem as a time sensitive one, but not an eminent crisis.
Michigan Taxpayers Alliance — This is the group headed up by ultra-conservative former state representative Leon Drolet. It is putting fear in legislators by advocating for recall efforts in districts where it appears likely that recall efforts will be successful. They have asked legislators to sign a pledge that the legislators will not vote for a tax increase of any kind. Some of the legislators who do not sign, may become targets of a recall if they indeed vote for a tax increase. To date, The Alliance has filed paperwork to form Legislative Recall Committees with clerks in counties where the following legislators live: Rep. Andy Dillon- D — Redford Twp., Rep. Marc Carriveau — D — Northville, Rep. Ed Gaffney — R- Grosse Pointe Farms, Rep. Dick Ball — R — Bennington, Rep Gino Polidori — D — Dearborn, Sen. Gerald Van Woerkman — R — Norton Shores, Sen. Dennis Olsholve — D- Warren, and Sen. Glenn Anderson — D — Westland. The Alliance soon plans to file paperwork with the county clerk in Sen. Valde Garcia’s — R- Howell district. Speaking of pressure tactics . . .
People in the News
Marianne Udow has resigned as Director of the Department of Human Services to become head of a joint venture between Blue Cross/Blue Shield and U of M Health Systems. This joint venture has as its mission the improvement of patient care in the state by researching changes in cost and practices.
Ismael Ahmed has been named by the Governor to succeed Ms. Udow as Director of the Department of Human Services. Since 1983 he has been director of the Arab Community Center for Economic and Social Services (ACCESS)in Dearborn. He was recently appointed to the Board of Regents of Eastern Michigan University, a post from which he will have to resign in order to accept the Department directorship.
Don Koivisto has been appointed Director of the Department of Agriculture by the Michigan Agricultural Commission to replace Mitch Irwin. Koivisto is a farmer and former State Senator from Ironwood in the U.P.
Thomas Lewand has been elected Chairman of the Michigan Civil Service Commission replacing Susan Munsell who accepted a position in the Michigan Department of Treasury.
Tom Weber has been named Acting Commissioner of the Bureau of State Lottery replacing Gary Peters who left to accept an endowed chair at CMU and run for congress against Joe Knollenberg in Oakland County. Weber will continue in his Lottery position of Deputy Commissioner for Marketing, serving in a dual capacity.
Orjiakor Isiogu has been named Chairman of the Public Service Commission as he is appointed to the Commission to fill a vacancy resulting from the departure of Laura Chappelle. Osiogu was formerly head of the PSC’s Telecommunication Division and is also a former assistant attorney general.
General Thomas Cutler, Director of the Department of Military and Veterans Affairs, has come under investigation for allegedly remaining on the Federal military payroll to enhance his pension while receiving his state salary after his appointment to his current position by Governor Granholm. His top assistant, General Richard Elliott, allegedly did the same thing when Cutler appointed him as head of the Air National Guard. The investigation is being conducted at the Federal level.
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: firstname.lastname@example.org.
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