Legislative Report

November 2007

The State of Michigan finally has a 2008-09 budget in place. However it is not as sound nor as solid as one might expect it would be after months of partisan bickering and a thirty day continuation budget in place for the month of October in order to give the legislature and Governor time to finalize the budget. It took most of the month of October to enact a $42.9 billion total dollar budget of which $9.9 million is supported by General Fund revenue. The remainder is primarily made up by federal funds.

Ironically, the service tax, a lynchpin in the 2008 budget resolution may be pulled before it is ever implemented. A coalition of organizations, primarily representing small businesses, is seeking to get the service tax, which many believe is not uniform in its application, repealed. It is scheduled to go into effect on December 1, 2007. In early November as this article was being written, the Senate passed a bill (SB 838) to repeal the service tax. It now goes to the House for consideration. The Governor has vowed she will not consider any measure to repeal the service tax unless there is a corresponding bill to replace the revenue loss by repeal of the service tax. So the budget is not put to bed yet!

In the aftermath of the bitter budget fight there are hard feelings within and between the Democratic and Republican Parties. There are also some casualties and potential casualties as the result of the budget battle. State Representative Chris Ward, a Republican from Howell, became a casualty when he resigned as House Minority Floor Leader because he voted for the income tax increase which, in his opinion caused him to lose the confidence of his Caucus. Internal friction within the Republican caucus ensued as a result of his resignation.

Perhaps the most significant outcome of the resolution to the budget battle will be the recall efforts against a number of legislators who voted for either of the two tax measures, the income tax increase or the service tax. Two organizations are pushing the recall efforts for the most vulnerable of those legislators who voted for the tax measures. The Michigan Taxpayers Alliance and a group known as “Stop Hurting Michigan’s Kids” are actively pursuing recall of both Republicans and Democrats. There will be many administrative and legal challenges by those who are targets of the recall efforts before any elections are actually held. Stay tuned!

A large number of hearings were held on bills that have been lingering in various committees for months while legislators’ attention was focused on the budget. Some of the outcomes which may be of interest to seniors/retirees are reported below.

SB 79 removes the sanctions (a significant fine and fees) for possessing an unsigned vehicle registration form when asked to show it to a law enforcement officer. There have been many complaints that this is a harsh penalty for what is most likely a simple oversight and certainly not an intentional violation of the law. The bill has passed both houses and is on its way to the Governor for signature.

HBs 347, 348, 350 and SB 16 all pertain to income tax check-offs for facilitating contributions to various funds created within these bills. HB 347 is now Public Act 133 which amends the Income Tax Act to allow for four new income tax checkoffs and establishes a number of policies pertaining income tax checkoffs. Beginning in the 2008 tax year, taxpayers will be able to contribute at least $5 of their income tax refunds to the Prostate Cancer Research Fund created by SB 16 now Public Act 135, Armanda’s Fund for Breast Cancer Prevention and Treatment created by SB 248 now Public Act 134, the Animal Welfare Fund created by SB 350 now Public Act 132, and the Michigan Housing Community Development Fund created by Public Act 479 of 2004. As noted, these four bills have been signed into law by the Governor.

HB 4819 is a bill which would require immediate dissemination of information and action by authorities when a vulnerable senior citizen is reported missing. The bill applies to individuals 60 years of age or older who are reported missing and believed to be incapable of returning to his/her residence without assistance. Such information would have to be provided by a “person familiar with the missing senior.” A law enforcement agency receiving such information would be required to begin an investigation concerning the missing senior as soon as possible after receiving the missing senior report notification and prepare a written report within five hours after receipt of the initial notification. The missing senior report would have to be disseminated to all law enforcement agencies in the area where the missing senior resides and was last seen. The law enforcement agency could also elicit the assistance of both the broadcast and print media. The bill has passed the House and gone to the Senate Committee on Senior Citizens and Veterans Affairs.

SB 387 and SB 388 and HBs 4050, 4317, 4680 are bill on which hearings were held in the House. All of the bills address the issues of affording consumers more flexibility in the purchase and use of gift cards. Among the protections in the various bills are ones that would prevent a gift card from expiring, the issuer altering terms and conditions of a gift card after it is issued, prohibiting the charge of a fee or surcharge for using a gift card, thereby diminishing the face value of a gift card, and the conditions under which a gift card could be declared abandoned and escheated, and other deceptive practices regarding gift cards. Several of the bills were reported out of the Commerce Committee and appear to be moving toward final passage.

HB 5339 is a recently introduced bill which would require forfeiture of a retirement allowance of a member or retiree of a public pension system who is convicted of or enters a no contest plea for a felony stemming from his/her service as a public employee. Such a conviction or plea is considered a breach of public trust. Currently a judge has discretion in deciding whether to order forfeiture of one’s pension under these circumstances. This bill would remove that discretion and mandate forfeiture. Also the bill prevents health care coverage for those who are deemed felons resulting from a breach of public trust but does mandate hospitalization and medical coverage to his or her beneficiaries. The bill has been referred to the House Committee on Government Operations.

HJR BB is a recently introduced joint resolution which would amend the Michigan Constitution to create a part time legislature. The Joint Resolution provides that the legislature, beginning in 2009 and every year thereafter, shall only meet between the second Wednesday in January and April 30th, except when it is called to convene on extraordinary occasions. It also provides for six two-year terms in the House (12 years) and three four-year terms in the Senate (12 years). Finally, the Joint Resolution provides that the salary of a legislator shall be $40,000 per year. The Joint Resolution has been referred to the Committee on Government Operations.


Absentee Ballots — The Michigan Court of Appeals recently ruled in a case challenging the practice of the clerk of City of Detroit of mailing absentee ballots to senior citizens without the seniors requesting absentee ballots. The Court ruled that this violated current state law. There is no provision to allow a municipal or county clerk to unilaterally mail ballots to senior citizens. Some jurisdictions are unilaterally mailing ballots while others are not. All are now scrambling to understand the impact of the Court’s decision and awaiting clarification and guidance on this issue from the Secretary of State.

Michigan Presidential Primary — An Ingham County Circuit Court judge recently ruled that part of the recent law providing for a January 15th presidential primary in Michigan was unconstitutional. The basis of the ruling was that the law provided that names of voters could be provided exclusively to the Republican and Democratic Parties and because the presidential primary would cost some $10 million, this constituted using public funds for private purpose. Because the change in date to January 15 violated both party’s rules, sanctions were expected to be imposed by both national party organizations. Consequently, the leadership of both Michigan party organizations is debating whether they should change back to traditional party caucuses. This recent Court decision throws a new wrinkle into the mix and may make their decisions easier.

State Assistance in Mortgage Foreclosure Problems — The State of Michigan has initiated several assistance programs for those facing problems in meeting their mortgage commitment. First, there is a new toll-free telephone number for individuals facing foreclosure due to inability to make mortgage payments to receive counseling. The number is 866-946-7432. The state is offering another program which will help families currently with an adjustable rate mortgage be refinanced into a lower interest rate fixed mortgage. The final assistance offered is through a program called “Rescue Finance Program” which assists individuals with delinquent mortgages who are at risk of losing their homes. To qualify for this program, the family income cannot exceed $72, 250 and the price of the home cannot exceed $216,750. All of the programs are run by the Michigan State Housing Development Authority.

Northville State Hospital Sold — After a number of failed attempts dating back four years, Northville State Hospital has been sold for $31.5 million to REIS Northville, LLC which will convert the property into a combination commercial, office and residential development. The property sold for less than one-half the price which was offered at one time after lawsuits, administrative challenges and judicial admonishments to the state regarding the sale process.

Granholm Announces Presidential Candidate Endorsement — Not unexpectedly, Governor has announced her endorsement of Hilliary Clinton as the Democratic presidential candidate.

People in the News

Mary Lannoye has resigned as Governor Granholm’s Chief of Staff. She served in the Granholm administration as both Budget Director and Chief of Staff. She previously had been the Budget Director for Governor Engler. She did not announce future plans.

Linda Watters has announced her resignation as Commissioner of the Office of Financial and Insurance Services (OFIS). She is leaving to return to the private sector as a member of the risk management practice of KPMG, LLP in Chicago. She will be succeeded by Ken Ross who was appointed deputy commissioner earlier this year. He previously worked for the Michigan Credit Union League.

Representative Dave Hildenbrand has been elected by the Republican Caucus to replace Chris Ward as House Minority Floor Leader. Ward resigned the leadership position. Hildenbrand is from Lowell.

Sam Washington, who served as Director of the Michigan United Conservation Clubs until this year when he resigned to become a lobbyist, died at age 60. Mr. Washington was also a member of the Natural Resources Fund Trust Board.

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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