Legislative Report
February 2009
The primary focal point for both the executive and legislative branches of state government for the next year (and beyond) will be exercising fiscal responsibility during these very unusual economic times. Both the Governor and legislative leadership have acknowledged the difficult task facing state officials as resources diminish and demand for services continues. The Governor is preparing to reduce the number of state departments and ask for voluntary pay reductions by elected officials and state employees. Every traditional economic indicator reveals a significant downturn which results in the required level of income needed for state operations not being available.
The most recent estimating conference involving the heads of the House and Senate Fiscal Agencies and the State Treasurer consulting with economic experts results in a consensus that the state will have a 2009 general fund fiscal year deficit of some $157 million (after factoring in the 2008 book closing balance of $458 million). The estimated deficit for fiscal year 2010 is some $1.5 billion. A report prepared by the highly respected nonpartisan Citizens Research Council (CRC) indicates an average $840 million shortfall each year between 2009 and 2017. This problem is caused by the state’s structural financial problems being exacerbated by the national recession which has hit Michigan harder than other areas of the country. The CRC report notes that short term solutions to the state’s structural budget problems make reaching long term solutions more difficult. One thing is for sure, we will all be affected by the state’s economic climate both individually and collectively.
Perhaps Senator Mike Bishop, Majority Floor Leader, best described the severity of the problem when he stated in an interview with the Eccentric Newspapers, “There will be a ‘different form of government.’ He went on to say they would have to cut “important stuff.”
Turning to legislation, the emphasis this month is on last session bills which were signed into law by Governor Granholm. A few of those new laws that as senior/retirees we should be aware of are summarized below.
Business restroom availability under certain conditions — HB 5046 is now PA 469 — This new law requires a retail business that has a toilet facility for its employees to allow customers to use the toilet facility during normal business hours if all the following conditions applied: (1) The customer requesting use of the employee toilet facility suffers from an “eligible medical condition” (Crohn’s disease, ulcerative colitis, inflammatory bowel disease, etc) or any other medical condition that requires immediate access to a toilet facility or uses an ostomy device, (2) Two or more employees of the retail establishment are working at the time the request is made, (3) The customer presents the retail establishment a statement written on a prescription form and signed by a doctor indicating the customer suffers from an “eligible medical condition” or uses an ostomy device, (4) The retail establishment does not normally make its restroom available to the public, (5) The toilet facility is not located in an area which would pose a health or safety risk to the customer or a security risk to the retail establishment, (6) a public restroom is not immediately accessible to the customer. A retail establishment would not be civilly liable for an injury or death arising from the use of the employee restroom, unless certain conditions applied.
Revision in Reciprocal Retirement Act — HB 6113 now PA 502 — Currently the Reciprocal Retirement Act provides that an employee who leaves the employment of one reciprocal unit (the preceding unit) and enters the employment of another governmental unit (the succeeding unit) is entitled to a retirement allowance payable by the preceding reciprocal unit’s retirement system under certain conditions. One of the conditions is that the individual enter the employment of the succeeding unit within 15 years after the date of leaving the employment of preceding unit. This new law increases the time the individual has to become employed by the succeeding unit to 20 years instead of the previous 15 years.
Changes in investment of public retirement funds — HB 6500 which is now PA 425 was covered in detail in the December Sera Nade Legislative Report. Space considerations will not allow a repeat of the specific provisions of the new law. Basically, the law allows the State Treasurer to invest certain percentages of the investment portfolios in specific types of investments. The law is intended to provide guidelines to the Treasury Department to allow sound investments to be made while maximizing the return with minimum risks.
Regulation of cemetery operations — SB 674 and HB 6036 are now PAs 478 and 477, respectively. These are very comprehensive amendments to the currents laws which will provide better controls over the operation of cemeteries to protect the public. There have been recent indictments of owner/operators of cemeteries in Michigan for the manner in which trust accounts were handled and the adequacy of funding for the care and upkeep of the cemeteries. These two new laws are intended to overcome the weaknesses in cemetery operations which allowed the misdeeds to occur. The public is better protected by the passage of these bills. Greater state oversight is required. Space limitations will not allow a detailed enumeration of all of the provisions of the new amendments to the law.
Driver improvement course in lieu of receipt of points for moving violations — HB 1066 is now PA 568. This new law allows certain drivers cited for moving violations to take and successfully complete a basic driver improvement course approved by the Secretary of State in lieu of receiving points on their record. The posting of the points to a driver’s record and notifying the insurance company of the violation would be postponed for ten business days to allow time for the Department of State to notify the driver of his or her eligibility to take the course and the driver time to respond regarding his or her intent to take the course. Drivers with commercial operator’s license, drivers who have previously attended a course, had three or more points on his or her record, drivers whose license had been suspended, and drivers whose moving violation was a criminal offense or speeding in a work or school zone would not be eligible to take the course in lieu of receiving points. The cost of the improvement course could not exceed $100.00.
Ignition interlock device for certain convicted drunk drivers — HB 4289 is now PA 461. This law amends the state vehicle code to permit drivers convicted of certain alcohol related driving violations to operate a vehicle only if the vehicle has a properly installed ignition interlock device to prevent the automobile from starting if the driver’s blood alcohol content is above a certain level. The law allows for the impounding of a vehicle if the driver was required to have such a device and the vehicle did not have it. If a person operates a vehicle without such a device, authorities may immobilize the vehicle until the person obtains a restricted license and obtains the ignition interlocking device. The law also requires a driver license suspension and subsequent use of an ignition interlock device when driving on a restricted license for a 0.15 blood alcohol level violation and adds a criminal penalty for operating a vehicle with a blood alcohol level of 0.15 or more, and requires participation in an alcohol rehabilitative program for a blood alcohol level of 0.15 violation.
Controlling property appraisal practices — HBs 4054 (PA 531), 6148 (PA 528) and SBs 356 (PA 529) and 343 (PA )530 constitute a series of new laws addressing improper practices employed by home appraisers during the height of the housing boom. Basically, the laws make it illegal for real estate companies to collude with appraisers to establish a home appraisal higher that it should be and make certain practices that cause appraisers to provide false appraisals illegal. The series of bills also establishes legal sanctions for certain practices.
Newly reintroduced bills:
There were a number of bills that failed to pass the last legislative session which were reintroduced in January. This is a common practice to immediately reintroduce previously failed bills. Among the bills included in this category is SB 6 a bill to provide for a permanent absentee voter list if the voter is at least 60 years old or is physically disabled.
More importantly, HB 4072 has been reintroduced as a replacement for the former HB 5545 which SERA strongly opposes. HB 4072 would transfer the responsibility for the plan development and administration of the retiree health care program from the Department of Civil Service to the Office of Retirement Services. The goal of this bill is to combine the state retiree health plan with the Michigan School Employees Retirement System which is vastly different from the administration of the plan by the Office of Employee Benefits which is part of Civil Service. Once again, the SERA leadership encourages its membership to immediately contact their state representatives by phone, e-mail or letter and ask them to oppose passage of HB 4072. Each chapter president will be sent talking points to support your request to your legislator.
Miscellany
House Democrats organizational results — Speaker Andy Dillon has completed the organization of the new legislature which consists of 45 new representatives out of 110 total members. Democrats control the 95th legislature 67 to 43 Republicans. The committee structure has very few changes including splitting the former Local Government Committee into the Intergovernmental and Regional Affairs Committee and the Urban Policy Committee. The former House Retiree Health Care Reforms Committee is apparently no longer active. Most of the key bills formerly in that Committee have been referred to the Judiciary Committee which is chaired by Mark Meadows, formerly head of the Retiree Health Care Reforms Committee.
The top leadership posts under Speaker Dillon are Speaker Pro Tempore Pam Byrnes (Chelsea) and Kathy Angerer (Dundee), Majority Floor Leader. Mark Meadows (East Lansing) was selected to serve as Assistant Leader in the House Democratic Caucus, a post which did not exist last legislative session.
Legislative Committee on Governmental Efficiency is a group established by the legislature to look at ways to streamline government and recommend cost saving measures. The task of the Committee was undertaken by a series of workgroups covering various areas of state government. There was a workgroup formed to make recommendations regarding public employee benefits. So far, this workgroup’s recommendations include (1) the need to determine the appropriate level of cost to be borne by each level of government for employee health care coverage. (Studies show Michigan state government is below average in terms of the monetary burden placed on employees. (2) Charging newly hired state employees a different rate for their health care coverage. (3) Allowing all public sector employees to purchase coverage off of the state’s health plan. (4) Requiring local units of government to make their employees pay at least the same percentage state government employees pay on their health care insurance in order to receive all of their state funding. (5) Conducting health plan reviews to provide more incentives for healthy behavior. (6) Pre-funding retiree health care benefits through federal stimulus money or bonding.
Anticipated ballot proposal on Health Care — Former Representative Lorence Wenke (R.- Galesburg) announced that he is considering undertaking the task of collecting signatures to get a proposal on the ballot that would require government employees to pay 25% of the cost of their health care coverage. He estimates such a proposal would generate a cost saving of $1 - $2 billion. The 25% is based on what Mr. Wenke’s research shows that employees in the private sector pay for their health insurance. The term limited Wenke introduced a similar bill last legislative session which did not get out of committee.
Michigan lawsuit against Bear Stearns — The State of Michigan was named lead plaintiff in a federal class action lawsuit against investment firm Bear Stearns which received a large amount of bailout money from the federal government. Michigan allegedly lost some $62 million due to misleading advice given by the firm. Nationally, state and local governments lost billions of dollars in funds invested through Bear Stearns.
Attorney General Cox loses lawsuit against BCBS — Ingham County Circuit Court Judge Paula Manderfield reversed an original opinion and ruled that Blue Cross Blue Shield did not violate its non-profit status by providing its for-profit subsidiary, the State Accident Fund of Michigan, some $100 million to purchase other insurance companies. Cox claimed the Michigan law granting BCBS non-profit status did not allow it to give money to a for-profit subsidiary to purchase additional insurance companies. Manderfield initially agreed with Cox, but in the final opinion ruled the law did not bar the actions which Cox claimed were illegal. Attorney General Cox recently announced that he will appeal Judge Manderfield’s decision to the Michigan Court of Appeals.
Civil Right Commission narrows director candidate pool to two — The Civil Rights Commission has narrowed a field of six candidates down to the two finalists for the directorship of the Department. Among the finalists is the chairperson of the Commission, Kelvin Scott of Grosse Pointe. The other finalist candidate is Ingrid Scott-Weekley of Caledonia. A final decision is expected at the Commission’s February meeting.
People in the News
Possible gubernatorial candidates: Democrats John Cherry has announced the formation of an exploratory committee in anticipation of his candidacy for governor. Other Democrats who are likely to run are Wayne County Executive Robert Ficano, Flint Mayor Donald Williamson and MSU Trustee George Perles. On the Republican side, Senator Tom George has announce the formation of an exploratory committee. Other Republicans expressing a possible interest are Oakland County Executive L. Brooks Patterson, Attorney General Mike Cox, Secretary of State Terri Lynn Land, and Congresswoman Candice Miller.
Marilyn Kelley, a Michigan Supreme Court Justice since 1996, has been elected to a two year term as Chief Justice of the Court.
James Epolito, President of the Michigan Economic Development Corporation, has resigned from that post to accept the presidency of Delta Dental. Mr. Epolito was the only non-department head to be a member of the Governor’s cabinet.
Robert Weiss, a Genesee County Probate Judge, former County Prosecutor and former member of the MSU Board of Governors died recently.
William Keith, a former state representative from Garden City who later relocated to Haslett died recently at age 79. Mr.Keith represented western Wayne County from 1973 -82 and 1993 -94. Upon moving to Haslett, he became well known in local music circles.
Robert Bobb, a financial expert and consultant from Washington D.C. has been appointed Financial Manager for the Detroit Public Schools by Governor Granholm. Mr. Bobb will have total control of the District’s finances for a one year period to try to get the District out of financial chaos. He was one of several individuals recommended to the Governor by the State Superintendent of Public Instruction.
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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