Legislative Report
September 2009
During the month of August, the news from state government was dominated by two issues: finalizing the 2009-10 budget which begins October 1 and the health care benefits pooling proposal of Representative Andy Dillion. Both issues appeared to get equal attention from those involved in and influencing policy making in state government.
The following is a summary of the status of these two issues as this report is being written in early September.
Finalizing the 2010 state government appropriation
With time running out, there is no visible progress on the governor and the leadership of the two legislative chambers coming to closure on the budget. There appears to be little transparency in the negotiations. The Republican controlled Senate has passed bills with significant cuts, while the Democratic controlled House version of the bills calls for much higher spending. How to resolve the major differences in the amounts of the two versions has become a major issue which could result in the closing down of state government due to lack of appropriations for state operations.
The Democrats do not agree with the amount and nature of the cuts reflected in the Senate version of the appropriation bills. There is not enough revenue to finance the House controlled Democrats version of the bills. The negotiations appear to be focused on how to reach a compromise by increasing revenue proposed by the Democrats and accept some of the cuts proposed by the Republicans. Understandably, neither side is anxious to propose tax increases but the Democrats believe the Republican cuts are too severe.
The Governor is not exposing her negotiating position to the public. This is frightening to some interest groups because they fear their sacred cows will be offered up in the process. Apparently there is consideration being given to increased taxes on beer (1.9% for twelve ounces) and/or liquor and tobacco products (25 cents). Also, it is rumored that a 6% tax on entertainment and sports is up for consideration. Lobbyists representing these business interests are attempting to discourage any serious consideration of taxing the entities they represent. Fighting against cuts are major nonprofit agencies dealing with human services. Unless a compromise is reached, state government could shut down on October 1, 2009.
The problem is that schools, universities and local units of governments are depending on receiving revenue from the state, but do not know how much they will get. Thus, they cannot finalize their budgets for the new fiscal year, some which began July 1 while others begin October 1. So the lack of decision making in Lansing has a tremendous impact on operations of all public entities which are dependent on receipt of a large amount of government funds. The ripple effect is enormous and unsettling for these units.
The Dillion proposal to pool public employees health care benefits
Much has been written editorially and otherwise about the proposal by House Speaker Andy Dillon to have the health care plans of all public employees and retirees in the state be developed and administered by the state. Mr. Dillon alleges that some $900 million dollars can be saved by this proposed pooling process. He initially introduced his idea in general conceptual terms and individuals and organizations lined up both in support of and in opposition to the proposal. It was not until the latter part of August that he released a document explaining in more detail how the plan would work. He also appointed a special House Committee to hold hearings on the bill which is yet to be introduced. It appears that Mr. Dillon’s release of the details of how the plan would work has not lessened the skepticism and opposition to the proposal. Much of the skepticism comes from fellow Democrats.
Briefly explained, the program would work as follows:
- A twelve member Michigan Health Benefits Program Board would be responsible for developing health care plan options to be offered to the governmental entities mandated to be under the state plan. The board would have two members who serve because of the positions they hold in state government: The director of the Office of the State Employer and the state budget director. The Speaker of the House and the Senate majority leader would each appoint a member possessing experience in employee benefits design or value-based insurance design or health care actuarial science. The governor would appoint a total of eight members including five representing state, municipal, public education, public safety and retired public employees and three representing county, municipal, and public education employers.
- The Board members would serve four year staggered terms. Initially, the labor employee, public employer, and independent advisor would serve two year terms. Another labor employee, retiree and independent advisor would serve three year terms.
- The Board would be an autonomous unit within the Department of Management and Budget. Members would receive no compensation but could be reimbursed for expenses.
- The Board could develop a wide array of plans with the unions being able to bargain on which plans the governmental unit would contribute to the cost and which of the governmental unit’s employees are covered.
- Members of the Board could be removed from the Board for cause.
- The plan would be open to private sector employers.
- The plan would be mandatory except a government could opt out by demonstrating to the Board that their plan costs 5% less than the plans offered by the state.
- Current plans in effect on January 1, 2010 would continue until the contract for the coverage expired. The State plan would then be required to provide coverage.
- The cost of the plan would be paid from a special fund into which all participating governmental entities would pay. The fund could not lapse into the state’s General Fund.
Representative Pam Byrnes, a Democrat from Chelsea, has been named to chair a 13 member Public Employees Health Care Reform Committee composed of eight Democrats and five Republicans to hold hearings on the plan and recommend its continuance in the legislative process. Other members of the committee are Democrats: Tim Melton (Vice Chair), Harold Haugh, Bert Johnson, Michael Lahte, Daniel Scripps, Kate Segal, and Woodrow Stanley. Republicans: Phil Pavlov (Minority Vice Chair), James Bolger, Bob Genetski, Matt Lori, and Bill Rogers. The makeup of the committee includes all demographic characteristics of the state. The Committee’s first meeting was held on September 3, even though there was not a bill drafted yet.
Legislative action on other bills of interest:
Crimes against vulnerable adults — A series of bills (HBs 5011, 4618,4727, 4620, 4626, and 4971) addressing abuse of vulnerable adults including financial abuse, have passed the House and gone to the Senate Committee on Judiciary. The bills, among other measures, define the term “vulnerable adult,” provides harsher sanctions for crimes against such adults and allows complaints for alleged crimes against vulnerable adults to be signed by a person other than the victim. This item was reported on in the July Legislative Report.
Regulation of Insurance company’s unfair and prohibited trade practices — These bills (HBs 5144-51) were reported on in detail in the August Legislative Report. They are very controversial bills strongly opposed by the insurance industry which would prohibit insurance companies from denying claims without sound justification and engaging in unfair trade practices as defined in the bills and provide penalties for companies and company executives who violate the provisions set out in the bills. The bills have passed the House and gone to the Senate Committee on Economic Development and Regulatory Reform.
Miscellany
State’s Helping Hands website — The state has added a new feature to its website which compiles all human services programs available from the state and offered by some nonprofit agencies on one page. Citizens can use this webpage to determine if they are eligible for various services or be guided to other websites to receive more information. Eligible individuals can apply for food stamps and also apply for unemployment benefits by using this webpage which is part of the State of Michigan’s official website.
Senate votes to overturn Governor’s Executive Order on Department of History, Arts and Libraries (HAL) — Senate Concurrent Resolution 18 which would reject the recent Executive Order transferring the functions and activities of HAL was passed by the full Senate. If the House were to pass a similar resolution, the Executive Order would be null and void. At the same time, the Senate passed a number of bills transferring the duties and functions of HAL to the Department of State. Governor Granholm’s Executive Order had dispersed the functions and activities to a number of various state agencies. SBs 503-527 significantly changes the allocation of HAL functions as contained in the E.O and places most of them in the Department of State. This bill has passed the House and gone to the Senate where it is awaiting committee assignment. In the meantime, the Governor issued an Executive Directive requiring the Superintendent of Public Instruction to appoint an Education employee as the State Librarian. Librarians throughout the state were upset because the Governor’s Executive Order did not retain or provide for a state Librarian. The Executive Directive satisfied much of the librarian’s concerns.
Senate implements reductions in 2010 operating budgets — The Senate Secretary Carlol Viventi announced the allocations to each senator for office operations will be reduced by 14.75%. Also, both partisan and nonpartisan Senate staff offices will experience a similar reduction. Currently, each Republican senator receives $207,947 for staff and $60,745 for office operations; Democratic senators get $126,796 for staff and $60,745 for office operations. (Senators from the party in control receive the larger staff allocations.) The percentage reductions will apply to these amounts beginning October 1.
Investigation of confrontation between senators completed — Republican Senate Secretary and the Democratic Assistant Secretary have completed their investigation of an alleged confrontation between Senator Roger Kahn of Saginaw and Irma Clark-Coleman of Detroit. Clark-Coleman alleged that Kahn entered her personal space during a verbal spat on an elevator and she believed he was going to hit her. There were two senators and one staff person who witnessed the incident. The investigation revealed that there was insufficient evidence of wrong doing by Senator Kahn.
People in the News
Representative Judy Nerat a Democrat from Wallace announced that she is suffering from multiple myeloma and being treated at Froedtart Hospital in Milwaukee.
Representative Marty Griffin (D) and former Representative Mike Nofs (R) — were victorious in the primary election to fill the 19th state Senate seat vacancy created when Mark Schauer resigned to successfully run for the 7th District U.S. Congress seat.
Representative Rashid Tlaib — a Detroit Democrat is facing possible recall for her stand on the location of a second bridge linking Detroit with Canada. The owner of the Ambassador Bridge wants a twin bridge built while Tlaib supports a bridge at a different location. A recall petition has been filed with the Wayne County Elections Commission.
Richard Berstein, Chair of the Wayne State University Board of Governors, is strongly considering running for Attorney General. Blind since birth, he is a lawyer who practices disability law and believes Michigan has a complacent attitude toward disabled individuals.
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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