Legislative Report
November 2009
The State of Michigan finally has a budget — of sorts. At the eleventh hour of the 30 day extension period for finalizing the budget, the Governor signed the last of the bills which allows Michigan officials to meet their legal obligation to approve a budget for 2010. The soundness and quality of that budget is highly questionable. The process used in arriving at the budget is embarrassing and, at times, childish. Partisan bickering ruled the day and left a number of citizens and governmental units trying to figure out how they will survive with greatly reduced appropriations.
The Republican Senate took the lead in the budget process with the concurrence of the Democratic House Speaker. Their approach was to reduce expenditures to come within revenue projections and use federal stimulus money to supplement areas of significant need. They were strongly opposed to raising revenue to meet what Democrats believed to be critical unmet needs of the state. Senate Majority Leader Mike Bishop became the focal point of a battle between the Governor and rank and file House Democrats. House Speaker Andy Dillion played an undefined role in the process at times appearing to support Mr. Bishop and at other times appearing to be aloof of the controversy between Bishop and the Governor. Rank and file House Democrats complained that they were left out of the loop in the budget battle by their leadership and had no real role to play in bringing resolution to the problem.
The Senate sent a package of bills to the House which they claimed was a balanced budget. $1.2 billion was cut out of their bills which the Governor claimed cut too deeply. There were promises made to fix any significant problems at a later date via supplemental appropriation. There were vetoes and threats of vetoes made by the Governor. Six appropriation bills were held by the Senate until the latter part of the month because it was believed the Governor would veto the bills or major portions of the bills in order to embarrass the Senate. Finally the last six bills were sent to the Governor and she did, indeed, veto major line items within the bills. The major cut came in the K-12 school budgets. Having already cut some $165 per pupil from the School Aid budget, the Governor cut an additional $127 per pupil from some 40 schools which were operating at a level above the statewide average as the result of a quirk in the law at the time Proposal A was passed in 1994. Other notable overall reductions were in Revenue Sharing and the Medicaid Program which affect nursing homes. The Michigan Promise Grant scholarship program for college students was eliminated. These are the areas the Governor wants to address through finding additional revenue sources. The Governor has asked her Department heads to prepare a plan for a possible 20% reduction in the current fiscal year. The gamesmanship continues.
So, Michigan has a $9 billion budget including $1 billion in stimulus money. It was a long time in coming and was not the result of a display of sound leadership by any members of the state’s leadership. It was an embarrassing spectacle which everyone hopes will not be repeated in the 2011 appropriation process. Sadly, I doubt that will be the case, however.
There was much legislative committee activity during the month of October. The following is a report on some of the bills which saw legislative attention and which may be of interest to seniors/retirees:
Health care pooling plan for all public sector employees — HB 5345 would provide that every public sector employee be placed in a pool for the administration and determination of their health care benefits. This pooling concept would be applicable to both active and retired public sector employees. The health care benefits pool would consist of over 400,000 individuals and would be administered by the State under the direction of a politically appointed Board. All public sector employees/retirees would lose the identity of their employer as it relates to their health care benefits.
Hearings are being held on this bill which is so complex that there is no consistency in terms of the subject matter of the testimony given before the House Public Employees Health Care Reforms Committee. The bill is like an elephant and those testifying before the Committee are addressing different parts of the elephant’s body. It leaves one wondering how all of this is going to come together for the Committee to reach a decision on the viability of the bill. Questions have been raised regarding the potential for eliminating collective bargaining, the bill’s applicability to state employees under the Michigan Constitution, the types of plan designs that will be cost effective, whether the $900 million savings is real, and whether this bill is really addressing cost containment as opposed to sound health care.
Adding to the confusion is a report prepared by a Lansing based think-tank that disputes the claim of the bill’s sponsor, House Speaker Andy Dillon, that the $900 million saving claim is real. This study shows that the implementation of this bill would cost the state some $870 million which creates a $1.8 billion gap in what the sponsor claims and what the respected economist who did the think-tank study claims. The issues in dispute are large. The Committee has not addressed them publicly. The SERA Council, represented by its Chair, Bob Kopasz and Legislative Chair Alvin Whitfield, testified before the Committee on November 5 and expressed its reservations about the bill. The hearings on the bill apparently will continue.
Tax amnesty bill — SB 884 is a bill which would create a 30 to 60 day tax amnesty period for individuals who are delinquent in paying prior years’ income tax obligations. The state treasurer would determine the amnesty period. The taxpayer would have to request a waiver and file and pay all taxes due in a lump sum payment or two approved installments if at least 50% of the tax and interest due, or $10,000 if the taxpayer were an individual, at the time the waiver was requested. Failure to pay delinquent taxes during the amnesty period would cause the taxpayer to be liable for a penalty of 20% of the amount of tax due in addition to any other penalty prescribed for refusing to file a return or pay a tax within the specified time. This bill is tie-barred to Senate bills 2, 69, and 838 which, means these bills must pass before SB 884 would become law, if passed. The bill has passed the Senate and gone to the House Committee on Tax Policy for consideration.
Low income heating assistance and shutoff protection — SBs 553, 554, and 555 are among bills contained in last month’s report which would permit the Department of Human Services to operate an electronic payment system with utility providers for paying the utility costs of low income customers. The bills also allow the Department of Human Services to share otherwise confidential information about applicants for and recipients of public assistance with public utility companies in order to defray their energy costs or delay their utility disconnection. These bills have been reported out of the House Committee on Energy and Technology and are before the House for consideration.
Inability to obtain driver license due to unpaid parking tickets — HB 4726 would reduce the number of unpaid parking tickets from six or more to three or more before the Secretary of State could refuse to issue a renewal drivers license to an individual. The number of handicapper parking violations remains unchanged at two or more to cause a “stop action” on a license issuance or renewal. Currently, if a person does not respond to a parking ticket within 10 days, the court can then notify the Secretary of State of the individual’s failure to appear. Three failures to appear or respond to parking violations will then subject the individual to being unable to renew his or her license and having to pay a $45 driver license clearance fee to the court. This bill has passed the House and gone to the Senate Committee on Transportation for consideration.
Dangling ornaments on rearview mirror of vehicle — SB 276 revises the vehicle code provision that prohibits a person from operating a vehicle with a dangling ornament or other suspended object that obstructs the operator’s vision, except as provided by law. The simple change deletes any reference to “dangling ornament or other suspended object” and merely provides that a person would be prohibited from operating a motor vehicle with an object that obstructs the operator’s vision, except as provided by law. The rationale behind this bill is that the current law has been unevenly applied by law enforcement authorities. Under this bill, the hanging of an object on the rearview mirror would not automatically allow law enforcement officers to cite a driver. There would have to be an obvious obstruction. The bill has passed the Senate and gone to the House Committee on Transportation.
Automobile and Health Insurance redlining — SB 166 is a bill which would prohibit the geographical location of a home or an automobile owner from being used in determining the cost of an insurance policy. For example, the cost of automobile and homeowners insurance in Detroit is inordinately higher than the rest of the state. Senator Martha Scott, the sponsor of the bill, has addressed this issue on a daily basis on the Senate floor for a number of years. The current bill had not had a hearing in committee. In a surprise move, motivated by a degree of devilment, the Senate discharged the bill from committee and immediately voted on it. The bill was defeated by a vote of 21 to 14 and did not aid in solidifying the relationship between Senate Republicans and Democrats.
Miscellany
Term limits in the Senate — In 2011, the Michigan Senate will consist of 29 new members out of a total of 38 Senate members. This massive change is attributable to term limits. While undoubtedly a number of the new senators will come from the House, there is no guarantee of this. It should make for an interesting Senate body with so many new faces. This does not bode well for future problem solving due to lack of institutional memory, etc.
Proposed Constitutional Amendment approved — The Board of State Canvassers has approved petition language for a proposed Constitutional amendment which would allow the opening of up to eight new casinos in Michigan. Five of the eight would be connected to horse racing tracks. A group known as “Racing to Save Michigan” is seeking to get before the voters language that would state “It shall be lawful to conduct casino gaming and enact laws as provided for in [Section 41 of Article IV] without further vote of the people.” Currently, Article IV, Section 41 of the state constitution provides that both a statewide and local vote of the people shall take place in order to authorize a casino. In order to get this issue on the ballot, some 380,126 valid signatures must be collected within 180 days. The incentive for getting approval of this proposed amendment is that revenue would be raised for state government, the School Aid budget and county government through taxes paid by the new casinos.
Power Ball coming to Michigan — The State Lottery has announced that the Power Ball game will be available in Michigan in 2010. Power Ball will join Mega Millions as the most lucrative lottery games available in Michigan. The availability of Power Ball results from an agreement reached with the 12 state Mega Million Consortium and the Multi State Lottery Association which operates the Power Ball game. Both games often have jackpots of over $100 million.
People in the News
Bob Davis, a former state legislator and U.S. Representative from St Ignace, died recently. He was elected to the Michigan House in 1966, Michigan Senate in 1970, and the U.S. congress in 1979 where he served until 1993.
Mike Simpson, a state representative from Jackson announced that he has a very rare blood disorder which will require extensive therapy. He will continue to serve in the House as he receives his treatment.
Irma Clark Coleman, a Democrat Representative from Detroit, was elected State Director of Michigan for the National Foundation for Women Legislators, the oldest national organization for women elected officials.
William Milliken, former governor and supporter of environmental issues, was honored by having the Tri-Centennial State Park and Harbor in Detroit named after him. Mr. Milliken served as governor from 1969 until 1983.
Jennifer Granholm, Governor of Michigan, has been named Education Policy Leader of the Year by the National Association of State Boards of Education. She was cited for expanding pre-school programs, supporting new graduation requirements, establishing Michigan Promise Grant scholarships, and the No Worker Left Behind Program.
Paul Reinhart, a veteran state employee who most recently directed the State Medicaid Office in the Department of Community Services, died recently at age 59. He formerly was Director of the Office of Health and Human Services in the Department of Management and Budget.
Robert Bobb, Emergency Financial Manager for the Detroit Public School System since March, has signed on for another one year stint beginning March, 2010. Mr. Bobb is credited with uncovering many financial irregularities in the School system.
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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