Legislative Report

December 2009

Call it a hot potato. Call it a political football. Call it pure insanity. There are many other names one could use to describe the budget which was recently passed by the legislature and signed into law by the Governor. The aftermath of a very partisan, contemptuous, inadequate and shortsighted process leaves politicians still bickering and playing defense regarding their roles in the process.

Senate Majority Leader Mike Bishop is insisting that the cuts made by the Republicans were necessary and responsible. Governor Granholm insists the vetoes she made to the Republican drafted budgets presented to her were also necessary and responsible. House Speaker Andy Dillon has the least to say and attempts to bridge the gap between Mr. Bishop and Governor Granholm. Those responsible for providing services to citizens are left to deal with the damage created by a broken process and are trying to make sense of the results.

The issues boil down to all politicians being reluctant to take the bold step to address the problem of inadequate revenues created by an inadequate tax structure. Republicans refuse to entertain any meaningful revenue increases and believe budget cuts are what the public is demanding. The Democratic leadership gives lip service to the need to increase revenues but have not put forth a solid comprehensive plan for doing so. In the meantime, school districts suffer, local governments suffer, university students feel the impact of the cuts and politicians seek to remain in office based on their stance on state expenditures and cobbling together funds to get by for one more year...And the following year? Be prepared to see history repeat itself.

Governor Granholm spent much of the month traveling to various communities, school districts, and universities making her case for the need for additional funding to restore the cuts which were made. Students protested the budget cuts by marching on the Capitol and holding campus rallies, but the problem is not being fixed. It is going to be a very long fiscal year between October 1, 2009 and September 30, 2010. Prepare yourself for much political infighting and name calling and reductions in governmental services at both the state and local level.

Representative Alma Wheeler Smith, a candidate for governor, took the first bold step by proposing a specific plan for revising the current revenue structure and creating some $6.5 billion to fund state government programs and school aid. Her plan calls for eliminating some $3 billion in current credits (i.e. film credits, economic development credits, etc.), $2 billion raised by establishing a graduated income tax, and $1.5 billion through sales tax on services. Don’t expect anyone to run with this proposal. But the fact that she came up with a specific plan is a first step and may allow for eventual recognition by the power structure when the time is right.

There were a number of committee meetings held during the month of November with some movement of bills out of committees. The following are bills which received attention during November and which may be of interest to seniors/retirees:

Health care pooling plan for all public sector employees/retirees — Hearings continue on HB 5345, the so-called Dillon Plan, which would place all public sector employees in the state in one pool for the plan design and administration of their health care benefits. The pool also would include retirees from public sector employers. It would be administered by an appointed state board. The plan initially received much attention and mixed support. As hearings progressed, it has become clear that there may be some serious flaws in the concept. Chief among them is whether the purported $900 million savings is realistic. Another objection to the concept is the impact it may have on collective bargaining. Much of the testimony at the many hearings has been against the plan. The House Public Employees Health Care Reforms Committee has announced that it will utilize workgroups to explore specific areas of the complex bill. Workgroups are less formal than legislative committees and allow an exchange of views from various stakeholders. There will be one Republican and one Democratic legislator from the Committee on each workgroup. The workgroups will separately focus on the impact of the bill on retirees, the composition and structure of the politically appointed board overseeing the pool, the opt out provisions of the bill, etc. The Committee chairperson, Representative Pam Byrnes expects each workgroup to report back to her and the Committee in January. The Committee will consider changes to the bill based on the workgroups’ recommendations.

Development of influenza policy applicable to elderly — SB 722 and HB 4172 are bills which would amend the Public Health Code to require hospitals to develop a strategic plan for managing its supply of influenza vaccine. The plan would have to be consistent with the federal Center for Disease Control and Prevention (CDC) or the Advisory Committee on Immunization Practices of the CDC. Under both bills, during the flu season, the hospital would have to inform each person 65 years or older who is admitted for a period of twenty-four hours or more that the flu vaccine is available and provide the vaccine for those persons for whom the vaccine is not contraindicative. The vaccine would have to be given to all consenting adults with documentation made in the patient’s record. If the vaccine is not administered, the documentation would have to indicate the reason why. SB 722 has passed the Senate and has been reported out of the Committee on Health Policy in the House. HB 4172 has been reported out of the House Committee on Health Policy and is on the floor for consideration.

Utility shut-off protection and reporting — Three bills pertaining to the shutoff of public utilities are now law after being signed by the Governor. HB 4386 is now PA 152. This new law requires a municipally owned natural gas or electric utility to postpone a shut-off of service for up to 21 days if the customer or a member of his or her household was a critical care customer or had a certified medical emergency. “Critical care” refers to the use of documented home medical equipment or a life support system. “Medical emergency “refers to any condition documented by a physician or public health official on official stationery or a company provided form. There could be additional 21 day postponements. HB 4650 is now PA 153. This law allows the Department of Human Services to operate an electronic payment process with participating utility providers for the payment of low income customers’ utility bills. The customer will have to authorize the utility company to provide certain customer information to the Department of Human Services. Eligibility requirements for electronic payments will have to be established by the Department of Human Services. HB 4655 is now PA 154. This new law requires a municipally owned utility company to notify the Public Service Commission of any shut-off of service that resulted in death or serious injury. The Public Service Commission could investigate any shut-off resulting in death or serious injury and refer the matter to the Attorney General for possible civil action against the utility.

Clarification of babysitting services — HB 5514 is now PA 155. This new law amends the Child Care Licensing Act to specify that a family child care home does not extend to an individual providing babysitting services for another individual. Providing babysitting services means caring for a child on behalf of the child’s parent or guardian for annual compensation that is less than $600 or is less than an amount which, according to the Internal Revenue Service, does not obligate the parent or guardian to provide a form 1099-MISC to the individual for compensation paid during the year for the services. The bill was initiated after an individual was cited by the Department of Human Services for violating the child care licensing act by watching a neighbor’s children one hour before they caught the bus to school.

Requirement to depict both peninsulas on official state documents — With the Governor signing HB 4995, it has become law as PA 147. This law requires any illustration, image, or depiction of the State of Michigan on a publication or item produced by a state department or agency to include both the Upper Peninsula and the Lower Peninsula. The new law would not apply to a publication or item produced before the bill’s effective date, thereby allowing those items to continue to be used until their supply ran out.


Express Scripts challenges award of prescription drug contract — The provider of prescription drugs for state employees and retirees, Express Scripts, has appealed the award of a three year $878.9 million contract to Blue Cross Blue Shield of Michigan (BCBSM) for prescription drug services effective January 1, 2010. In addition to an administrative appeal, Express Scripts went to Ingham County Circuit Court and sought an injunction which was granted. The State filed an emergency appeal of the lower court’s decision to the Court of Appeals and in a 2-1 decision that Court overturned the Circuit Court ruling. Express Scripts is now requesting leave to appeal to the Michigan Supreme Court. The allegation is that the process was flawed in terms of scoring methodology. The Court of Appeals ruled that Express Scripts did not have standing to seek legal action. In the meantime, the State Administrative Board has approved the award of the Contract to BCBSM which will provide the prescription drug services to state employees. It is not known what will happen if the Supreme Court grants Express Scripts leave to appeal. Regardless of what happens, it is not anticipated that there will be any interruption in service to retirees. Retirees should continue to utilize Express Scripts until they are notified otherwise by the Civil Service Employee Benefits Office.

Consumers Energy Refund Ordered — The Public Service Commission has ordered Consumers Energy to refund to its customers some $39.6 million. This is the amount above the approved rate collected by Consumers Energy. An additional $73 million was ordered refunded to customers resulting from the Palisades Nuclear Power Plant sale. Consumers Energy has until January 6, 2010 to file a plan with the Public Service Commission for refunding the money.

Candidates’ primer prepared — A nonpartisan group of lawyers, lobbyists, and governmental observers, many of whom have served in previous state administrations, have prepared a document for candidates for governor entitled “Next Government Project.” The intent of the document is to prepare the candidates so that they can be responsive to the issues they will face, if elected. It is also the intent of the preparers that the document will elevate the level of debate among the candidates as they seek the state’s highest office.

Petition drive language approved — The Board of State Canvassers has approved language for petitions to be circulated by a Committee calling itself Fair and Affordable Insurance Rates. The petition will seek to get on the ballot measures that would do the following: 1) Cut property and casualty insurance rates by 20% beginning February 1, 2010, effective for one year. 2) Future rates could be subject to a hearing if proposed rates increases are more than 5% and mandatory if more than 7%. 3) Automobile insurance rate determination would be limited to factors of driving record, miles driven and years of driving experience. The head of the Office of Financial and Insurance Services (OFIS) could add to the list of factors by using the administrative rules process. 4) Rating territories could be allowed if the Commissioner of OFIS certified that the established territories are non-discriminatory. 5) Insurance premium costs would be limited to the type of claims that could serve as the basis for rate increase requests. 6) Policies could be cancelled only for non-payment, fraud or criminal behavior or changing the property to increase the risk it poses or causing it to become uninsurable. The only person identified with the Committee so far is State Senator Hansen Clarke.

Governor to merge two state departments — The Governor has announced she soon will issue an Executive Order merging the Department of Management and Budget with the Department of Information Technology. The current Department of Information Technology director, Ken Theis, will be the Director of the department when the merger is complete. Lisa Webb Sharpe, recently resigned as director of the Department of Management and Budget to accept the position of Senior Vice President of Administration and Finance at Lansing Community College. In the interim, Phyllis Mellon, Chief Deputy Director of the Department of Information Technology, will serve as acting director of the Department of Management and Budget.

Former House Speakers support Cherry for Governor — Four former Democratic House Speakers have endorsed Lt. Governor John Cherry in his bid for governor. Lew Dodak, Gary Owen, Bobby Crim and Curtis Hertel have thrown their support to Cherry because of his governmental experience. Cherry has spent nearly thirty years in state government. All four former speakers indicate they support eliminating term limits but do not believe the public is prepared to accept this change. Other announced Democratic candidates for governor are Representative Alma Wheeler Smith, Representative, John Freeman and George Perles. House Speaker Andy Dillion and Lansing Mayor Virg Bernero are giving serious thought to running for governor.

People in the News

Attorney General Mike Cox, went on the defensive after a state policeman gave a deposition in a lawsuit concerning the state police role in investigating an alleged party at the Manoogian Mansion, the official residence of the Mayor of Detroit. The state policeman testified that Mr. Cox essentially stopped the investigation of allegations that former Mayor Kilpatrick’s wife assaulted an exotic dancer at a party at the mansion. Mr. Cox, who is running for governor in 2010, went to great lengths to dispute the state policeman’s deposition. Several years ago, the investigation ended with Mr. Cox characterizing the party “urban legend.”

Mike Nofs, a former Republican state representative, easily defeated current Democratic State Representative Marty Griffin in the November election to replace former State Senator Mark Schauer who is now a U.S. congressman. Nofs’ victory gives the Republicans 22 -16 majority in the state senate.

James Byrum, resigned as Chairman of the Agricultural Commission, in protest of the Governor’s Executive Order removing the Commission’s authority to appoint the department director. The director’s appointment will now be a gubernatorial appointment.

Dave Bing, Interim Mayor of Detroit, easily won a four year term as Mayor of Detroit. Bing was previously elected to fill the remainder of Kwame Kilpatrick’s term. The former professional basketball player and businessman defeated Tom Barrow for a full term as Mayor.

Pam Byrnes, a Democratic State Representative from Chelsea, announced that she will introduce a proposed constitutional amendment to get the issue of same sex marriage on the ballot.

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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