Legislative Report
January 2010
With the delicately balanced 2010 state budget finally settled, however inadequately, the focus of government officials in Lansing turned elsewhere. While a slight undercurrent still exists regarding the budget and the fallout from the funding levels, center stage was dominated by issues other than the budget. The two primary legislative issues during December were the race for education enhancement dollars in a contest sponsored by the federal government and the passage of a smoking ban, which becomes effective May 1, 2010, in most public places throughout the state. (The gaming floors in the Detroit casinos are exempt from the ban.) Michigan laws were revised to hopefully attract federal dollars through enhanced programs.
So, 2009 is history. From an economic standpoint it will be recorded as an unfortunate history. There is an old adage that goes, “history repeats itself.” Such is anticipated by government leaders, economist, and pundits as we move toward fiscal year 2011. The problems that plagued us for the past decade still exist. The structural deficit has not been fixed. We are getting through 2010 by using federal stimulus dollars which will not be available in 2011 unless the federal government puts in place an additional stimulus package. Everyone realizes that the 2011 budget will be short by some $1.8 billion which represents the nonrecurring amount of stimulus money used to balance the budget this year. Hopefully, 2009’s experience is a wakeup call that will cause the Governor and legislative leadership to make the necessary changes before finalizing the 2011 budget which begins on October 1, 2010.
Because of the precarious fiscal picture which everyone acknowledges exists and will resurface again in 2011, we as seniors/retirees need to be vigilant in watching for proposals which will come forth that may have a serious impact on seniors’/retirees’ economic livelihood. For example, there is a strong public perception that as retired state employees we are “fat cats” with Cadillac pension plans. There already have been suggestions that we should pay much higher premiums and co-payments/coinsurance for health care benefits (some as high as 25%) and/or have our health care benefits significantly reduced. Then there is the Dillon pooling plan (HB 5345) which it appears will negatively impact our pensions, if passed. There also appears to be a move afoot for the state to tax public retiree pensions. Still yet, we could suffer the unintended consequences of some of the other proposals such as elimination of some tax credits which benefit seniors/retirees or general increases in other taxes that may impact us. We must be very careful that the mix of changes being discussed do not come to fruition and accumulatively do severe economic damage to our membership.
The following is a status report on a specific piece of legislation, the outcome of which is very important to us as state retirees (space limitations prevent reporting on additional legislative bills this month):
Health care pooling plan for all public sector employees/retirees — Hearings continue to be held by the special committee considering HB 5345. The controversial nature of the bill is evidenced by the negative comments made by presenters at the hearings. Works groups have been established by the Committee Chairwoman, Representative Pam Byrnes. The two work groups that most pertain to our interests are (1) Retiree Plans represented by Committee members Representative Harold Haugh, Democrat from Roseville and Representative Bob Genetski, Republican from Saugatuck and (2) Board Composition represented by Representative Daniel Scripps, Democrat from Leland and Representative Phil Pavlov, Republican from St. Clair. The work groups are to report back to the chairperson in January.
A member of the House Public Employee Health Care Reforms Committee, Representative Pavlov, introduced HB 5671 which requires public employers to submit information on health care benefits to the Department of Management and Budget. The information includes the type of plans offered and the benefits provided under each plan; the total annual premium cost for each plan; the employee share of the annual premium cost for each plan; a description of other costs, such as co-payments or co-insurance; and the number of employees receiving individual and family coverage. All governmental entities would have to submit this information and the Department of Management and budget would have to compile this data and report it to the House and Senate. The Committee has been unsuccessful in obtaining this information from individuals who testified before the Committee. The absence of this data as the Dillon proposal was being formulated causes one to wonder what the estimated $900 million cost savings figure was based on. HB 5671 bill has been reported out of the Committee and is on the House floor for consideration. Several companion “vehicle” bills have been introduced by Representative Dillon to aid in the implementation of HB 5345, should it pass. These bills are HBs 5688 – 97. They remain in the Public Health Care Reforms Committee.
During the month of December, two attorneys representing two of the largest law firms in the state issued opinions that HB 5345 does not violate the state constitution as it relates to the Civil Service Commission having sole discretion over matters relating to compensation and benefits for state employees. These opinions fly in the face of an opinion issued by an attorney for the Legislative Service Bureau which stated the provisions of the bill do trample on the prerogatives of the Civil Service Commission. None of the three opinions have the force of law as does an Attorney General opinion. If the bill should pass, there most certainly will be a legal challenge on this issue.
Finally, there was a very public argument between Jeff Padden, the President of the firm which studied the Dillon proposal, and Mr. Dillon. Public Policy Associates had earlier issued a report indicating that the $900 million savings claimed by Mr. Dillon could not be achieved. At the time the report was released, Mr. Padden issued a statement emphasizing that his firm stood by the report and that if Dillon himself had commissioned the report, the findings would have been the same. After a poll was recently taken by EPIC/MRA showing between 59% and 72% of the public opposed the Dillon plan, Mr. Dillon issued a statement suggesting that the poll was a ploy using the Public Policy Associates study, done at the behest of the unions, to discredit his proposal in order to defeat HB 5345. Mr. Padden then wrote Speaker Dillon and asked for a public retraction of his statement and an apology to his company and the Public Policy Associates employee who authored the study, economist Doug Drake.
HB 5345 remains in Committee as the work groups complete their tasks and hearing on the bill continue. This is the most detailed report I have ever written on a bill, but I believe it is important that our members understand the controversial nature of this important bill.
Miscellany
Executive Order combining two departments — Governor Granholm issued Executive Order 2009-55 which combines the Departments of Information Technology and Management and Budget. The new Department will be known as the Department of Technology, Management and Budget. The new Department will become a reality on March 21, 2010 unless the Executive Order is overturned by legislative action by both the House and Senate.
New Capital Complex security system — A new automated security system has been initiated in the Capital Complex. Guests to the buildings in the Complex must provide their names and driver license numbers which will be entered into a computer website. Upon arrival, the visitor will swipe his or her driver license and receive a visitor pass. Each building will have three entry lanes where proper identification may be swiped and the pass issued. Currently two of the three lanes in each building are active. The third entry lane will be put on line soon. An alarm will sound if the system detects efforts to defeat it. Security guards are still manning security posts in the buildings. Once the system is fully operational, the security guards will be removed.
Governor’s State-of-the-State Address — Governor Granholm will deliver her State-of-the-State Address on Wednesday evening, February 3, 2010 to a joint session of the House and Senate. The address will begin at 7:00 p.m. and will be broadcast statewide.
Area legislators with perfect voting records — Three area legislators are among the 42 state representatives and senators with perfect voting records in 2009. The three are: Representatives Joan Bauer, Barb Byrum, and Rick Jones. There were716 recorded votes in the Senate and 682 in the House.
People in the News
William “Bill” Hettinger who held many important posts in state government, died at the age of 81. Mr. Hettinger served as Governor Milliken’s Chief of Staff, Deputy Secretary of State to James Hare, and Director of the Department of Administration, the forerunner of DMB.
Representative Mike Simpson, a Democrat from Jackson, died recently at the age of 47. Representative Simpson suffered from a rare blood disease and was returning from Cleveland Clinic when he suffered a heart attack.
Erma Henderson, who was the first black women to serve on the Detroit City Council died at the age of 92. Ms. Henderson served 17 years as a councilwomen, 12 years as President of the Council.
Steve Chester, the only Director of the Department of Environmental Quality under Governor Granholm has resigned to return to private law practice.
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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