Legislative Report
February 2010
The atmosphere in the Capital City is filled with excitement, confusion, fireworks, dissention, uncertainty, competitiveness, and the list goes on. After all, 2010 is an election year which brings out the best and worst in politicians. It is interesting for political junkies to stand back and watch politicians decide what the next office they will seek will be. Term limited House and Senate members are deciding what will be their next political moves. Will they switch and seek election in the other chamber or will they seek a higher state office or continue their political careers at the local government level? Internal infighting has already started for legislative leadership positions which will be open in both the House and Senate because of term limits.
The political sands are continually shifting. Lt. Governor John Cherry was a certainty to be a candidate for Governor three months ago. However, he recently announced he will not be a candidate for governor due to his inability to raise the necessary funds to mount a campaign. In early December, State Senator Hansen Clarke (Democrat, Detroit) announced that he would be a candidate for Governor. As the month came to an end, he had abandoned that quest in favor of perhaps running for the U.S. Congress against Congresswoman Carolyn Kilpatrick. State Senator Gretchen Whitmer (Democrat, East Lansing) was considered a leading contender for attorney general until she suddenly announced she would withdraw her name from the race due to family considerations. As politicians drop out, others are waiting to quickly fill the void created.
The gubernatorial race, especially on the Democratic side, has been very interesting. With Mr. Cherry’s leaving the race, the field is wide open for someone to step in. Representative John Freeman (Democrat, Flint) who had long been a candidate recently dropped out. The only announced candidate currently in the race is Representative Alma Wheeler Smith (Democrat, Ann Arbor). But she has the least name recognition and the least money of any of the other individuals considering running for governor. Waiting in the wings and flirting with a run for Governor are Representative Andy Dillon and Lansing Mayor Virg Bernero. Both have formed exploratory committees, but have not formally announced their candidacies. Two new names have emerged as possible Democratic candidates for governor: Denise Ilitch, a member of the University of Michigan Board of Regents and daughter of Detroit pizza chain and sports teams’ owner, has expressed some interest in running. Likewise, Bob Bowman, who served as state Treasurer under Governor James Blanchard, has indicated he may be interested in seeking the office. Bowman who does not live in Michigan but has a summer home in Harbor Springs is head of MLB.com. (Major League Baseball). Both he and Ms. Ilitch are independently wealthy and could personally help finance their campaigns.
There is a bit more stability on the Republican side in terms of candidates for major state offices. Attorney General Mike Cox is a candidate for Governor along with Oakland County Sheriff Mike Bouchard. Announced candidates for Attorney General are Senate Majority Leader Mike Bishop and former U.S. Congressman Bill Schuette. Less well known candidates are running for Secretary of State from both parties.
Another indication that 2010 is an election year is the posturing of the political parties’ leadership on major issues facing the state. The Republican Senate Caucus has come out with a plan to reform state government and make it fiscally sound. Senate Majority Leader Mike Bishop has announced the Senate Republican Caucus plan. Those aspects that apply to state employees are rather severe. The pertinent parts of Mr. Bishop’s plan calls for all public employees to take a 5% pay reduction, pay 20% of the cost of health care premiums, and the elimination of health care benefits for legislators who are not vested as of January 1, 2010. These benefits currently allow for lifetime benefits after six years of service for the legislator and his/her family when the legislator reaches age 55. Under Mr. Bishop’s plan, these benefits would still be applicable to those legislators who are vested as of January 1, 2010. Bills to completely eliminate the health care coverage for legislators, regardless of vesting status, remain in committee. Presently some 340 legislators and former legislators are receiving health care coverage.
The Governor announced her cost reduction plan as it pertains to state employees to overcome an anticipated $1.6 billion deficit for 2011. It, too, is a rather severe proposal: Effective October 1, 2010, a 3 percent employee contribution toward retirement costs will be reinstated; earned defined benefit service credit is capped at 30 years with service credit beyond 30 years being covered by define contributions; employees retiring after September 30, 2010 will no longer receive state paid dental and vision benefits but may purchase them through the state’s plan; employees who retire between July 1 and October 1, 2010 will be eligible for a 1.6% multiplier in computing their retirement benefit (this is .1% higher than the 1.5% multiplier). Finally, employees 60 years of age or older will have a phased retirement option whereby they will be able to receive their defined benefit pension benefit while working one-half time in a previously fulltime job. This option will be available to employees at management’s discretion. The above is part of a four-part reform plan for state government that can be found at the website www.michigan.gov/gov.
There were only a few bills which saw legislative action in January that warrant comment here. The following may be of interest to seniors/retirees:
Health care pooling plan for all public sector employees/retirees — HB 5345 remains in committee. There were no hearings held during the month of January. On another front, a University of Michigan graduate student prepared a report identifying the savings from pooling health care programs as $182 to $355 million. More seasoned economists question the assumptions used in the study by the graduate student in preparation for a class debate. There is a general consensus that the original claim of $900 million in savings is not valid. SERA will continue to closely monitor activity regarding this important bill. A related bill which would require local units of government to provide current health care cost data to the Department of Management and Budget, HB 5671, remains on the House floor amid a controversy over whether the costs of local units collecting and supplying the data is a mandate requiring reimbursement under the Headlee Amendment. Compilation of the required data at the local level is not an easy task.
Prohibition against texting while driving — This is an issue which is being debated nationwide. HBs 4370 and 4394 are bills which address this issue in Michigan. HB 4394 would amend the vehicle code to prohibit text messaging while driving. It would prohibit using a hand held device or a lap held device to send written communications while driving on a highway or street. Violation of this proposed law would not be a primary offense, meaning that a person could only be charged with this offense when stopped in connection with some other driving infraction. This aspect of the bill has been a point of contention among legislators, some of whom believe it shoud be a primary offense. HB 4370 would amend the vehicle code to specify that no points would be added to a driver’s record in connection with this offense. Both bills have passed the House and gone to the Senate Committee on Transportation for consideration.
Constitutional amendment establishing a two year budget cycle — Representative Andy Dillon has introduced Joint House Resolution SS which would establish a two year budget period in Michigan. An approved budget would be in effect for a two year period. In order to get this issue before the voters, it will require passage of the Joint Resolution by a two-thirds majority vote by members of both the House and the Senate.
Miscellany
The Legislative Commission on Constitutional Mandates has issued its report that is critical of the state for ignoring the requirements of the Headlee Amendment to fund the costs to local units of government for state imposed mandates. The report identifies the largest unfunded mandate as the $1.5 billion cost to school districts to fund the Public School Employees Retirement System. This cost was at one time shared by the state and the individual school districts. Now it is fully paid by the school districts. The Legislative Commission makes the following recommendations to resolve this problem: 1) Replacing Headlee; 2) Use a “fiscal note” system to identify costs before a bill becomes effective and provide the dollars to implement the change required in a bill; 3) Use a special master within the Court of Appeals to hear challenges to the Headlee Amendment in a timely fashion; and 4) Pass a new law requiring the state to prove that a rule change or bill would not impose additional costs to the local unit.
Furlough Day imposed on unions with whom concessions could not be reached. Two labor unions, the Michigan State Employees Association (MSEA) and the United Automobile Workers (UAW), Local 6000, were unable to reach agreement with the Office of the State Employer during concession negotiations. As a result, the state is exercising it contractual right to impose furlough day to achieve the amount of money the state was anticipating gaining through concessions. The apparent reason the negotiations broke down was that the state wanted a two-tier system for health care for union employees. Newly hired union employees would have a different health care benefits structure than current active employees. The unions did not agree that there should be two different health care programs for their membership. Thus, negotiations broke down. Local 600 members will have 10 furlough days, the actual days to be determined by the agencies. MSEA will have 5 furlough days. Two unions did agree to the two-tier structure. They are State Employees International Union and the Michigan Corrections Organization. As a result of their reaching concessions with the state, their membership will not experience furlough days.
Special election set to fill 65th House District seat vacated when Representative Mike Simpson died recently. The law allows the Governor to set the date. As a cost saving measure, she set the date to fill the vacancy to correspond to the August primary and the November general election, thus avoiding the costs of a special election. The date for the candidates to file to run is May 11. Some individuals believe that the seat should not be held vacant that long. The Governor could have chosen a May primary with an August election.
People in the News
B. Dale Ball, the longest serving Agriculture Department Director in history, recently died at the age of 94. Mr. Ball served as Agriculture Director from 1966 to 1980.
Becky Humphries, currently Director of the Department of Natural Resources, has been named by Governor Granholm as Director of the new Department of Natural Resources and Environment.
Don Koivisto, Currently Director of the Department of Agriculture, has been named by Governor Granholm as Director of the new Department of Agriculture which for the first time makes the Governor responsible for appointing the Director as opposed to the Agricultural Commission.
Representative Doug Bennett, a Democrat from Muskegon, has returned to Lansing after being gone since suffering a brain hemorrhage in late summer.
Peter Munoz, State Police Director, has been nominated by President Obama to be the U. S. Marshal for the Western District of Michigan.
Faylene and Larry Owen, one of the most powerful political couples in Michigan, have filed for Chapter 7 Bankruptcy. She is a member of the Michigan State University Board of Trustees and he is twice a former gubernatorial candidate. Some are calling for Mrs. Owen to resign from the MSU Board as the result of the bankruptcy.
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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