Legislative Report
June 2010
With the filing deadline for the August primary having passed, phase two of a political ritual has begun. The last minute anxiety of getting petition signatures in, and withdrawing one’s name after initially filing to run, now becomes the very difficult challenge of getting necessary political support and money, especially the latter. The political scene in Lansing will be different over the next two months as incumbent politicians jockey to gain their next political jobs. They will be doing a delicate balancing act between doing the people’s business and doing what is politically necessary and expedient for them to gain their next political office. Term limited legislators will be, in some cases, trying to extend their Lansing based careers by moving from the House to the Senate and vice-versa. Other legislators and statewide office holders will be seeking higher political office. All of this will be happening while they are making major policy decisions affecting the people of the state while trying to appeal to the voters’ wishes.
The Attorney General, and Secretary of State, Senate Majority Leader and the Speaker of the House all are seeking higher political statewide offices. There are twenty-nine Senate seats where there are no incumbents running and fifty-two House seats with no incumbents running. With 510 total candidates running for the 110 house seats in the primary, there will be major battles for votes. There are a record number of 83 Libertarian candidates running for various political offices on the ballot. 15 Libertarian candidates are seeking U.S. house seats; 15 are running for state senate seats; and 29 are seeking election to the state house. With candidates representing such diverse political philosophies, the 2010 primaries should be very interesting. Already we are observing some of the political infighting which is and will be taking place with the political ads of Mr. Cox, Mr. Hoekstra, and Mr. Snyder. Stay tuned! It will get worse in the next several months.
It appears that gubernatorial candidate Lansing Mayor Virg Bernero is winning the endorsement battle with his rival candidate House Speaker Andy Dillon. Bernero has secured the endorsements of two of major unions: the AFL/CIO and the Michigan Education Association. Obviously, with the endorsements come manpower and financial commitments. Mr. Dillon appears to be suffering from the perception of many voters as his being too conservative on many issues. He lost considerable union support with the introduction of a bill to pool the health care plans of all public sector employees in the state (HB 5345). He recently introduced a substitute for the original bill which is discussed below.
In terms of legislative activity, both chambers were deeply involved in resolving the early retirement bill for school employees (SB 1227) which was introduced as part of Governor Granholm’s financial reform package. The versions of the bills as passed by each chamber differed significantly and had to go to a Conference Committee to resolve the differences. The Conference Committee composed of three House members and three Senate members struggled for several weeks before reaching agreement in mid May. One of the major stumbling blocks was the amount of incentive to encourage school employees to retire as expressed by the multiplier factor used in computing the amount of retiree pension. The Conference Committee Report was finally approved by the legislature and signed by the Governor. But the passage was not without political fallout. There was much bickering and name calling among legislators and threats of withholding endorsements by the AFL/CIO and the MEA for those who voted for the bill. A similar bill (SB 1226) which would provide early retirement incentives for State retirees is still pending action by the legislature.
The following are bills which saw legislative action during the month of May and which may be of specific interest to seniors/ retirees:
Substitute bill introduced for public employees health care benefits pooling — After no action by the Public Employee Health Care Reforms Committee on HB 5345, its sponsor, House Speaker Andy Dillon, has introduced a substitute bill to replace the original bill. The Committee now is considering the Substitute HB 5345 which is conceptually the same as the original bill but much more complex and bureaucratic. In presenting the substitute to the Committee, Speaker Dillon stated that the new bill is intended to address what critics have pointed out as being shortcomings to the original bill: The purported saving are not real, violates collective bargaining agreements, and lacks opt-out provisions. In the opinion of this writer, they have made a bad bill worse! SERA is a member of a coalition which opposes the concept of pooling public sector health care benefits. The coalition issued a press release shortly after the substitute was introduced and accepted by the Committee for consideration which states in part: “The new version preserves the worst features of House Bill 5345 and adds several new layers of reporting requirements, boards, fees and other complications. . . This bill turns a four-headed monster into an eight headed serpent. It is freakishly complex and grows state government to the largest and most expensive extent in decades at the same time the state is facing another huge hole in the state budget . . .” The House Fiscal Agency analyzes most bills under consideration by the House. The original bill was never analyzed and this one probably will not be either because its complexity defies a simple and accurate analysis.
Creation of an irrevocable trust for each of the state’s five retirement systems — HB 4073 is now Public Act 77 and creates the Public Employee Retirement Health Care Funding Act. Under Section 115 of the Internal Revenue Code, such irrevocable trusts may be created. Under the new law, the governing boards of each of the retirement systems administered by the Office of Retirement Services will administer a trust which will pay retirement health care benefits. Members of each board will be trustees and each trust will be managed and operated separately. The assets of each trust must be used exclusively for purposes related to retirement health care benefits and the associated administrative costs in providing those benefits. Assets held by each trust must be vested in accordance with the Public Employee Retirement System Investment Act and the state treasurer will be the investment fiduciary of the trusts with trust assets not being subject to state and local taxes. The question of how the trusts get funded remains unanswered. This Act merely establishes the mechanism for managing and controlling such funds. Currently the state operates on a pay-as-you go basis for employee health care costs. The state could establish the funding of the trusts through the sale of bonds, although that decision remains to be made. The establishment of the trusts does not make health care benefits a guaranteed entitlement.
Establishment of new procedure for counting absentee ballots — Currently all absentee voter ballots within a political jurisdiction are grouped and counted as votes coming from one precinct, a so-called virtual precinct, regardless of the address of the absentee voter. Under HB 6030, communities having less than 250 precincts would be required to count the absentee votes as being cast in the precinct in which the absentee voter lives and combine the absentee vote results with the appropriate precinct vote results allowing the precinct election results to reflect both on-site and absentee ballot results. Cities with over 250 precincts (Detroit) could opt-out of this requirement due to sheer volume of absentee voters. This process would save costs of printing ballots and allow for faster and less costly recounts when required. The bill has passed the House and gone to the Senate where it is awaiting assignment to a committee.
Offsetting the impact of the repeal of the federal estate tax — Effective January 1, 2010, the federal estate tax and generation skipping transfer tax were repealed for one year only. The repeal of this federal law could negatively affect some families should their loved ones pass away in 2010. For example, some heirs in lower tax brackets could end up owing capital gains taxes. Also, as a result of the temporary repeal of the estate tax, the assumptions made at the time the wills were written are no longer applicable during 2010. This could result in some surviving spouses being shut out of the wills completely. HB 6197 would require that any tax terms or formulas be read as if the estate tax law of 2009 were still in effect during calendar year 2010. The bill would allow the expectations of those who made wills while the estate tax law was in effect to have their estates divided as they understood it would be at the time the will was made. The bill has been reported out of the House Judiciary Committee and is on the House floor for consideration.
Reduce pay of all public employees in the state 5% — Senate Concurrent Resolution U is a measure which would put before the voters a constitutional amendment to require that all public employees’ salaries be reduced 5% for a three year period beginning October 1, 2010 in order to “protect the general welfare of the public by ensuring continuity of governmental operations. &” The reduction would be from the base rate in effect on January 1, 2010. The Resolution covers all employees including elected and appointed officials. Disputes regarding this proposed constitutional amendment could be resolved only by a lawsuit brought in the Michigan Court of Appeals. This Resolution would have to receive a two-thirds vote in both houses of the legislature before June 3 in order to get on the August primary ballot as a proposed constitutional amendment. The Resolution has been reported out of the Senate Judiciary Committee and is on the Senate floor where it will require 26 votes to pass before going to the House for consideration.
Miscellany
Secretary of State ruling on Campaign Finance — The Department of State has issued a ruling regarding the use of corporate money for “express advocacy” purposes. Express advocacy refers to positions taken in support of or in opposition to a candidate or issue. The ruling prohibits a corporation from giving money to another entity to promote or oppose an issue or candidate. The ruling was requested by the Michigan Chamber of Commerce. Corporations may expend money for express advocacy purposes, but must spend it directly in its own name. Since the term “express advocacy” is not defined in the law it became necessary for the Department of State to give guidance. A key sentence in the ruling states, “A corporation’s political speech must be funded exclusively by that corporation.” This clearly eliminates the pooling or hiding of corporate funds during campaigns.
Refund ordered by Consumers Energy — The Michigan Public Service Commission has ordered Consumers Energy to refund some $23.1 million to its customers. In November, 2009, Consumers Energy requested an $89.0 million rate increase. The request was tentatively approved. The Public Service Commission now indicates that only $65.9 million should have been approved. The unwarranted and unnecessary amount must be refunded. Consumers Energy must submit a refund plan to the Commission by August 19.
Supreme Court Justices involved in dispute— Three Justices Maura Corrigan, Steven Markman and Robert Young, Jr. have asked the Judicial Tenure Commission to investigate and file charges against fellow justice Elizabeth Weaver for disclosing the content of discussions that took place in a judicial conference among the justices of the Court. The three Justices allege such action violates a Court Rule. Their complaint further alleges that Justice Weaver tried to have the rule invalidated. Justice Weaver was once part of the conservative group of the Michigan Supreme Court with the three now making the charges against her. In recent years, there has been a split among Justice Weaver and the other three conservative justices.
Estimating Conference redefines General Fund deficit — The heads of the two fiscal agencies and the state treasurer recently met for an estimating conference where they officially analyze from their perspectives the state’s fiscal picture. They then reached agreement on the amount of state funding available for the remainder of the fiscal year. The group estimates the General Fund will have $243.5 million less revenue to spend than was established at the January Estimating Conference. They place the overall General Fund deficit at $340 million. Measures will now have to be implemented to reduce that deficit estimate.
Detroit gaming revenues 5th largest in nation — The American Gaming Association reports that revenue from the three Detroit casinos in 2009 was some $1.339 billion, placing Detroit at the number five spot in gaming markets in the nation. Those cities exceeding Detroit in terms of gaming revenue are (1) Las Vegas, (2) Atlantic City, (3) Chicago area and (4) Connecticut.
Appointments of individuals to public university boards — In last months Legislative Report, I reported that the Republican controlled Senate had told the Governor that they would reject all of her appointments to university boards where the appointment did not take place until January 1, 2011. Apparently they had second thoughts and did, indeed, approve several individuals to several university boards.
Please note error in last month’s report — Last month I reported on the Democratic endorsement convention where candidates for attorney general and secretary of state were selected by the Party’s hierarchy. I indicated that the individuals so chosen would still have to face election in the August primary. The candidates for attorney general and secretary of state are chosen at party conventions and not in a primary election. The Democratic Party convention must officially select the candidates for the two offices even though they were tapped as being the favorites for the positions earlier. I thank my friend Bob McKerr for politely pointing my error out to me.
People in the News
Representative Alma Wheeler-Smith— Ms. Smith was among the first Democratic candidates to announce their candidacy for Governor. The day before the filing deadline, she announced that she would not be a candidate because she believed her running would split the progressive vote and allow a conservative Democratic candidate to win. Her statement appeared to give the nod to Virg Bernero.
Glenn Steil — A former Republican state senator from Grand Rapids and an outspoken supporter of term limits, died recently at age 68.
Mary Waters — A former Democratic state representative from Detroit and most recently involved in two crimes — one as a defendant and another as a complainant — announced her candidacy for the 1st District state senate seat. Ms. Water pleaded guilty to filing a false income tax return after being accused of being involved in a bribery conspiracy. She also accused her co-defendant, Sam Riddle, of pulling a shotgun on her in her home. Riddle was found guilty of felonious assault against Ms. Waters. Ms. Waters sought to have the charges dropped against Riddle.
Senator Roger Kuhn — A Republican from Saginaw was said to have been involved in a fracas with his Senate aide. It was reported that he snatched his aide’s cell phone and threw it on the ground and stomped it on a public street after a late night session. After discussions with Senate leadership, Mr. Kuhn apologized to his aide and his fellow senators. Mr. Kuhn was accused of bumping Senator Erma Clark-Coleman on an elevator about a year ago. That matter was investigated, but no charges were brought.
Kwame Kilpatrick — Former Detroit Mayor who resigned in disgrace and served 99 days in jail as part of a plea agreement for lying under oath was recently sentenced from 1-1/2 to five years in prison for probation violations by a Wayne County Circuit Judge. Mr. Kilpatrick earlier was ordered to pay $1 million in restitution to the City of Detroit. His probation violation stems from his not fully disclosing all of his and his wife’s assets and not being candid with the court regarding his ability to pay the $1 million.
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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