Legislative Report
July 2010
The two primary issues which dominated the legislative scene in Lansing during the month of June were budgets (balancing the current year and developing the 2011 appropriations) and the controversial Detroit River International Crossing (D.R.I.C.) which is a proposed bridge between Detroit and Canada. Of course, the backdrop to all of this was the campaigning for political office which involves many of the current legislators and other state officials. This year being an election year, politicians must be more careful than normal on the positions they take on many issues.
Obviously, the legislature failed in its goal to pass the 2011 appropriation bills by June 30, which came as no surprise to many observers. To their credit, however, they did pass the K-12 education budget. The passage of this budget was critical inasmuch as the public school’s fiscal year begins July 1 and knowing how much is available for school operations is critical to administrators. It is doubtful that the remainder of the budgets will be complete before the August primary. The major obstacle to achieving passage is one which has plagued state government for years: the state’s structural deficit. Complicating the budget resolutions is the loss of anticipated assistance from the federal government. The failure of the U.S. Senate to extend the unemployment benefits for the long time unemployed and extend the Federal Medicaid Assistance Program has exacerbated Michigan’s fiscal woes.
It appears that the current year deficit will grow to some $500 million without federal assistance. The Democrats and the Republicans cannot agree on how to resolve the problem. There have been suggestions for several proposed solutions, but no agreement primarily because of political philosophy of the two sides. For example, selling some of the future tobacco settlement money due the state, a process called securitization, is a non starter for the Republicans as is use of a surplus in the School Aid Fund to cover the General Fund deficit. There are even some Democrats who oppose use of the School Aid Fund for this purpose. This annual scenario has been repeated and will continue to be repeated until politicians have the political will (and guts) to resolve the structural deficit through a combination of cuts and increases. The revenue increases must be sustainable if Michigan is ever going to have final resolution to its unstable budget structural problems.
The D.R.I.C. proposal (HB 4961) is an intriguing one. It is to have a new bridge to Canada constructed downriver from Detroit. Canada has offered some $550 million to pay the state’s cost of the bridge. There are unanswered questions regarding the need for the bridge, whether it would boost the international trade as anticipated, whether fees would cover the almost $1 billion dollar cost of the bridge, and whether or not there should be a second span adjacent to the current privately owned Ambassador Bridge. The current owner of the Ambassador Bridge is an extremely wealthy man who has much political influence through his campaign contributions. Many politicians do not believe that the D.R.I.C public-private partnership with international overtones is the best way to fund the bridge. Interestingly enough, the issue crosses party lines. It is one that will be interesting to see its resolution.
While there were public hearings on many bills in June, several bills which saw legislative action are reported here as being of possible interest to senior/retirees:
Early retirement for state employees — SB 1226 which is a bill designed to help balance the 2011 budget by encouraging state employees to take early retirement, has not moved. Late in the month, as part of negotiations to settle the current year deficit, the House leadership agreed to push for passage of SB 1226. One of the problems in moving the bill is that legislators are keenly aware of the controversy which arose from the passage of a similar bill (SB 1227) applicable to School employees. That bill is the subject of several legal battles which are explained in the Miscellany section of this report. House Speaker Andy Dillon at one time questioned whether he had the votes to get SB 1226 passed. One of the major controversies is the fact that those employees who do not retire will begin paying 3% of their wages into a health care fund. It all boils down to the fact that there is so much negative reaction to the passage of the school employees early retirement bill and legislators are reluctant to open the same can of worms by passing the early retirement bill for State employees. Correcting the issue in SB 1226 which caused the controversy in SB 1227 would only exacerbate the problem for legislators. They have created a very interesting dilemma.
Financial Exploitation or abuse of a vulnerable adults — Two bills have been introduced to prevent exploitation or abuse of an incapacitated or otherwise vulnerable adult. HB 5187 defines financial exploitation. Financial exploitation would mean the action of a person of trust and confidence, who by intimidation or deception knowingly takes control, title, use, or management of a vulnerable adult’s assets or property with the intent to permanently deprive him or her of the assets or property. Also, the bill requires financial institutions to provide training to its employees who perform financial services on how to identify financial exploitation. Employees would have to report suspected financial exploitation and would be provided immunity from civil liability that might otherwise be incurred. The report must be made to the county department of social services. A person making a report of suspected exploitation is presumed to have acted in good faith. HB 5193 adds all the definition of terms found in HB 5187 to the Social Welfare Act. Both bills have passed the House and gone to the Senate for consideration.
Widow or widower transferring a reduced retirement allowance to new spouse — HB 6290 is a recently introduced bill that would allow the transfer of reduced retirement benefits, if that option was originally selected by the member and the spouse dies and the member subsequently remarries, to the new spouse after the remarriage has lasted three years. This bill which amends the Retirement Act was introduced by Representative Rick Jones and has been assigned to the Committee on Labor .
Exemption of cottage food operation from licensure — HBs 5280 and 5837 are bills which exempt so called cottage food operations from applicable licensure and evaluation requirements of the law. In order to be exempt, the products would have to be prepackaged and sold in person, indicate that they were homemade and list the ingredients. Gross sales for a specific cottage food product operation could not exceed $ 15,000 annually. The bills contain the definition of “cottage food operation’, “cottage food product”, and “domestic residence.” HB 5280 and HB 5837 have passed both houses and are on their way to the Governor for signature. HB 5843 applies the content of the other two bills specifically to maple syrup and honey. This bill has been reported out of the Agricultural Committee and is awaiting action on the House floor.
Proposed Constitutional prohibition against well drilling on the Great Lakes — Senate Joint Resolution Z and House Joint Resolution GGG both would amend the Constitution to prohibit well drilling on the Great Lakes and its connected bays and harbors and the St. Mary’s River, the Detroit River, the St. Clair River and Lake St. Clair for the exploration or production of natural gas. Each would also prohibit drilling beneath the bottomlands of the Great Lakes. Currently, there is a statutory prohibition covering this which could be overturned by a new statute. If either of these two joint resolutions is passed, it would cause to be placed on the November ballot a proposed Constitutional amendment allowing the voters to determine whether drilling should take place. In order to pass and get on the ballot, a two-thirds vote on the resolution by both chambers is required. Both chambers have reported the bills out of their respective committees dealing with Great Lakes, environmental and natural resource issues.
Create a retirement center liquor license category — HB 6007 would amend the state’s liquor laws to allow for the issuance of a license to certain retirement centers to sell beer, wine and spirits for the consumption on the premises and would establish a $600 license fee for this category of license. The number of non-public continuing care retirement centers licenses that could be issued by the Liquor Control Commission is limited to 20. The residents and their guests would be allowed to purchase the beer, wine and liquor products. In order to be eligible for such a license, the facility would have to provide residential housing to those primarily over 62 and be registered as an adult foster care facility, nursing home, retirement home, home for the aged or a facility that undertakes to provide care to an individual for more that one year. The bill has passed the House and gone to the Senate for its consideration.
Miscellany
Establishment of a coalition against a constitutional convention (con-con) — A coalition of 21 diverse organizations has been formed to oppose a con-con. Every sixteen years the question of whether there should be a con-con is automatically placed on the ballot. It will be on the ballot in November. The group, know as Citizens Protecting Michigan’s Constitution is made up of organizations such as the Michigan Chamber of Commerce, the Michigan Catholic Conference, the Michigan Medical Society, etc. The basis for their opposition is that a con-con will handcuff the next governor and the legislature for a two year period and Michigan can ill afford to have that happen. It is interesting to see groups which have differing political philosophies unite around this issue.
Seventeen thousand school employees apply for early retirement — While the Governor was hoping some 28,000 school employees would opt to retire early under the plan put forth by the administration, some 17,000 did so. It is anticipated that these 17,000 individuals will save the state some $98 million. The savings did not come without a price. Three lawsuits have been filed by union organizations trying to have the provision in the act which requires those remaining employees to pay 3% of their wages into a health care fund ruled invalid. The basis of the lawsuit is that the employees are being required to pay part of their wages into a fund and may never see the benefit because health care is expressly not guaranteed. Also, it is alleged that the state will use the 3% payments the first year to pay current costs of health care. In the lawsuit filed by the Michigan Education Association and the American Federation of Teachers Michigan in Ingham County Circuit Court, Judge James Giddings ordered the school districts to hold the 3% payments in escrow until there is a definitive decision in the case by the courts. It was believed that if the state received the funds, the likelihood of their being returned should the courts rule against the state was slim. In a separate lawsuit filed in Wayne county Circuit Court by the American Federation of State and Municipal Employees, the court has not issued an opinion on the issues as of this writing.
Secretary of State branch offices now accept some credit cards —The Secretary of State announced that all of its branch offices are now accepting MasterCard and Discover Card for on-site transactions. Visa Card is not yet being accepted on-site due to its corporate policies. All three cards may be used for on-line transactions as has been the past practice. Previously only Secretary of State so called Super Stores accepted credit cards.
Lawsuit filed challenging the dollar limits on campaign contributions — Greg McNeilly, a Republican operative, has filed a lawsuit in Grand Rapids Federal Court alleging violation of his free speech rights because campaign contributions by an individual constitute a form of free speech and inflation has eroded their value. Campaign contribution laws were initiated several decades ago and the amount of allowable individual contributions was last revised in 1989. Currently, a $500 individual contribution limit for House candidates has been eroded by inflation since 1989 to the point that its purchasing power is worth $131.50, Likewise, the maximum $1000 contribution by an individual for Senate candidates has been eroded by inflation to the point that is will purchase only $281 in 1989 dollars. Inasmuch as political advertising is a major factor in political campaigns and the costs have risen sharply, the free speech voices of contributors is largely silenced. Mr. McNeilly is seeking an injunction to prevent the enforcement of the campaign finance law.
People in the News
Craig DeRoche, a former Speaker of the House who served in the legislature between 2003 and 2008, was placed on probation in early June for impaired driving and required to attend alcohol counseling and pay a hefty fine. In late June, he was arrested at his home for a misdemeanor gun incident and tested and found to be intoxicated.
Kwame Kilpatrick, former Mayer of Detroit, who is serving a 14 month to 5 year sentence in a Michigan prison for probation violation, was indicted on 19 counts of mail fraud and income tax evasion by the Federal government. He is to be arraigned on the new federal charges in mid-July.
Supreme Court Justice Robert Young has filed his affidavit of candidacy for reelection to the Michigan Supreme Court. He probably also will be nominated at the Republican Party Convention.
Supreme Court Justice Elizabeth Weaver has filed her affidavit of candidacy for reelection to the Michigan Supreme Court. She has indicated that she will run as a non-party nominated candidate and not seek to get the nomination of the Republican Party at their convention. Previously, she has been nominated at the Republican Party Convention, but recently she has broken ranks with her fellow justices who were nominated at the Republican Party Convention.
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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