Legislative Report
August 2010
Addressing the problems of state government was not of immediate concern to those persons whose responsibility it is to do so. Instead, legislators were either trying to assure their return to Lansing by being reelected or trying to influence who would take their place if they were term limited or seeking another legislative position in a different chamber. Never mind the budget for fiscal year 2011 or balancing the current year budget. There would be time for those things later. First things first! Let’s promise our constituents what we will do for them in the future. Let’s not talk about what we have failed to do during the period we have been in Lansing — like eliminate the structural deficit the state has had for at least a decade.
Turning to the structural deficit, it now appears that the 2011 budget as proposed by the Governor will be approaching a shortfall of some $600 million. Much of this is attributable to the federal government’s failure to appropriate funding for the Federal Medicaid Assistance Percentages extension. The state was planning on $560 million from this source, but will get considerably less, if anything. Any deficit for the Medicaid program must be made up from the state’s General Fund as opposed to reducing the Medicaid program according to federal guidelines. The Governor has announced she will propose cuts to the 2011 budget, but as yet has not put any concrete proposal on the table. In all likelihood, she also will propose some strategic revenue increases which will not sit well with the Republican controlled Senate. There surely will be political controversy in whatever is proposed, especially inasmuch as this is an election year. Oh, did I mention the current year budget also is out of balance? Stay tuned!
Perhaps a bit more attention will be given to the issues at hand now that the primary election is over. The surviving candidates now have only one competitor (in most cases). It is a battle over political philosophies: liberals vs. conservatives, spenders vs. cutters, small government vs. big government. It is within this environment that the current budget issues will be settled and the 2011 budget will be finalized. It won’t be an easy task. Voters will be watching as Mr. Snyder and Mr. Bernero weigh in on how they would resolve the crisis. Would be state representatives and senators will be listening to their constituents while lame duck legislators may make some bold moves. For most of us, November 2nd can’t get here fast enough.
The following is a status report on bills of possible interest to retirees/seniors:
Pooling of public employees health care programs — HB5345 calls for pooling the plan design, selection and administration for all public employees’ health care benefits in the state into one entity under the jurisdiction of the state. This concept was the brainchild of House Speaker and defeated gubernatorial candidate Andy Dillion. The bill was introduced with much flair and estimated to save some $900 million, a figure which has never been substantiated. Many hearings have been held on this bill and a substitute bill has been introduced, which in the estimation of many people, is worst than the original bill. The unions are vehemently opposed to this bill which does not appear to have enough votes to get out of committee. Sponsor Dillion recently pledged to continue to push for its passage. SERA and other members of a coalition opposed to HB 5345 will watch and seek to prevent a lame duck legislature from trying to slip the bill through before the end of the year.
Early retirement for state employees — SB 1226 is a bill the administration is planning on to help balance the 2011 budget by encouraging state employees to take early retirement. SB 1227 which has passed and signed into law by the Governor allowed some 17,000 school employees to take early retirement. The passage of SB 1227 angered the Michigan Education Association because, among other aspects, it provides for those employees who did not take early retirement to pay 3% of their wages into a health care fund. The negativity associated with the school employees early retirement law is causing state employee unions to push for changes to SB 1226. The legislature does not want two bills intended to accomplish the same purpose to be vastly different, so they do not support major variances in content between the two bills. They face a major dilemma in trying to appease the state employee unions and not further anger the Michigan Education Association. Thus far there has been no movement on this bill which has passed the Senate and has been before the House for some time now. The failure to pass this bill further complicates balancing the 2011 budget.
Miscellany
Reporting of employer health care cost on employees’ W-2 income tax forms: There have been widespread stories circulating about employers having to report the value of the health care benefits they provide on the employee’s W-2 form as required by the recently passed federal health care legislation. The stories go on to state that the employee must pay tax on the health care cost as reported by the employer. While the employers’ cost must be reported on each W-2, it is for information purposes only and it will not be taxed. The amount reported is not considered taxable income. Such is clearly stated in the law.
Provision for state to opt-out of federal health care program fails to make ballot: A group known as Michigan Citizens for Health Care Freedom sought to collect enough signatures to allow Michigan voters to choose to opt-out of the federal health care legislation. The group needed some 380,000 signatures and only collected between 145,000 and 180,000 signatures. Those opposed to giving residents the ability to opt-out claimed victory by saying the majority of people simply did not agree to such a provision. Those pushing to collect the signatures claimed they fell short in terms of both time and money. Attorney General Cox is part of a group challenging the federal legislation in court.
Group urges keeping state library, historical center and genealogy collection in tact: At the time Governor Granholm issued an executive order breaking up the state library and its genealogy collection, she appointed a group known as the Michigan Center for Innovation and Reinvention to study what should be done with the library and the genealogy collection and report back to her. The group recently released its report which recommends keeping the library/museum complex as it currently exists and seeking a dedicated revenue stream to support its operation. The report suggested admission fees, etc along with possible support from private philanthropic organizations. This report should please many people who strongly opposed moving the genealogy collection to Michigan State University.
Physicians Health Plan and Priority Health to be awarded high risk health care contracts: There is a recommendation to award contracts to Physicians Health Plan (PHP) of Lansing and Priority Health Plan of Grand Rapids in the amounts of $37.4 and $103.6, respectively, to provide health care services to high risk individuals with pre-existing conditions. PHP will serve residents in 22 counties including several in mid Michigan and all of the Upper Peninsula counties. Priority Health Care will provide services to residents in the other 61 counties. These contracts serve as an interim measure until the federal health care law is fully implemented. The funding for the contracts will be paid by the federal government. The Michigan legislature will have to pass a supplemental appropriation before the State Administrative Board can consider approval of the low bid contracts.
Clarification: SERA member Jim Sheely called to my attention that use of a credit card at a Secretary of State office carries with it a 2% service fee charge. This fact was not included in my report last month regarding the SOS accepting credit cards on site. Visa prohibits such a service fee to be charged for transactions, thus SOS does not accept Visa.
People in the News
Andrew Levin has been named by Governor Granholm to be the Director of the Department of Energy, Labor and Economic Development replacing Skip Pruss. Levin was formerly the deputy director for workforce transformation.
Dan Kirchbaum has been named Director of the Department of Civil Rights by the Civil Rights Commission. He had been the interim director after replacing Kelvin Scott who died several months ago after a brief illness.
Scott Bowen, State Lottery Commissioner, has been named U.S. Attorney for the Western District of Michigan by President Obama. Before taking office, he must be confirmed by the U.S. Senate. Bowen also has served as Director of the Office of the State Employer.
Douglas Johnson was appointed as a retiree member of the State Employees Retirement Board and Douglas Drake was reappointed as a retiree member to the Retirement Board by Governor Granholm.
State Senator Gretchen Whitmer is one of fifty legislators selected to participate in the 2010 Program for Emerging Political Leaders sponsored by the State Legislative leaders Foundation and the Darden School of Business at the University of Virginia. 180 legislators throughout the United States were nominated for this program by their legislative leadership.
Jay Noren, President of Wayne State University, has resigned due to the illness of his wife. Governor Granholm is rumored to be a possible candidate to replace him.
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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