By Mary Pollock
BUDGET CRISIS AND SCRAP THE CAP UPDATE
Like everyone else dependent on state government funding, Michigan SERA and State retirees are waiting with bated breath for a balanced budget agreement among our lawmakers to avoid a State government shutdown at midnight on September 30. Failure to adopt a balanced budget would create a crisis for funding pre-K through 12 education, higher education, local government, and the many contracts and grants the State has promised.
Budgets — Governor Whitmer proposed in February her $83.5 billion ($15.3 billion General Fund) budget for the fiscal year starting October 1, 2025, based on January revenue estimates. Some 41.7 percent of Whitmer’s budget recommendation comes from federal funds but since February there have been federal claw backs as well as cancellation of federal funding in many program areas. Many expect the State to make up for federal funding losses.
The State Senate passed final departmental budget bills on May 14 totaling about $84.6 billion based on early May revenue estimates and sent them over to the State House.
Typically, the House passes its budget bills at about the same time as the Senate, sends them over to the Senate, and conference committees composed of representatives of both chambers and both parties iron out the differences. But this year House Republicans introduced and approved their 800-page budget proposal, House Bill (HB) 4706, on August 26 for State departments and agencies (including $12.09 billion General Fund). Nearly all areas would face reductions except the Executive Office, Legislature, Auditor General, Military and Veterans Affairs, and Transportation. The measure passed 59-45, with one Democrat joining Republicans. Combined with earlier plans for schools, community colleges, and higher education, the total GOP proposal is $79 billion, about $5 billion less than either the Governor’s or the State Senate’s budget plans.
SERA’s COLA Proposal — In the midst of this general budget crisis, SERA has suggested to State Senate Appropriations Chair Sara Anthony (D-Lansing) that the current $300 annual cost-of-living- adjustment (COLA) cap for defined benefit State employee retirees be replaced with a yearly adjustment based on the Consumer Price Index for the Elderly, calculated annually by the Bureau of Labor Statistics. We advocated and succeeded in getting an actuarial study to project the cost of several options to improve the COLA for the 60,000 State employee defined benefit retirees. That was financed in last year’s budget and completed in January 2025.
And SERA has now identified money to pay for a new COLA formula: using the excess funding in the State employee retiree health care fund. We would oppose using that money for anything other than State employee retiree pension or benefits.
SOM Retirement Board — Last month SERA also asked the State of Michigan Retirement Board staffed by the Office of Retirement Services to support using the excess funding in the State employee retiree health care fund for improving the annual COLA. We have not yet received a response. It meets again on November 13.
Next Moves — To make this all happen we first need Senate appropriators’ agreement to the concept and inclusion in this year’s budget for State Senate approval. Then we will need State House appropriators’ agreement and full House approval. Finally, and most importantly, we need the Governor’s approval. The best scenario is that a COLA change will be included in the budget bill for Fiscal Year 2025-26 being negotiated this month. A policy bill to change the State Employees’ Retirement Act is also needed to authorize the change. That also needs to be approved by both chambers and the Governor.
Shutdown — At this writing, State government pundits are expecting that because there is a wide difference in the State Senate and State House proposed budgets and very little time to negotiate differences before October 1, there will be a State government shutdown at midnight September 30. The last shutdowns were during the Granholm administration in 2007 and 2009. In those shutdowns, the Governor designated essential services to continue while the rest of State government scaled back to a skeleton crew or temporarily ceased operations.
As the shutdown looms, road funding is a $3 billion sticking point in Michigan budget talks. Gov. Gretchen Whitmer and House Republicans are pushing for a $3 billion roads plan to be included in the State budget. She says new revenue is needed to fund this; House Republicans say the money can be found by eliminating waste, fraud, and abuse and dedicating the sales tax on gasoline to roads instead of designating it for education. Senate Democrats haven’t proposed their own infrastructure plan.
For defined benefit State retirees, we are hoping that our October 25 and future pension checks are deposited on time and that the State’s contract with Blue Cross/Blue Shield to process our retiree health care claims continues without interruption or delay. Hopefully, there will be someone answering our calls to the Office of Retirement Services or other parts of State government like the Secretary of State.
Action Needed — SERA members need to contact the Governor, your State Representative, and your State Senator at their community events, by e-mail or phone on the budget issue, pointing out that State revenue is available to fund a policy change to improve the annual COLA cap of $300 that hasn’t changed since 1987 and affects about 51,000 State employee retirees.
MOBILE ALERT SYSTEM FOR SENIORS PASSES HOUSE
From MIRS News 9-3-25: The Michigan State Police would implement a mobile alert system to more quickly activate help in finding missing seniors and vulnerable adults, under legislation that passed the House today, 103-2.
State Rep. Gina Johnsen’s (R-Lake Odessa) HB 4362 creates a Silver Alert system that would be run through the Michigan State Police. The system would allow law enforcement to send rapid alerts to mobile phones, similar to Amber Alerts, once a missing person report has been filed.
“Getting answers fast is absolutely critical in these tragic instances,” said Johnsen. “This bill ensures information gets out fast and directly to the public, where it can make the most difference.”
Under current law, police can utilize wireless emergency alerts to notify broadcasters and newspapers, but not the public directly. Johnsen’s plan utilizes modern technology and gets rid of that restriction and allows these notifications to go out more broadly, just as they do for Amber Alerts. The legislation does not require the creation of a new department, commission, or allocation of State funding.
Johnsen’s plan passed the House with broad, bipartisan support and is backed by several organizations, including the State Employees Retirees Association, the Area Agency on Aging of Western Michigan, and the Friendship Centers of Emmet County.
IDENTITY THEFT PACKAGE PASSES SENATE
From Gongwer 8-26-25: A bill package that sponsors say would codify consumers rights regarding the collection and use of personal data cleared the Senate along party lines.
Passing the Senate 19-15 were Senate Bills (SBs) 360 — 364, which would require State and private entities that have had access to the personal information of State residents to maintain security procedures for personal information security. Each of the bills passed 19-15.
Under SB 360, civil fines would be prescribed for failure to protect personal data. Entities would have to inform those who were affected by a data breach. Data breaches affecting more than 100 residents would require that the attorney general be notified. The other four bills would modify statutory references to align with the changes outlined in SB 360.
“With more and more data breaches happening here in Michigan and across the country, it’s imperative we take action to protect consumers from the very real threats caused by the misuse and exploitation of their personal information,” Sen. Rosemary Bayer, D-West Bloomfield, the lead sponsor of the package, said in a statement. “As a victim of identity theft myself, I understand all too well the headaches, harms and fear that comes with it, and I’m working to do everything possible to make sure this doesn’t happen to anyone else.”
One bill from the package, SB 359, was not brought up for a vote. The bill would establish consumers’ rights related to personal data as well as require the collectors and processors of that data, including businesses, to ask for permission before processing consumer data. Business groups opposed the bills in committee, saying the proposal could put customer loyalty programs at risk.
Similar legislation passed the Senate last year but did not see movement in the House.
SPECIAL ELECTION CALLED
Gov. Whitmer has called a special election to fill the 35th State Senate District seat, which became vacant after State Senator Kristen McDonald Rivet (D- Bay City) resigned early in 2025 following her election to the U.S. House of Representatives. The special primary will be held on February 3, 2026, with the general election on May 5, 2026. The district includes parts of Bay, Midland, and Saginaw counties.
The current State Senate is 19 Democrats and 18 Republicans. Election of a Republican to the vacant seat would give the Senate an even split. The Lt. Governor can vote to break 19-19 votes.
2026 MIDTERM ELECTION PROJECTED SPENDING
Michigan is projected to see $936 million in political ad spending for the 2026 midterm elections, second only to California, per AdImpact which reports on television, radio, and online ad spending. National spending is set to hit $10.8 billion, with U.S. Senate races, including an open Michigan U.S. Senate seat of retiring U.S. Senator Gary Peters, making up $2.8 billion and Michigan among the top five battleground states once again. Open Governor and U.S. Senate races, a competitive Legislature, and potential ballot initiatives (see last month’s “Capitol News”) are fueling the surge. Michigan is also forecasted to lead in gubernatorial ad spending at more than $152 million.
NEW LAWS
On August 26, Governor Whitmer signed HBs 4047 and 4048, and SB 70 into law. HB 4047 and HB 4048, now Public Acts 11 and 12 of 2025, make it a crime to create or share Artificial Intelligence-generated sexual images of real people. SB 70, now Public Act 10 of 2025, designates part of M-34 in Hillsdale County as the Deputy Sheriff William Butler, Jr. Memorial Highway in honor of the officer who was killed in the line of duty.
Dozens of important policy bills languish, having been passed in one chamber but not taken up in the other chamber controlled by the other party. It is the lowest productivity in legislative history.
(Editor’s Note: Mary Pollock is the Lansing SERA Chapter and SERA Coordinating Council’s Legislative Representative. She may be contacted at michigansera@comcast.net.)