UNDER THE DOME
Capitol Update for November 30, 2009-January 28, 2010
Cynthia A. Paul
Mark Your Calendars -SEIU Local 517M's Annual Lobby Day- Is scheduled for May 6th- The issues for this lobby day for Local 517 are the state's budget and deficit, outsourcing and health care reform.
SEIU Local One Contract Campaign Kick-Off Rally, March 10th-At SEIU Local 1 at 1274 Library Street, Detroit, Michigan, starting at 12 noon. All are welcome and your presence and suppport are greatly appreciated. Any questions please call Bruce Feaster at (313) 742-0184, ext. 34.
Pregnancy Discrimination-Governor Granholm has signed a bill giving women protection against discrimination based on pregnancy, childbirth or a related medical condition. The legislation (HB 4327, PA 190) amends the Elliot-Larsen Civil Rights Act.
House Passes Insurance Reform Package- The legislative package (HB 4424, HB 5627, HB 5628, HB 5629, HB 5630, HB 5631, HB 5632, HB 5633, HB 5634 and HB 5635). Provides as follows: Bans credit scoring and a person’s occupation and education from being a factor in an insurance premiums; Allows the commissioner to deny excessive rate increases, approve any hikes before they take effect and order refunds to consumers; Bans insurers from selling consumer personal data; Prohibits rate increases on drivers who have a no-fault accident; Creates a lower cost insurance policy for low-income residents and allows drivers not at fault for an accident to fully recover their costs; and Removes the cap on damages motorists involved in an accident can seek. Five of the ten bills pass the House only bill in the package had bipartisan support was a measure prohibiting the insurance commissioner from taking an industry job two years after leaving public office (HB 5632 passed 100-4). The rest of the bills garnered nearly party-line votes (HB 5631, 62-42; HB 5633, 61-43; HB 5634, 57-47 and HB 5635, 60-44).
Race to the Top Legislation Passes House, Senate and Signed by the Governor- The bills (HB 4787, PA 204; HB 4788, PA 201; HB 5596, PA 202; SB 926, PA 203; SB 981, PA 205) . The bills establish "cyber schools" and allow a personal curriculum to be created for each student based on the student's individual needs and abilities. This legislation allows for waiver of the math requirement after 1.5 credits in math have been achieved. Also, it develops a program to redesign failing school districts - including the voiding of contracts, including collective bargaining. In addition, the dropout age will be raised to 18 years of age, teacher evaluation standards are established and more. I will talk about each of the bills in the package in more detail in the future.
School Pro-Rata Cuts Delayed- With $150 million in unexpected revenues and savings, Governor Granholm has delayed the implementation of a $127-per-pupil pro-ration cut that was to have taken effect with the December 21 school payment. All schools still face a $165-per-pupil cut as part of the 2009-10 budget, and schools in the so-called 20j districts still will see the loss of those revenues, she said. As the closed the books on 2008-09, which ended on September 30, it found two factors that meant the fund had at least $150 million more than anticipated. Of that, $100 million comes in unanticipated non-homestead property tax revenues. The other major factor the state discovered was an unexpectedly large lapse of at least $50 million in the School Aid Fund. The largest share of that was in special education payments.
House Passes Prisoner I.D Bills- A package of bills was passed out of House Judiciary Committee that focus on making it easier for prisoners to obtain identification or allow prisoners to use prison identification to get further documentation once they leave prison. HB 5176, HB 5177, HB 5178, HB 5179 and HB 5180. The chamber found more agreement on a series of bipartisan bills that help prisoners obtain driver’s licenses and state identification cards once they are paroled (HB 5176, HB 5177, HB 5178 and HB 5179). Another bill (HB 5180) establishing a debit card parolees can use to access money leftover in their corrections account drew opposition from Republicans and passed on a 72-32 vote. Additionally, the legislation, approved unanimously, codifies a memorandum of understanding between the departments of Corrections and State in helping prisoners obtain identification.
Dillon Healthcare Pooling Plan-Subgroups- The chair of the House Public Employee Healthcare Reform Committee has assigned members to workgroups to look more in-depth at Speaker Andy Dillon’s public pooling plan (HB 5345), with reports due by December 31. All members are welcome to join the workgroups, but the following members are leaders of specific areas within the bill:
• Administrative cost efficiencies: Rep. Tim Melton, Rep. Bert Johnson and Rep. James Bolger.
• Prescription drug purchasing: Rep. Michael Lahti and Rep. Bill Rogers.
• Plan elements and opt-out: Rep. Kate Segal , Rep. Woodrow Stanley and Rep. Matt Lori.
• Board composition/appointment: Rep. Daniel Scripps and Rep. Phil Pavlov.
• Retiree plans: Rep. Harold Haugh and Rep. Bob Genetski II.
Public Employee Health Benefit Disclosure- HB 5671, sponsored by Rep. Pavlov, requires all layers of government to report to the state on what health care plans are offered to employees, what the costs are, how much employees contribute to the plan and how many employees are enrolled, this was passed out of the Public Employee Health Care Reform Committee.
House Transportation Passed Out Infastructure Investment Bill- This bill allows private investors to fund all or part of a public infrastructure improvement projects via a public/private structure that offers investors the potential for the return of principal with the opportunity to earn market-rate, tax exempt interest (HB 5461). This is part of the Transportation Funding Task Force (TF2) package. Private companies could provide the upfront costs for transportation infrastructure projects and be paid back by the capture of part of property tax growth in the area under legislation. It was reported from a divided House Transportation Committee and is currently on the House Floor.
Canadian Environmental Authorities OK D.R.I.C.- Transport Canada, Fisheries and Oceans Canada and the Windsor Port Authority gave environmental clearance to begin bridge and plaza design work on the crossing that would be downriver from the current Ambassador Bridge. Building the new bridge has been a major controversy over a whether second span is needed at all, and whether that second span should be a separate project from the Ambassador Bridge building a second span next to its bridge. Canadian officials are resisting construction of that bridge. Already the project has U.S. environmental approval to begin design work.
Diesel Tax Parity SBs 862 and 863- A proposed 4-cent per gallon increase in the tax assessed on diesel fuel used by truckers took a significant first step Tuesday with approval from the Senate Transportation Committee. The bills would direct to bridge repair the $36 million raised by increasing the diesel fuel tax from 15 to 19 cents per gallon, putting it in line with the 19-cent per gallon gasoline tax. There was language in a substitute that prohibited the money going to a local highway authority, if it if offered workers full-time fringe benefits who work less than 35-hours per week.
Dems Unveil 8-Cent Gas Tax- A pair of House lawmakers announced Tuesday they are introducing an eight-cent per gallon gasoline tax increase, coupled with a 12-cent increase for diesel, in order to fill the expected hole in state transportation matching dollars. The proposal, which has not been formally introduced, would raise the gas tax on March 1 by four cents and the diesel tax by six cents. The diesel tax currently is four cents cheaper than the 19-cent gasoline tax, but the proposal would make both taxes equal to 27 cents by phasing in another proportional rate increase on January 1, 2013. The first phase of the tax increases would raise $240 million for road and bridge projects, filling the hole in expected state revenue that goes toward matching federal funding. By the time the proposal would be fully implemented, it would raise $480 million. Proponents of the plan say the money would reconstruct 2,275 freeway lane miles, 2,800 bridges and 4,900 intersections across the state.
Texting While Driving, Clears House and Senate- A bill package that prohibits texting on a wireless communication device while operating a vehicle on a highway or street. Texting includes reading, writing or sending a text message on a wireless 2-way communication device. Enforcement of the texting prohibition shall only be as a secondary action when the driver is detained for another Vehicle Code violation. The bills (SB 402, SB 468, HB 4394 and HB 4370).
A Fellow Correction Officer Attacked by Prisoner- Five minimum-security state prisoners participating on a work crew in Montcalm County attacked a correction officer watching them, stole the van that had transported them and fled until they were caught in Eaton County. The state council sends our prayers to him and his family and wishes him a speedy recovery.
Muskegon Will Get Pennsylvania Prisoners- The Muskegon Correctional Facility will still lose all of its Michigan prisoners as planned, but will take in as many as 1,000 prisoners from Pennsylvania early next year rather than closing.
Smoking Ban Passes the House, Senate and Signed into Law- The ban takes effect on May 1st. There are exemptions for cigar bars, smoke shops and casino gambling floor areas. The exemptions are very narrowly drawn and only apply to facilities in existence on May 1, 2010.
COBRA Subsidy Ends for Unemployed Workers, increase Medicaid Rolls- Laid off Michigan workers using COBRA to keep their health care insurance intact lost a federal subsidy for that program, which could lead to those residents ending up on the state’s Medicaid rolls. The COBRA subsidy, which was part of the federal stimulus package, covered $665 of the $1,023 average monthly premium Michigan residents pay. COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, is a federal program that allows people to continue the group health care benefits they had while they were working, but participants may be required to pay up to 102 percent of the plan’s cost, according to the U.S. Department of Labor.
Nurse License Increase- Some of the state’s scholarship program for nurses would return under HB 5593 was reported out of House Approps. 17-8-2. The bill increases nursing license applications and renewals and puts $8, up from $2, of the annual licensing fee into the Nurse Professional Fund, the scholarship fund. It totaled $720,000.
Chiropractor Expansion-Clears the House and Senate- The House passed a package expanding chiropractor scope of practice beyond the spine. It allows chiropractors to diagnose and treat sublimations, misalignments and joint dysfunction on other parts of the body than just the spine, and do not require insurance pay for those services. The bills were amended on the floor to be tie-barred to each other (HB 5091, 84-23; HB 5105, 99-9; SB 968, 84-23; SB 970, 102-6; SB 971, 102-6; SB 972, 101-7 and SB 973, 102-5).
Park Funding Passes House and Senate- (HB 4677 and HB 4678 this legislation is identical to two Senate measures still pending before the House (SB 388 and SB 389). This package would allow residents to opt to pay $10 to state parks when they pay for their vehicle registration. Transportation infrastructure groups oppose the move, saying registration fees should go to roads and bridges.
Renewable Operating Permit- The legislation (HB 5220) which increases the fees for the DEQ's renewable operating permit program became a huge political football before Christmas. The Building Trades put a letter in support of the H-6 substitute, which made it easier to get a coal fire plant permit, but it was also tie barred to the contractor consultant legislation and a bill that prohibits the state from enacting regulations more stringent than the feds. The House voted this down and passed a shell bill and sent it to the Senate. The Senate sent it back with the identical language about the coal fire plants and two tie bars. This move by the Senate is aimed at overriding Governor Granholm’s executive directive requiring the Department of Environmental Quality consider alternative energy generation in approving air permits for new power plants The House voted this substitute down sending it to conference committee. SEIU and Environmental groups opposed this version of the bill.
Chester Leaving- Environmental Quality Director Steven Chester will resign his post January 4 to return to private law practice.
DEQ Restructuring and Humphries to Head it- Department of Natural Resources Director Becky Humphries will head the new Department of Natural Resources and Environment. The final report from Bruce Rasher, who had been hired to oversee creation of the new department, is finished. Mr. Rasher’s plan would shrink the departments from 22 divisions and programs down to 14, divided among three units: Resource Management, Stewardship and Environmental Protection, each with its own deputy. Resource Management would include such programs as aquatic regulations, communications, habitat management, law enforcement, land survey, sand dunes and state game and wildlife area management. Stewardship would include forestry, land survey, parks and recreation, and the Waterways Commission. Environmental Protection would include brownfield redevelopment, hazardous waste, oil and gas, and solid waste. The plan also calls for additional public input in the department, not only through the Natural Resources Commission, which will continue to have oversight of hunting and fishing and the funds related to those programs, and the other boards transferred to the new department, but also through citizen advisory councils. The councils are patterned after bodies the DNR already has in place for the Upper Peninsula, and Mr. Rasher has proposed at least one for each of the four regions. Administrative functions – Science, Policy, Legislative and Regulatory Office; Media and Communications Office; Marketing, Education and Technology Office; and Administrative Office – would each also have a chief reporting directly to the director. The Office of the Great Lakes, a Cabinet-level post, would maintain its autonomy. The Mackinac Island State Park Commission also remains autonomous, but reports to the DNRE director.
Revenue Estimates from the Senate Fiscal Agency- While revenue for the 2010-2011 fiscal year is expected to grow by .5%, the state will still be facing a $1.6-billion shortfall in its general fund and a $423-million shortfall in the school aid budget.
Reforms, Reforms and More Reforms (a direct attack on public employees)-
Business Leaders Present List of Reforms to Legislature- Along with cutting the sales tax to 5.5 percent and stretching it to most services (exempted will be business-to-business services, health care, education, housing and other services) the MBT would see the surcharge eliminated and the gross receipts tax cut from 0.8 percent to 0.45 percent. The proposals also call for a two-year budgeting cycle and a public-private revenue forecasting council instead of the current Revenue Estimating Conference. They also call for eliminating or amending a series of laws that would make it easier for local governments and school districts to share services, and call for school districts to consolidate administrative functions. They also call for public employee health insurance contributions to meet the national public sector average and to cut state worker pay to the average compensation of state workers in the United States. They also called for the 3 percent pay increase many state workers will see in the 2010-11 fiscal year to be cancelled. They called for corrections reforms that focus as much on sentencing policies as administrative costs. And they also called for cutting the state workforce by between 5 percent to 10 percent.
Republican Reform Plan in a Nutshell- Public employees- will see a 5% pay cut; pay 20% share of health insurance premium; be subject to a 3-year wage freeze; eliminate health care benefits for retired legislators who have not vested before January 1, 2010; they have estimated a savings of $1.815 billion. House and Fiscal agencies do not agree with its proposed savings. Public schools- Cap districts’ administrative costs at 28% of entire budget; Require competitive bidding of custodial, transportation and food support services. They estimated savings: $363-$663 million. Local government- Expedite binding arbitration; ease efforts at sharing services They estimated savings: $70-$118 million. Medicaid- Eliminate some optional Medicaid services (yet to be determined). It is estimated to save $160-$500 million. State government efficiency- Reduce number of departments to 11; combine all licensing and permitting within one department; They estimated the savings to be indeterminate
Dillon Introduces 2-year Budget Cycle- House Speaker Andy Dillon introduced a constitutional amendment requiring two-year budgets. The measure (HJR SS) would require two-year fiscal periods beginning in 2011 if the measure gets on the ballot and voters approve it. Business Leaders for Michigan, which Mr. Dillon has looked to for government reform ideas, has come out in support for the two-year budgeting process, among other reforms.
The Governor's Plan for Reforms- The governor is proposing to: reduce costs by providing positive and negative incentives to encourage 7,000 eligible state employees and 39,000 eligible public school employees to retire; increase state employee participation in a new health-care plan that maintains critical benefits for new state workers and their families while reducing the cost to state government by 21 percent; eliminate lifetime health care for legislators; continue reforming Michigan prison policies to reduce costs; shift to a two-year state budget cycle; audit state contracts annually and review all tax expenditures biennially to identify needed changes and savings; implement pay-as-you-go budgeting; give local government, school, university, and other public employees the option to participate in the state of Michigan’s new, cost-effective health-care plan; require competitive bidding of contracts and additional shared services among local governments and schools; end immunity for prescription drug companies to enable recovery of Medicaid dollars as in 49 other states; streamline elections by allowing no-reason absentee voting, on-line registration, and elections-by-mail in some cases; require financial disclosures of all state elected officials and candidates; tighten ethics standards for elected officials, appointed officials, and state contract managers; and better regulate corporate special-interest campaign spending. More detail will be provided by Governor Granholm when she delivers her eighth and final State of the State address before a joint session of the Michigan Senate and House of Representatives at the state Capitol on Wednesday, February 3, at 7 p.m. The reform plan for state government that can be found at www.michigan.gov/gov.
More Detail on the Governor's Early Retirement Plan for Public Employees-
State Employees Retirement System-State employees who are members of the defined benefit (DB) plan will experience the following changes effective October 1, 2010:
• To ensure that the State Employees Retirement System (SERS) is fiscally
sound, a 3 percent employee contribution will be reinstated.
• Earned service credit capped at 30 years. Employees continuing in state
service beyond 30 years will be moved to a defined contribution (DC) plan for
any additional years of service accrued after September 30, 2010, excluding what
is purchased by the employee.
• Elimination of state-subsidized retiree vision and dental coverage for state
employees retiring after September 30, 2010. Retirees will be able to purchase
this coverage for a monthly fee through the plan.
• Increased retirement multiplier of 1.6 percent for eligible employees who
retire between July 1 and October 1, 2010. Details on eligibility will be
included in the fiscal year 2011 executive budget recommendation.
• Phased-in retirement option for retiring employees age 60 or older. Phased-in
retirement will be allowed for up to three years, enabling employees to collect
their DB plan retirement with a workload of no more than 20 hours per week for a
previously full-time employee. This option is available to the employees at
management discretion.
Michigan Public School Employees Retirement System- Public school employees who are members of the Michigan Public School Employees Retirement System (MPSERS) will be subject to the following changes effective October 1, 2010.
• To ensure MPSERS is financially sound, employee contributions to the plan
will increase by 3 percent for all employees except those in the MIP Plus
program whose contribution was increased in 2008. MIP Plus members’
contribution will increase by 0.9 percent.
• Elimination of subsidized retiree vision and dental coverage for school
employees retiring with an effective date after October 1, 2010. Retirees will
be able to purchase this coverage for a monthly fee through the plan.
• The retirement multiplier will be increased from 1.5 percent to 1.6 percent
for employees who retire with an effective date between July 1 and September 1,
2010, which will be paid by the applicable school districts.
• A new, more cost-effective hybrid retirement plan for new employees hired on
or after October 1, 2010, will be created. New employees will participate in
both a base defined benefit plan and a defined contribution plan.
• Phased-in retirement option for retiring employees age 60 or older. Phased-in
retirement will be allowed for up to three years, enabling employees to collect
their DB plan retirement with a workload of no more than 20 hours per week for a
previously full-time employee. This option is available to the employees at the
discretion of the school districts.
More details on the retirement plan will be provided at the executive budget is presentation on February 11. The retirement incentive plan will also be posted on the Office of Retirement Services Web site at www.michigan.gov/ors .
Oregon Voters Increase Taxes on the Rich and Businesses-Voters in Oregon voted to raise taxes on businesses and the wealthy to help close the state's budget gap. By a substantial margin, they approved Measure 66 - which will raise income tax rates for married filers with incomes over $250,000 - and Measure 67 - which will overhaul the state's corporate minimum tax and create a new top corporate income tax rate.
Report by the Commission on Unfunded Mandates- State government has routinely ignored the 1978 Headlee Amendment to the Constitution barring it from mandating actions by other governments without providing the funding to implement those changes, according to a report. In just 2009 alone, the Legislative Commission on Statutory Mandates identified $2.2 billion in unfunded mandates imposed by the state. The report’s tone contained heavy contempt for the state’s conduct and made the following recommendations: Replace the Headlee implementation legislation (PA 101 of 1979), which is derided as ineffective; Start a fiscal note within the legislative process to estimate the enhanced cost to local government from bills and prevent legislation from taking effect until the state provides the funding to implement the changes; the same recommendation was made for the administrative rules process; and institutionalize the role of the special master within the Court of Appeals for future Headlee challenges.
Dems Looking at Early Endorsement at April Convention- In an effort to give candidates for two of the top state government posts some additional campaign traction, the Democratic Party is planning an early “endorsement convention” that would take place in the spring and choose favorite candidates for secretary of state and attorney general. The idea has to be approved by the party’s central committee.
Rep. Simpson Dies of a Heart Attack-Rep. Mike Simpson, who was diagnosed with a rare blood disease called light-chain deposition in October, died of a heart attack. The 47-year-old Mr. Simpson (D-Jackson), a two-term lawmaker and chair of the House Agriculture Committee, had the heart attack as his wife drove him home from the Cleveland Clinic.
In the Courts-
Supreme Court Ruling on Independent Expenditures- The U.S. Supreme Court ruled that campaign finance laws that bar independent expenditures by corporations and labor unions in favor of or against candidates are an unconstitutional violation of free speech rights. Justice Anthony Kennedy wrote in the 5-4 majority decision in Citizens United v. Federal Election Commission (USSC docket No. 08-205). He was joined by Chief Justice John Roberts and Justices Antonin Scalia and Samuel Alito. Also joining him on all but a provision allowing for some regulation was Justice Clarence Thomas. Except for Mr. Thomas, all the court ruled that states and the federal government could continue to regulate corporate and union expenditures by requiring disclosure. The decision also keeps in place legal prohibitions on corporations and unions making direct contributions to candidates and their campaign committees. But it does allow corporations and unions to spend money on advertising or other campaign activities to support or oppose a candidate.
Court Ruling on Public Employee E-mails- Emails sent by public employees aren’t automatically subject to release under the Freedom of Information Act unless the messages are sent in the official capacity of the employee or applicable as evidence, the Court of Appeals said in a published opinion. Striking a balance between government transparency and the privacy of public employees is an issue for the Legislature to review since more government institutions use advanced technology instead of written messages, said the judges in the case of Howell Education Association v. Howell Board of Education (COA docket No. 288977). In the case, the school district released email messages between employees under a FOIA request that was apparently looking for information about union negotiations in which the employees were involved.
Court Dismisses Childcare Organizing Complaint- An initial effort to block unionizing childcare workers here in Michigan through court action was dismissed. On Dec. 30 Court of Appeals dismissed the case of Loar v. Department of Human Services (COA No. 294087).
Petition Circulators- Michigan cannot require petition circulators to be residents of the district of the officeholder they are working to recall, a federal judge ruled Friday. Judge Robert Holmes Bell ruled in a case stemming from the attempted recall of House Speaker Andy Dillon that the state’s residency rules for recall petition circulators violated the First Amendment rights of those who live outside the district.