Use Tax on Services- This short-lived tax (only 15 hours) was repealed in a weekend emergency session December 1 with HB 5408. It is replaced with a surcharge on the MBT of 21.99% with a cap of $6-million. This replaces $614 million this year and $750 million next year that the services tax would have brought in. In 2017 the legislature will revisit the issue and see if there was a growth in personal income over the last three years, if so, then it will sunset.

Early Voting-House Committee on Ethics and Elections formed a workgroup to iron out the differences between Rep. Vagnozzi’s early voting bill (14-days, a tabulator available and similar poll procedures HB 4090) and Rep. Ward’s bill (7-days and similar to absentee ballot procedures HB 4508).

Public Service Accountability Act Up and Running- House Labor Committee held two hearings taking testimony on a portion of SEIU’s Public Service Accountability Legislation, HB 4443, which prohibits company’s that receive state dollars from using them for anti-union efforts. Anticipate this and the other portion of the public service accountability moving in January or February.

DNR and DEQ Funding Holes-A proposed deal to close the hole in the DNR and DEQ budgets using one-time funds available from our state switching to the MBT. These holes are in these budgets because they are based upon fee bills that have not passed. DNR Director Humphries encouraging $5-million supplemental instead of the increase in hunting and fishing licenses, but warns it is not a permanent solution and in 2009 we will still be facing a shortfall.
Take action on these issues at:

http://seiuaction.org/campaign/ProtectOurStatesNaturalResources

http://seiuaction.org/campaign/protectmienvironment

Jail Overcrowding Bills signed by Governor- (PA 139 & 140)- Assists counties to develop jail populations management plans and authorize certain individuals to reduce sentences or take steps when jails reach 95% capacity for seven days straight. Please see July 10th Under the Dome Column for more information on this bill package.

Senate Passes Cuts to Itself on Pay and Benefits- Senate Concurrent Resolution 22 would cut legislators’ salaries by five percent beginning with the 2008 – 2009 session. It would also prevent legislators’ pay from increasing in the future beyond the rate of inflation. This resolution passed in the Senate by a 32 – 4 vote. A similar resolution passed in the House in May. The Senate also unanimously passed Senate Bill 868 (Graded Scale Premium), which would have the State pay 30 percent of the premium of a retired legislator who served for four years – the equivalent to two House terms or one Senate term. That rate would increase by six percent to a maximum of 90 percent, if they served the maximum of 14 years. Senate Bill 869 would implement similar changes for the Governor and other Executive officers. Currently, Legislators who serve at least six full years receive full retiree health benefits after age 55 or separation from state service, whichever comes later. Legislators who began serving after 1996 do not receive a pension but rather participate in a 401(k) system. The House passed a stricter bill (HB 4580) to eliminate lifetime health benefits for retirees back in May. In the ultimate touché the House Oversight and Investigations Committee approved maximum legislators retiree health care coverage at 42 % on December 6, 2007.

Single Market Reform Moves the House- Individual Market Reform Insurance Passes The House- (HB 5282, HB 5283, HB 5284 and HB 5285)- This legislation is similar to the small market reform enacted a couple of years ago. Creating rate bands, though narrower than with the small group reforms, to control cost increases, and limit the ability of insurers to "cherry-pick" the healthiest persons while leaving higher cost individuals to the Blues, which would retain its tax-free status and status as insurer of last resort. Please see October 22 Under the Dome Update for more information on this bill package.

House Labor Committee Kicks Out Anti –Discrimination Package- House Bill 4532 (Gonzales)- Prohibits employers from firing people for the legal conduct they engage in during non-work hours. House Bill 4887- Bans employers from using a person's credit history in determining whether to hire a person. House Bills 4926 & 4927- Prohibits employers from discriminating a current or potential employee based on their physical fitness, other physical characteristics and a known or believed illness or health condition within a worker's family.

Mortgage Package- Senate unanimously passed a package of bills aimed at regulating mortgage lenders more closely in order to address the rash of home foreclosures that grown as the subprime lending market collapsed. Senate Bill 826 creates the Mortgage Industry Advisory Board and requires it to communicate to the Commissioner of the Office of Financial and Insurance Services (OFIS) issues concerning the residential mortgage industry. Senate Bill 829 establishes procedures for renewing loan officer registration. Senate Bill 832 prohibits a loan officer registrant from engaging in fraud, deceit, or material misrepresentation in connection with any transaction; from failing to provide borrowers with information required by law; and from making a false, misleading, or deceptive advertisement regarding mortgage loans or their availability, among other things. The House Banking and Financial Services Committee has been holding hearings on this issue as well. House Bills 5443 & 5444 passed the House, which authorizes MSHDA to use tax-exempt bonds for refinancing purposes and provides refinancing at affordable fixed rate loans from ARMs to individuals facing foreclosures.

Smoking Ban Clears House, But is DOA in the Senate- Please see July 10-August 6, 2007 Under the Dome Column for more information on this bill package. Senate leadership sent it to a committee where it will die.

House Retiree Health Care Reforms Committee voted out Bond Aid (HBs 4451, 5465, 5466)- Which would allow municipalities through Sept. 30 2010 to issue bond securities to cover retiree health care costs.

Governor Issues E.D. 21- It bars discrimination based upon gender identity or expression within state government.

Kids Count Data Book, which analyzes the wellness of Michigan's children is available on Michigan League for Human Service Webpage at http://www.milhs.org/.

Presidential Primary- Ingham Circuit Judge William Collette ruled that the public act changing Michigan to a Presidential primary to be held on January 15th was unconstitutional, because it would have granted access to voter data from the primary to just the Democratic and Republican parties.
The Michigan Supreme Court overturned Judge Collete’s and the Court of Appeals Decisions holding that the law served a predominant public purpose and needs to be interpreted reasonably. So the primary is on, but the Democratic Presidential Candidates that removed their names will still be off of the ballot.

Recall Update- Recall language for Bieda, Gaffney, Corriveau, Dillon and Sheltron have been found to be “unclear” but these decisions have been appealed by Leon Drolet's organization. Recall language for Dean and Donigan was found to be clear, so look out for petition circulators. Vagnozzi and Griffin have recently had recall petitions filed against them.

Appointments:
Don Krichbaum- Replaces Mary Lannoye as Governor Granholm’s new chief of staff.
Kenneth Theis- will be the new director of DIT, replacing Takai.

In the Courts:
DOMESTIC PARTNERS-
The Michigan Supreme Court heard oral arguments on November 6, 2007, on whether a 2004 constitutional amendment prohibits the state's public employers from providing health care benefits to same-sex domestic partners.

Court of Appeals ruled that Clerks have no authority to automatically mail unsolicited absentee voter ballot applications in Taylor v. Currie.

Conference Reports:
Department of Agriculture- (SB 222), totaled $109.4 million ($31.16 million general fund). This is an increase from what Govenor Granholm had proposed, but it is a cut from last year's budget of about .75 percent. The budget also includes a gross $2.41 million increase for economic adjustments and $3.4 million to restore executive order cuts made during the FY 2006-07 budget.
Among the cuts in the conference report is $3.9 million from the Agricultural Equine Industry Development Fund, which represents payments Detroit casinos will no longer have to make once they open their permanent facilities. Another $3.8 million represents loss of federal funds to fight the emerald ash borer. Local Conservation Districts, the guv eliminated funding, the conference committee restored partial funding. Intercounty drains, the governor eliminated funding (5 FTEs) but the conference committee restored partial funding for 2.5 FTEs. Ag stats, the guv reduced funding by 3 FTEs, the conference committee partially offset this (reducing it only by $199,500). Aquaculture/Cervid program, the guv reduced funding by 3 FTEs, the conference committee partially restored it by 2 FTEs. Right to farm, the guv reduced funding by 2 FTEs ($150,000) , the conference committee partially restored funding (reducing it $ 10,000). Laboratory, the guv reduced funding by 2 FTEs ($150,000), the conference committee partially offset this cut with restricted funds (reducing it $ 75,000).  The budget has a 10 percent increase in general fund spending, but most of that, $1.6 million, is for bovine tuberculosis testing to allow the state to keep its split status and limited testing requirements in most counties. Food safety saw a $ 200,000 increase due to increased penalties and migrant housing saw a $250,000 increase from federal funding. The budget pulls $150,000 from the Department of Human Services, to help fund food banks around the state, keeping total funding level with last year at $630,500. Future Farmers of America and Michigan 4-H, which shared $100,000 in grants, have been moved to the higher education budget.

Community Colleges (HB 4360)- The Conference Report restores funding related to the revaluation of the pension assets in E.O. 2007-3 and the payment delays. It also provides a 1% across the board increase.

Community Health (HB 4344)- totals $12 billion ($3.1 billion in general funds). The gross spending is 7.6 percent, or $852 million above current year spending, while the general fund portion will see a 6.3 percent increase, or $185 million. Community mental health direct care workers will see a 2 percent wage increase, costing $3.7 million in general funds. Adult Home Help saw a $6-million increase to recognize the statutory increase in the minimum hourly wage for adult home help workers and that no worker receive less than $7.50 per/hour as of April 1, 2008. Medicaid coverage for 19- and 20-year-olds and caretaker relatives was left intact. The Healthy Michigan Fund is reduced by $1.8 million, $900,000 of which comes from pregnancy prevention, family planning, early hearing detection and screening and informed consent materials reimbursement. MIChoice was expanded by $5 million ($2 million general fund). The Healthy Kids Dental program was increased by $2.6 million ($1.1 million general fund).  The bill assumes a $10.1 million savings from establishing a Medicaid Estate Recovery Program, as well as $33 million gross for Medicaid citizenship verification requirements.  The budget contains provisions increasing capitation payment rates for Health Plan Services by 4.2 percent and Medicaid Mental Health and Substance Abuse Services by 2.5 percent to make rates actuarially sound and $243 million was added to spending to reflect expected increases in inflation, caseload and utilization.  Medicaid hospital Quality Assurance Assessment Program payments are increased under the budget to total $8.8 million, and with Medicaid matching funds, the spending authorization totals $20.9 million. And $21.4 million was added in general funds to offset QAAP fee revenue lowered by the federal government. The assessment for QAAP will be raised to generate $60 million, of which $17.5 million will be used to offset general funds. The rest will be used to get matching federal monies and the gross funding of $102 million will go back to hospitals.  The budget spends $1 million for free health clinics throughout Michigan, while $350,000 proposed by the House for a community health center serving low-income and uninsured people was cut from the conference report.  A regional jail diversion program the House proposed at $500,000 was not included in the budget. But there was $1 million set aside for two added mental health outpatient teams for the DOC. Foster care children will also be put in a Medicaid HMO on or before July 1, 2008, saving $1.7 million ($733,000 general fund). Those children are currently on a fee-for-service system. The budget also calls for privatizing food and custodial services at the state's hospitals and centers. Language was added requiring the Department to permit, in accordance with federal and state law, nursing homes to use dining assistants. This is a potential problem for our healthcare local, SEIU in previous years was able to stop this endeavor that would reduce our bargaining units and lower the quality of care in nursing homes.

Department of Corrections (HB 4348)- includes $80 million in spending cuts and $18 million in spending increases, so the net effect of reductions is $62 million. It totals $2.1 billion ($2 billion in general funds). The general fund spending is 6.6 percent, or $124 million more than current year levels, while the gross spending is $125 million, or 6.4 percent more Savings totaling nearly $58 million are found by closing Southern Michigan, Jackson Seven Block, Camp Manistique and Riverside. The Macomb Drop-in Unit's opening is delayed, the Michigan Reformatory will be re-opened and 50 beds at Camp Branch will be delayed from opening. The department will also be regionalizing services at Ionia, Jackson and Kinross to save $2.6 million in general funds. Also, outpatient mental health treatment teams will be phased in, saving $1.2 million. Delaying and canceling some training schools for new Corrections officers will also save $3.5 million, and delaying the reinstitution of the public works program by three months saves $1.5 million. The spending increases for the DOC include adding an eighth bunk to eight facilities ($8.6 million), adding 100 beds to various facilities ($1.4 million) and expanding GPS tethering to 500 prisoners who will be released since they have already passed their first parole date ($4 million). The bulk of the spending hikes came from paying $13.2 million to fund the county jail reimbursement program at 2006-2007 levels. The budget also requires the department to do a cost-benefit analysis to find cost savings of at least 5 percent through privatization, but would allow state employees to bid for the work. This is a watered down version of SEIU’s Public Service Accountability Act.
An independent study will also be mandated regarding mental health and substance abuse services. Several quarterly and annual reports will be due to the Legislature regarding the Michigan Prisoner Re-entry Initiative, including uniform standards for pilot sites and funding. And a sentencing guidelines study will be conducted and a report made to the Legislature under the bill. The Offender Tracking Information System will also now be required to remove people who were wrongfully convicted from the database under the bill. The budget does not include the money the House proposed for mental health treatment courts, but it does include $100,000 for officer mental health awareness training.
The department would also have to start having facilities be tobacco-free by September 1.
Public works projects will continue at the current year levels, but user fees will be doubled and prisoner pay will increase by 10 percent under the budget.  The budget includes Legislative Intent language to limit dry cleaning allowance.

Department of Environmental Quality (HB 4358)- The budget assumes $16.2 million in various fee increases proposed by the governor that has not been taken up by the Legislature. If the fee increases aren't approved, the budget requires that an alternative be determined by January 15. It totals $371 million ($32 million in general funds). The budget does include $400,000 in restricted funds for expedited water and wastewater permitting, as well as $250,000 for real time water quality monitoring, which the House had recommended. There is boilerplate stating the Legislature intends to reimburse $70 million to the refined petroleum fund.

Higher Education (HB 4350)- Totals $1.9 billion in gross appropriations ($1.8 billion general fund). With a 1 percent across-the-board increase to all 15 public universities, the overall hike in spending is 6.1 percent, or $109 million, however the general fund portion is an 8.4 percent increase, or $137 million. Approximately $33 million of restricted monies was cut out of the budget.
The bill contains two different articles of appropriations, separating Michigan State University, the University of Michigan and Wayne State University from the other 12 colleges. However $500,000 the House had assigned for the university research corridor was not included in the conference report. The budget does ask that the three large research schools consolidate their services.
All schools will see a restoration of funds totaling $139 million, which was cut during the 2006-2007 fiscal year to balance the budget.  The tuition grant program, which the governor has proposed eliminating several times and may face a line-item veto, is held intact in the conference budget with a minimum grant of $2,100, but it does reflect the $2.1 million reduction from the current fiscal year and appropriates $1.4 million if there is money available to be carried forward from this year. The Michigan Merit Award is reduced under the budget by $24.2 million to reflect the programs transition to the Michigan Promise Grant Program. The Indian Tuition Waivers are also funded by $1.4 million for all universities (all in general funds). Both the agricultural experiment station and cooperative extension will see a 0.5 percent increase in funding under the budget, which is less than the 2.5 percent proposed for the experiment station and the stagnant funding for extension proposed by the House. In boilerplate, the budget includes language stating it is the intent of the Legislature to see that state universities do not purchase or lease vehicles built by foreign auto manufacturers. The budget also requires universities to submit a research commercialization plan to the state.
The budget does not include the requirement that universities give admission to all students in the top 10 percent of their class. The House had added that section, making the penalty for noncompliance a 15 percent reduction in state aid. The Senate's requirement that an independent commission audit each school was also not included. The conference did adopt a Senate recommendation that the universities will work with community colleges on student and credit transferring.

General government (SB 229)- It totals $3.1 billion in spending ($661 million general fund). That represents a 4.3 percent, or $130 million in spending above the current year level, but the general fund portion increased by 3.4 percent, or $22 million. The attorney general budget totals $73 million, of which $32 million is general fund. The gross spending is $8 million, or 12.2 percent above current year level, while the general fund appropriation is raised by $1.6 million, or 5.1 percent. Cuts totaling $2.1 million were made to department operations, the Prosecuting Attorneys Coordinating Council and Child Support Enforcement. Nearly $233,000 was added in spending to the budget for real estate fraud investigations. The Department of Civil Rights budget totals $15 million, of which $12 million comes from the general fund. That is a $639,000 increase in gross spending (4.6 percent) compared to the current fiscal year, but the general fund sees a $394,000 increase in spending, or 3.3 percent. The executive office budget totals $5.3 million, all paid for with general funds. That represents a $1,400 rise in spending compared to the current fiscal year. The $204,000 in discretionary cuts proposed by the Senate was not included. The DIT budget totals $429 million, all of which comes from interdepartmental grants and transfers. That is $54 million above current year spending levels, of which $19 million is for the Department of Community Health's Michigan Medicaid Information Systems. The Legislature budget totals $115 million, of which $113 million is paid for with general funds. The increase above current year spending is $3.2 million, or 2.9 percent. The budget restores $3.2 million of the $5.3 million the Legislature cut in its budget this year.
The legislative corrections ombudsman and sentencing guidelines commission funding was not included. The legislative auditor general budget totals $16 million, of which $13 million comes from the general fund. The gross spending is $721,000, or 4.8 percent, above current year levels and all comes from the general fund portion but the percentage is a 6.1 percent increase. The House had sought a 1.2 million increase. The $452,000 increased spending for salaries, wages and insurance asked for by the Legislature was not included in the budget. Nor was the $162,000 in discretionary spending cuts the Senate proposed for the department. The DMB budget totals $505 million, of which $267 million is paid for with general funds. The budget is less than the current fiscal year by $3 million (a 0.5 percent decrease), while the general fund portion was cut $5 million (a 1.9 percent decrease). The Department of State budget totals $208 million ($29 million general fund). While gross spending is 5 percent, or $10 million above current year levels, the general fund portion is cut 62.2 percent, or $11 million. Nearly $1 million was added to the budget to reimburse locals for deputy registrar training and processing voter registration applications. The budget includes boilerplate requiring the department to notify the Legislature about Secretary of State branch closings and consolidations. The Treasury budget totals $1.8 billion; $189 million is funded by general monies. That is $74 million or 4.4 percent above current year spending, while the general fund portion is increased by $88 million or 87.5 percent. The Senate got its $1.4 million in administrative cuts to the department, but $9 million was added to the budget for administering the new Michigan Business Tax, income tax increase and new services tax. Constitutional revenue sharing increases by $8 million from actual payments made in 2007, but compared to the 2006-07 enacted appropriation of $690 million, revenue sharing is cut by $25 million. Statutory revenue sharing decreases in the budget by $6.2 million from actual payments in 2007, but compared to the enacted appropriation of $408 million, the budget represents an $8.8 million cut.

Department of History Arts and Library (SB 231)- Totals $49.5 million ($41.9 million general fund) it is some $800,000 under the final spending level for last year, but the overall budget is $4.6 million under the amounts that were initially appropriated for 2006-07 before mid-year cutbacks.
Aid to libraries at $10 million is $2.1 million below the appropriations for last year. Separately, the $394,700 cut to the Library of Michigan leaves its budget at just over $6 million.
The grants to the arts $7.8 million for 2007-08, down from $10.1 million in the initial appropriations but up $1.2 million from the amounts available after the mid-year cuts. No line item grants were provided to the Detroit Institute of Arts, Detroit Zoo or the Henry Ford museum, with all funds dispersed on an application basis. No one entity can get more than 15 percent of the available funds, and the budget provides a separate category of cultural projects from historical society projects.

Department of Human Service (SB 232)- It totals $4.588 billion for 2007-08, $84 million more than what the Senate initially appropriated and $56 million more than the House's initial allocation. General funds total $1.312 billion in the budget. The budget calls for the state to employ a total of 10,559 workers in the department. It adds 171 child welfare positions and an additional 150 DHS field staff. The focus of the budget had been to enact some sort of privatization of a variety of functions, with the initial Senate version of the bill privatizing foster care and adoptions along with juvenile justice. The administration officials had argued the level of privatization the Senate wanted would actually cost the state money. Reductions in the budget and those are concentrated in juvenile justice. The number of beds at the Maxey School will be cut - 80 medium security beds will be closed and 70 maximum-security beds will remain - which will result in a loss of 131 workers and 10 administrative staff. Daycare services was cut by $18 million reducing the maximum allowable hours to 90 over a two week period (currently it 100). The budget also will increase residential facility rates at centers for abused and neglected children and other juvenile justice centers, as well as increasing the rates paid private adoption agencies.

The Judiciary Budget (SB 233)- Total spending is $259.3 million or .4 percent below last year's spending, while the $158 million general fund allotment represents a 1 percent increase.
It has $843,500 in reductions that takes $423,000 from the Court of Appeals and spreads the rest across areas such as administration, the court administrative office judicial information systems and other smaller areas. The budget restored $250,000 that had been targeted in cuts to the public defender program. Another $900,000 was taken from the court equity fund. The bill contains $339,700 to pay for judgeships created or expanded last year and effective January 1.

Department of Labor and Economic Growth (SB 234)- It totals $1.301 billion, just $46 million in general funds, which is 5.7 percent larger than the current year's appropriation. It provides $10.9 million in fire safety grants for communities and is covered by reducing the liquor revolving fund by $1.3 million and boosting fire protection revenue by $3.2 million. No general funds will be included in the grants for this fiscal year. It cuts $40 million in additional general fund monies Governor Granholm proposed for the new "No Worker Left Behind" program. The program is created in the budget - as part of the workforce training subgrantees - but is funded at a total of $20.6 million, all federal money.
Granholm had also called for $15 million for the Michigan Nursing Corps to boost the number nurses and nursing teachers in the state. Her request was cut to a tenth, with $1.5 million in general funds. That program will take 200 individuals with bachelor degrees and allow them to earn a nursing degree in an accelerated one-year program. The budget also calls for nearly $2.2 million in general fund to the Michigan State Housing Development Authority to revitalize downtowns. The conference report also agreed to a proposal by Ms. Granholm on putting a contingency to funding for the statewide expansion of the jobs, education and training program until there are savings from 2006-07 documented from 50 percent of the state. The report also keeps in place a bar against the state using funds to try and ban the use of credit scores in setting insurance policies and it also continues to bar using any funds to enact workplace ergonomic rules more stringent than that set by the federal government.

The Military & Veterans Affairs (SB 235)- It totals $129.4 million, $40.4 million in general funds. The overall budget is $5.7 million larger than the 2006-07 budget and the general fund budget is $1.1 million more than the previous year's appropriation. The budget had to cut spending by $431,000 to meet its target and did so by reducing funding in both the Grand Rapids home, by $259,000, and the Jacobetti Home, by $172,000.

Department of Natural Resources (HB 4354)- is also predicated on increasing fees for hunting and fishing licenses, which have not yet been voted on. It totals $289 million ($24 million in general funds). That represents a 2.2 percent cut, or $547,000, in general funds, while there is a 2.1 percent increase, $6 million, in gross spending. There was just over $1 million in general fund reductions, which recognizes cuts made to forest campgrounds, law enforcement and continuing other reductions made in the current fiscal year, which will go toward soil conservation district grants.
If the fee increases aren't enacted by January 15, the department will have to make cuts Director Rebecca Humphries outlined.  In the boilerplate language of the bill, the DNR will now be required to notify the Legislature if policy changes are made internally that will affect small businesses.
A workgroup looking into long-term funding will be organized as directed by the bill, and the department will be required to work with the NRC on locating opportunities for corporate sponsorship of state parks. The budget also states it's the Legislature's intent to restore the $20 million taken from forest development 21st Century Jobs Fund to balance out the current year budget.

School Aid- (SB 4359)- Totals $13- billion ($34.9 million GF), it is $900,000 ($90,400 GF) smaller than the 06-07 budget. Foundation grant $8,433 per student, $48 / student for schools at or above this level and $96 /student for districts at $7,108 last year. Early childhood programs increase to $3,400 per child. Declining enrollment will receive $20 million in assistance. Granholm vetoed $1.3 million for transportation subsidies for large, rural districts.

State Police (SB 238)-It totals $566.5 million and is a $52,000 larger than the 2006-07 budget, the general fund portion of 273.8 million, which is $30.6 million larger than the previous year. The general fund portion is also $5.2 million larger than what Ms. Granholm initially proposed.
Six technicians from the Marquette laboratory would be laid off, though they would retain bumping rights over other lower-level workers. The budget also closes a laboratory in Sterling Heights with those workers being transferred to other facilities. Committee chair, Sen. Valde Garcia , urged the department to hold off making any layoffs until the state knew whether any money would be lapsed to the 2007-08 budget from funds collected in the 2006-07 budget.
The budget was able to add $3.2 million to fully pay for trooper salaries to avoid layoffs. However, the committee was not able to completely finance road patrols. It was able to add $1.3 million to the budget to help finance that activity, but $1.9 million was needed to fully fund the line.  The budget also calls for the state to purchase the building the Calumet State Police Post is located in, a move that should help the state save money over the long term.  And the budget also calls for the state to conduct a police allocation study to review how law enforcement resources are deployed across the state.