Under the Dome
Capitol Update, June 8-Jluly10, 2007
Cynthia Ann Paul
The Michigan Business Tax-The replacement for the Single Business Tax (SBT), passed both the House and the Senate, 75-34 and 32-3 respectively, June 28th, 2007. Senate Bill 94 creates an income and a modified gross receipts tax on businesses and provides tax relief for industrial personal property owners. The MBT imposes a 4.95% tax on business income (profit), with a full deduction for partnerships and other pass-through entities for net earnings from self-employment. The bill also incorporates a 0.8% tax on modified gross receipts (gross receipts less purchases of goods), with a full deduction for payments to subcontractors are provided for construction firms. Financial institutions would pay a tax of 0.235% of net capital, and insurance companies would pay a 1.25% tax on premiums. The MBT retains most of the credits offered in the SBT, there are also several new credits. The MBT now includes 12-mill exemption for commercial personal property, as well as a 24-mill exemption for industrial personal property. In addition, companies could claim a refundable credit for 35% of their industrial personal property taxes. The MBT also creates the Michigan Entrepreneurial Credit: up to 3-year exemption from taxes for new businesses that meet certain jobs and investment requirements. Small businesses with less than $20 million in gross receipts and income for a single owner not over $180,000 could opt to pay a tax of 1.8% of adjusted business income.
Tobacco Securitization Signed into Law- This controversial provision will help correct the state's current year budget by securitizing some $415 million in tobacco settlement monies. Governor Jennifer Granholm signed HB 4850 , PA 18, after it passed the Senate on 23-14 vote on Tuesday and the Senate changes were approved by the House on a 78-29 vote. Currently, the state is authorized to securitize $400 million of its tobacco settlement money - which stems a lawsuit settlement negotiated now nearly a decade ago by most the states with the nation's largest tobacco companies - and use those funds for the 21st Century Jobs Fund. The bill more than doubles that amount to $815 million to help finance shortfalls in the current budget.
LSJ Published Wage Information on State Employees-The Lansing State Journal posted a database of state employee employee's name, title, department and county as well as annual salary. Employees were particularly concerned that the site would provide sufficient information to allow people to locate them in addition to knowing what they earned. SEIU has an active letter writing campaign opposing this, please take action at http://seiuaction.org/campaign/stateemployeesprivacysafety_clone.
Republicans Call for State Employee Cuts- Senate Republicans issued a demand to Governor Jennifer Granholm that she stop a scheduled pay increase for state workers and "immediately negotiate at least $300 million in wage concessions" or other reforms before it will consider any kind of tax increase. Senate Republicans included four specific demands, saying these conditions had to be met before they "before the Senate will consider a tax increase:"-
Democrats "must vote with use to pass our list of reforms to reduce government spending, and deliver millions of dollars in savings for Michigan taxpayers;”
Ms. Granholm "must exercise her executive authority and halt the state employee pay raise scheduled to take place this September:"
Ms. Granholm "must immediately negotiate at least $300 million in wage concession and or (sic) other state departmental reforms." And the statement charges that the $300 million in cuts Ms. Granholm said she has agreed to "don't exist;"
"If a tax increase is still necessary after the reforms have been passed, then any increase offered by House Democrats must be adjusted to reflect the savings from the reforms."
SEIU has an active letter writing campaign opposing this, please take action at http://seiuaction.org/campaign/standupforstateemployees2_clone_clone_clone
SEIU Public Service Accountability Resolution (HR 92) passes the House - HR 92 sponsored by State Rep. Fred Miller, urges state departments to do a thorough cost benefit analysis (include all hidden costs) and that there must be an actual cost saving of at least 10% before any efforts to privatize and that it must go before the appropriations committees for approval. It also requires all contacts to outsource and their performance must be subject to Freedom of Information Act and a comprehensive audit. This was unanimously voted out of House Labor Committee and passed the House by a voice vote on June 13th.
Jail Overcrowding Reform Legislation Passes the House- House Bills 4234 and 4725 amend the Jail Overcrowding Emergency Powers Act. House Bill 4234 would authorize a county or judicial circuit to adopt and implement a county jail population management plan to reduce or prevent chronic jail overcrowding. This plan would authorize a sentencing judge to suspend or reduce any imposed jail sentence that he or she ordered. A committee comprised of the sheriff, prosecuting attorney, chief circuit judge, and a representative district judge of each affected county must then approve this plan. For counties that chose not to adopt such a plan, House Bill 4725 would require a sheriff to take several actions on the fifth consecutive day on which the general population of the county jail exceeded 95 percent of the jail's capacity. The sheriff would first review the outstanding bonds for each prisoner to determine whether the bond amount could be modified. The sheriff would then release any sentenced prisoner who had served 85 percent or more of his or her sentence. This would not apply to any prisoner that the chief circuit judge believed presented a threat to the public safety if released; or those serving a sentence for a violent or assaultive offense, sex offense, prison or jail escape offense, weapons offense, drunk driving offense, or certain controlled substance offenses.
“Punk Prison” Closure Upheld by the Courts-The state was within its rights to cancel the lease and management contracts on the Youth Correctional Facility near Baldwin and move the inmates from the privately-run facility into state-run prisons, the Court of Appeals has ruled. Judges Jessica Cooper, William Murphy and Janet Neff ruled (The Geo Group v. Department of Corrections, COA docket Nos. 273466 and 273492) ruled that there was no mistake, no fraud and no unjust enrichment in the state's action.
House Labor Takes up Minimum Wage Increase for Tipped Employees House Bill 4452 would increase the minimum wage paid to tipped employees, it is still in House Labor Committee.
House Labor Takes up Anti-discrimination Bills-
House Bill 4532 (Gonzales)- Prohibits employers from firing people for the legal conduct they engage in during non-work hours. This still remains in House Labor Committee.
House Bill 4887- Bans employers from using a person's credit history in determining whether to hire a person. This still remains in House Labor Committee.
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. This still remains in House Labor Committee.
House Labor Committee Takes up Staffing and Mandatory Overtime Legislation-House Labor Committee has begun taking testimony on HB 4339, which requires hospitals to establish an acuity based staffing plan, sets minimum nurse to patient ratios and prohibits hospitals from mandating overtime to meet their plan and ratios. If passed, this would greatly improve the working conditions in MI’s hospitals, their turnover rate and quality of care. This is a key issue SEIU has been advocating for over the last 6-years. Testimony on this legislation will continue when the legislature returns from their break.
Gift Card Protection Legislation Passes the Senate- Gift cards would be good for at least five years under two bills the Senate unanimously by the Senate. Senate Bills 387 and 388, gift cards or gift certificates issued by retailers would have to be good for at least five years before they could be considered abandoned. The measures would also outlaw retailers charging a fee for non-use or use of the cards.
The Senate Passes Legislation for a New Detroit Retail Center- SB 588 provides for a 30-acre site in Detroit developed as one of the largest retail areas built in the city since the 1950s. It would allow the city to use bonds as part of a corridor improvement authority to develop the site along Eight Mile Road and adjacent to the State Fair Grounds. The project already has a letter of intent from J.C. Penney's that it would locate a store in the new lifestyle shopping center that would be built in the now vacant property. The legislation amends the state's current Corridor Improvement Authority Act.
Senate Passes CAFO Bills-Strengthening environmental regulation of concentrated animal feeding operations, SB 447, SB 448, SB 501, SB 502, SB 503 and SB 504. The package has pitted agricultural interests directly against environmental interests, with environmentalists worried that the legislation will effectively give state protection to the operations.
Legislation Restricting the Amount of Lead in Kids Products Passed the House-Jewelry, lunchboxes and toys and other kid products would be prohibited from having a lead content in excess of .06 percent of the item’s total weight, HB 4132, HB 4240, HB 4399 and HB 4936.
Booster Seat Legislation Passed the House-Bills that would allow the state to receive $1 million in funding to educate and help pay for booster seats - by making those child seats a requirement for kids aged four to eight. The package (HB 4536, HB 4537, HB 4538 and HB 4939) would require kids too big for a regular car seat but not quite big enough for an adult-sized seat belt (weighing 40-80 pounds and less than four feet, nine inches tall) to ride on a booster seat.
New Food Safety Standards- Legislators introduced bills that would bring the state in line with the latest federal food safety guidelines and would place more responsibility for that safety on restaurant managers. Under the legislation (HB 4956 and SB 595), all restaurants and other facilities selling prepared food would have to have a manager certified in food safety on duty. That person would be responsible for not only ensuring that proper sanitation rules were followed but also that ill employees were not handling food. Under the new standards, any employee who has been vomiting or had diarrhea could not return to work for 24 hours after symptoms ended, 48 hours if the illness is diagnosed as norovirus.
DOC and DCH Budgets Pass the House-
DOC (HB 4348) is $2.12 billion ($2 billion in general funds) as reported out of the House. That is a 9 percent (9.4 percent general fund), or $174.8 million above current year appropriations and is $79.7 million ($66.9 million general fund) above the governor's budget. One of the major changes to the Corrections budget is that it cuts in half the amount of savings the governor had budgeted for changes to the sentencing guidelines, which have not been put into bill form. The executive recommendation had $122 million in cost reductions, of which $19.9 million would go to field operation investment and $10.1 million would be used for community and local programs. The House committee version instead expects a $46 million net savings and uses the $10.1 million for community corrections comprehensive plans and services. The House version also spends $1.25 million on a legislative Corrections ombudsman, $500,000 on a sentencing guidelines commission, $1.9 million on pilot mental health treatment courts, $1.3 million for parolee drug treatment courts and $300,000 for a study of the prevalence of mental health and substance abuse problems in the inmate population. It removes $1.3 million for Corrections' spending on Project Joshua. Both the House and Executive budgets include $28 million for 1,640 beds opening ahead of schedule. The department would also close Jackson complex's 8-block and re-open A and B units at Parnall (177 beds total) under the bill. The bill also concurs with the governor's recommendation to pay for training of 776 new corrections officers. The appropriations bill also calls for statewide rollout of the prisoner reentry program, at a cost of $43.7 million above current year spending. The governor's budget called for $20.6 million in added spending on the program for FY 07-08. Rep. Proos amended the bill adding boilerplate language that the department develops, implement and report on uniform standards for MPRI pilot sites. And where the governor reduced the county jail reimbursement program to a $100 placeholder, the House allots $4.1 million on the program. It also creates a new local jail programs funded at $6.9 million (all restricted) through civil infraction fee revenues and telephone fee revenues. Statutory changes are needed to implement the program funding structure. The Corrections budget also contains boilerplate language requiring a cost-benefit analysis (that benefit has to be at least 10 percent cost savings) and legislative approval prior to the department privatizing services.
The DCH Budget (HB 4344)- Contains spending for Medicaid at $667 million above current year levels ($8.5 billion gross), of which $320.6 million is paid for through the general fund. It expands the MIChoice Program by $30 million ($12.6 million general fund), which is expected to make 2,000 to 3,000 more slots open for participation, as well as the Healthy Kids Dental program at a cost of $16.4 million ($6.9 million general fund). The appropriations bill also includes a 2 percent wage increase for community mental health direct care workers at a cost of $7.3 million ($3.7 million in general funds). Adult home help workers would receive a 10-cent per hour increase above the minimum wage at $7.40 at a cost of $2.8 million. It also contains $21.4 million for increased quality assurance assessment program.
EPA Demands Faster Dioxin Cleanup-The Department of Environmental Quality and Dow Chemical Company have been working for some time to develop a plan for cleaning up historic dioxin contamination along the Tittabawassee River and into Saginaw Bay but the U.S. Environmental Protection Agency said Wednesday that process was moving too slowly, particularly at three hot spots in the river. The federal agency ordered Dow to immediately begin cleanup on the spots along the first six miles of the river where contamination far exceeds federal safe exposure levels for the chemical. The order requires planning to begin immediately and cleanup to begin by August 15.
Minimum Wage Rate Increased- Sunday, July 1st, 2007, minimum wage increased to $7.15 an hour from the current $6.95. The law, enacted last year, increases it a year later to $7.40 an hour.
20 State Campgrounds Closed- Department of Natural Resources is closing 20 of its state forest campgrounds to absorb current-year budget cuts. The campgrounds slated for closure, in Alpena, Antrim, Cheboygan, Chippewa, Crawford, Luce, Marquette, Oscoda, Otsego, Schoolcraft, Grand Traverse and Wexford counties, were among the least used in the state officials said.
DCH Drug Website Expanded-Department of Community Health expanded the number of drugs listed on its website www.michigandrugprices.com. It now provides prices at various pharmacies for 150 of the most popular prescription drugs in the state. The site also allows residents to notify the department if the pricing on the site is wrong or to file complaints if they feel a pharmacy is gouging customers.