January 18, 2013
Karoub Associates: Government Affairs
ROAD FUNDING FACING A BUMPY RIDE?
Senate Appropriations Committee Chair Roger Kahn (R-Saginaw) who is the legislature's point person on road funding, says his goal is to have a $1 billion infrastructure package in place by March 7 so lawmakers can the place an alternative funding mechanism to repair the roads before voters on the May ballot.
Senator Kahn wants to place a one-penny sales tax hike earmarked for roads on the statewide ballot. If the voters were to adopt that, then the proposed, and potentially approved registration and gas tax increase put forth by Gov. Rick Snyder to raise $1.2 billion would go away.
The approach is similar to the Proposal A-type strategy used by former Gov. John Engler to sell property tax relief back in the 1990s.
However, Senator Kahn acknowledged that the in-will left over from the raucous Right to Work needs to be resolved with Democrats, and soon, if his self-imposed March 7 deadline is to be met.
And right now an is not well with the Democrats and even some Republicans on the transportation infrastructure issues.
House Minority Leader Tim Greimel (D-Auburn Hills) believes some funding can be found within the state budget. He also suggested corporations pay a higher rate and higher vehicle registration fees for more expensive cars.
Senate Minority Leader Gretchen Whitmer (D-East Lansing) would only go so far as to say the issue deserves "a fun and fair debate."
On the Republican side, Rep. Pete Lund (R-Shelby Twp.) said he doesn't see himself voting for it if the extra revenue simply comes from a gas tax increase.
Rep. Joe Hune (R-Hamburg) said his preference is to find the money within the budget.
CREC: TOUGH '14 BUDGET OUTLOOK
The Consensus Revenue Estimating Conference (CREC) is projecting a small surplus of around $125 million in the state's General Fund (GF) for the FY 2014 budget but a flat School Aid Fund (SAP).
However, that forecast could change depending on whether the federal government unloads some of it deficit on the states and the courts reject the state's new teacher retirement changes.
What this means is that Gov. Rick Snyder is likely to present a bare-bones budget to the Legislature when he make his recommendations on Feb. 7. The slim surplus is a result ofa $200 million surplus for the close of FY 2012 with department lapses of some $90 million, according to Budget Director John Nixon.
Economists at the University of Michigan's Research Seminar in Quantitative Economics (RSQE) predicted the state's unemployment rate would drop to 6.9 percent by the end of2015 with the rate forecasted to be 8.3 percent by the end 2013. Currently, the unemployment rate stands at 8.9 percent.
HATHAWAY TO LEAVE HIGH COURT
The attorney for Michigan Supreme Court Justice Diane Hathaway has informed the high court she will step down Jan.21.
The announcement came on the heels of a 19-page six-count complaint filed by the Judicial Tenure Commission (JTC) against Justice Hathaway and who is accused, along with her husband, of transferring a pair of homes to their children in a manner that would allow the couple to qualify for a short-sale on a Grosse Pointe property to save some $600,000 and then gifted the properties back to them by their children.
The complaint alleges fraud, money laundering, tax violations and misrepresenting facts to the JTC.
Hathaway's departure will give Gov. Rick Snyder an appointment to the Michigan Supreme Court and likely raise the GOP-nominated majority on the court to 5-2 from the current 4-3.
JUDGE RULES ON MCCA
Ingham County Circuit Court Judge Clinton Canady III has ruled that Michigan residents have "a right to know" how the Michigan Catastrophic Claims Association (MCCA) comes up with the mandatory fee it puts on an car insurance bills. The fee is currently $175 a year per vehicle.
In his order, Canady ruled the information that should be disclosed includes the amount of money in MCCA reserves, the number of claimants, administrative costs and specific accounting for increases and decreases in annual rate charges.
Under the state's no-fault auto insurance system, MCCA reimburses insurers for losses over $500,000 in situations where individuals have been seriously injured in accidents.
DOMESTIC PARTNER BENEFITS POLICY UPHELD
The Michigan Civil Service Commission's (MCSC) 2011 decision to extend health benefits to some eligible, unrelated co-residents of state employees, including same-sex partners has been ruled constitutional by the Court of Appeals (COA).
In a 2-1 ruling, the COA wrote, "There is no absolute prohibition against same-sex domestic partners receiving benefits through their relationship with an employee so long as that receipt is not based on the employer's recognition of that relationship as a 'marriage or similar union.;'"
Attorney General Bill Schuette says he win appeal the ruling.
WHITMER FOR GOVERNOR?
Senate Minority Leader Gretchen Whitmer (D-East Lansing) says she will make a decision on whether she will run for governor in 2014 by this April ... a more narrow timeline that the one she gave last month when she pledged a decision within the first half of 2013.
HILLEGONDS TO CHAIR NEW REGIONAL TRANSIT AUTHORITY
Former House Speaker Paul Hillegonds has been tapped by Gov. Rick Snyder to chair the newly established Regional Transit Authority. The authority was established last year to coordinate bus lines in metro Detroit.
HORSE RACING BILL DOESN'T FINISH
Gov. Rick Snyder pocket-vetoed House Bill 5546 which would have allowed gambling on previously recorded races citing possible violation of at least one tribal compact and questioning whether the legislation was constitutional under Prop. 1 of 2004 which requires a local and statewide vote in communities interested in expanded gambling.
SNYDER SETS SPECIAL ELECTION DATE
May 7 is the date set for a special election to replace former Sen. John Gleason (D-Flushing) who has accepted a position as Genesee County Clerk.
A primary election would be held March 12 if necessary.
AG COMMISSION ELECTS NEW CHAIRMAN.
Bob Kennedy, vice president of operations and general manager of Auburn Bean and Grain Company in Auburn, has been elected chair of the Commission on Agriculture and Rural Development. He replaces Valmar Green whose appointment expired earlier this month. Kennedy has been on the commission since January 2011.
Gov. Rick Snyder appointed Fred Walcott of Allendale to replace Green on the commission.