KAROUB ASSOCIATES

Legislative Consultants: Government Affairs

September 18, 2012

CITIZENSHIP ISSUE FILED IN FEDERAL COURT
A federal lawsuit has been filed against Secretary of State Ruth Johnson in an effort to remove the U.S. citizenship question from documents voters must sign before they vote in November.

The suit is being brought by Ingham County Clerk Mike Bryanton, the ACLU and the Service Employees International Union (SEIU).

The plaintiffs allege Johnson already has an “equal protection” constitutional problem in that the check-off has been excluded from some absentee ballots while being included in others.

Bureau of Elections Director Chris Thomas says the citizenship box was created around 2002 to assist voters in properly filling out the new optical scan ballots.

Although federal law requires the SOS offices to ask people if they want to register to vote when they apply for a driver’s license or ID card, the Department wasn’t allowed to collect citizenship information. Thus clerks had no way of knowing whether applicants were a citizen or not.

GOVERNOR SNYDER: TRANFORM BCBSM
Under a proposal put forth by Governor Rick Snyder Blue Cross Blue Shield of Michigan (BCBSM) – the state’s largest health insurer – would be transformed into a nonprofit mutual insurance company owned by policyholders and regulated under the same code that governs the state’s other health insurers.

As a result BCBSM would pay an estimated $100 million in tax revenue and be required to contribute about $1.5 billion over 18 years to a nonprofit organization to fund initiatives to improve health in Michigan. In return, BCBSM would get a quicker review of its rate requests which currently take up to 18 months to decide.

The reforms, which Governor Snyder hopes will take place in the near future, need the approval of both the Legislature and the Blue Cross Board of Directors.

GOVERNOR SNYDER MOVING FORWARD ON HEALTH EXCHANGE
After the House failed to move legislation that would clear the way for a state-run health exchange, Governor Rick Snyder’s administration is taking steps to work with the federal government on a federal health care exchange despite rumblings among lawmakers and stakeholders to revisit the issue.

Under the federal Affordable Care Act states must implement a health insurance exchange by Jan. 1, 2014 or the federal government will step in and run one. Michigan has a January 1, 2013 federal deadline it must meet in order to show the feds that it will have this new web site in place by January 1, 2014.

The Senate passed legislation (SB 0693) last November that would create the MiHealth Marketplace, a nonprofit entity that would establish a clearinghouse for health plans to submit their products for those who don’t get health insurance through their employer.

LEGISLATION WOULD BLOCK MEDICAID EXPANSION
Legislation (SB 1245) has been introduced that would block Michigan from expanding Medicaid as a provision of the federal Affordable Care Act (ACA).

Under the federal health care law, better known as Obamacare, Medicaid is to be extended to those at 133 percent of the federal poverty level as a way to cover more uninsured. However, a U.S. Supreme Court ruling holds that states could opt out of the Medicaid expansion.

SENATE FORMS NEW TRANSPORTATION FUNDING GROUP
The Senate has formed a new transportation funding group that, according to Senate Majority Leader Randy Richardville (R-Monroe) is planning to hold hearings in September. Senator Richardville has named Senate Appropriations Committee Chair Roger Kahn (R-Saginaw) as chair of this work group.

Other members include Senator John Pappageorge (R-Troy), Senator Tom Casperson (R-Escanaba), Senator John Moolenaar (R-Midland) and Senator Rebekah Warren (D-Ann Arbor).

NO GAS VOTE IN LAME DUCK
Senator Roger Kahn (R-Saginaw), chair of the newly created committee, says based on what the leadership has told him, he is not to consider the “funding” issue as the panel begins its work.

Some industry sources say the votes are there in both the House and Senate to move a gas tax hike. They are counting on a majority of the Senate Democrats to endorse more revenue and enough Senate GOPers to get to the needed 20 votes.

NO ACTION ON NO-FAULT
Because “there is not enough Senate support for something to happen,” Senate Appropriations Committee Chair Roger Kahn (R-Saginaw) indicates action on revamping the state’s no-fault car insurance, which has been in limbo in the House for months, is dead in the Senate.

But Senator Kahn did say that “some variations may happen” if and when the issue is addressed in the Lame Duck session. Senator Kahn wants to eliminate the option to purchase auto insurance for one week saying the only reason to purchase a one-week policy is to get proof of insurance to purchase a license plate and then not have the cost of a full-year policy to pay.

LIGHTS GO DIM ON DETROIT LIGHTING
An effort to establish a Detroit Lighting Authority has been declared dead by Senate Majority Leader Randy Richardville (R-Monroe).

His declaration came after Senate Democrats attempted to push floor action on legislation – a move that resulted in the three-bill package being shipped back to Senator Richardville’s Government Operations Committee, the committee where many bills go to die.

But Senator Richardville did leave the door open just a crack. “If they [Democrats] want to show an alternative plan and come with 20 votes to get it done, I’d be supportive,” he said.

CON PROCESS TO BE REVAMPED?
Legislation (SB 1269) has been introduced by Senator Mike Kowall (R-White Lake) that would revamp Michigan’s Certificate of Need (CON) process.

The move follows on the heels of McLaren Hospital’s desire to build a new facility in Clarkston and move 200 beds from its Pontiac facility.

The measure would allow a development of a new hospital by allowing an existing hospital to relocate hospital beds to a freestanding surgical center site under specific circumstances, provided construction commences within one year.

The legislation as currently written would apply to both Wayne and Oakland counties. However, the Detroit Medical Center (DMC) wants the legislation limited to Oakland County.

Thus far, the Senate GOP leadership appears to be undecided on the legislation’s fate on the floor.

SUPREME COURT RULES AGAINST CASINO PROPOSAL
After hearing oral arguments surrounding four contested ballot proposals, the Michigan Supreme Court (MSC) ruled that only one – a proposal to allow eight new private casinos – will not be on the November general election ballot.

The court said the casino proposal was fatally flawed because it failed to include wording on the ballot petitions about how the guaranteed liquor licenses the casinos would have been granted altered the powers of the Michigan Liquor Control Commission.

The high court wrapped up the statewide ballot proposal issues by allowing the collective bargaining, a public vote on an international bridge and a two-thirds legislative vote on any tax increase to go before the voters on November 6.

So with the casino proposal having lost the roll of the dice, voters will have to decide on six ballot proposals when they go to the polls in November. Here is how they will line up on the ballot. The referendum on the state’s Emergency Manager (EM) law will be Proposal 1. Proposal 2 will be the union-led collective bargaining initiative.

The renewable energy ballot proposal will be Proposal 3, home health care will be Proposal 4, the two-third legislative support for a tax increase is Proposal 5 and last but not least, Proposal 6 is the international bridge.

COURT BLOCKS PORTION OF MPSERS LAW
Less than three hours after Governor Rick Snyder signed the Michigan Public School Employees Retirement System (MPSERS) bill (SB1040) into law (P.A. 300 of 2012), Ingham County Circuit Court Judge Rosemarie Aquilina issued a restraining order on the 52-day window that school employees were given to make a decision on whether they want to keep their current pension system, continue paying 3 percent for their pension, or move to a 401(k)-style defined contribution plan. Judge Aquilina also pledged a full hearing on its constitutionality later this fall.

Judge Aquilina said the 52-day time period was too short for employees to make a decision. However, she did not offer a replacement date by which the choices would need to be made. November 28 was the date set to hear arguments about the constitutionality of the law in general.

The court order is at least a temporary victory for the American Federation of Teachers (AFT) in Michigan and the Michigan Education Association (MEA) who filed the lawsuit.

Look for the state to appeal.

THREE PERCENT WITHHOLDING ORDER TO BE APPEALED
A recent appeals court ruling that declared unconstitutional a 3 percent pay deduction from school employees pay to post-retirement health care will be appealed to the Michigan Supreme Court.

The Michigan Court of Appeals in an August ruling said the 2010 law that cut the 3 percent from the pay of school employees is a violation of state and federal laws.

If upheld, the decision would result in refunds of about $508 million now being held in an escrow fund.

The new law is expected to cut $15 billion from the MPSERS $45 billion in unfunded liabilities and is expected to save local school districts about $970 million over the next two years.

GOVERNOR SNYDER OFF TO CHINA
Governor Rick Snyder is on a trip to China for an investment mission that will not have him returning until the end of September.

Governor Snyder, along with a nine-member delegation, will visit five key cities: Shanghai, Hangzhou, Wuhan, Guiyang and Chendu, in an effort to develop and enhance business and trade relationships to help Michigan companies find new or expand markets as well as attract new job creating opportunities here.

PARTIES PICK SUPREME COURT CANDIDATES
Delegates to the Michigan State Republican and Democrat conventions have picked their candidates for the Michigan Supreme Court in the November election.

On the Republican side, Oakland County Judge Colleen O’Brien will join Justice Stephen Markman for a full six-year term on the bench. Justice Brian Zahra will run for the partial two-year term. He was appointed to by Governor Rick Snyder in January 2011 to succeed Maura Corrigan who stepped down to become director of the Department of Human Services.

On the Democratic side, Southfield Judge Sheila Johnson was nominated to run against Justice Zahra. University of Michigan professor Bridget McCormack and Wayne County Judge Connie slots against Markman and O’Brien.

EMT PROGRAM

Public Acts 63 and
152 Appropriations Bill Update

The Michigan Legislature has an annual Appropriations Bill that is necessary on an annual basis to run the government. In 2011 the Appropriations Bill was called Public Act 63, which is actually a series of appropriations bills, and it affects every branch of government because all expenses are budgeted within this Act.

The revenue sharing portion of the Bill sets the guidelines for the Economic Vitality Improvement Program (EVIP) and contains three categories important to all public employees:

Category 1 - requires transparency in local government. Examples of compliance includes public viewing of Collective Bargaining Agreements, Notice of Public Meetings, How to contact public officials, etc.;
Category 2 - requires plans for the, sharing of services, Cooperation with other governmental entities, etc.;
Category 3 - which required a sunset provision for pension and health care, is renewed annually for each fiscal year.

The good news for public employees is that the language offensive to public employees in Category 3 has been eliminated from the latest appropriations law, Public Act 107 for the current state fiscal year 2012. PA 152 only applies to active employees, but employers are attempting to change it to make it applicable to retirees also. This includes premium sharing for health care.

MAP is constantly on the alert to keep up with the efforts of legislators in Lansing to reduce employees and retirees benefits and we are doing our best to protect the rights of public employees in Michigan.