PAA Online

Legislature Passes Funding to Highland Park Students-Not Schools

2012-02-24T10:43:00.005-05:00

Following the removal of Emergency Manager Jack Martin due to the pending court case and the prior court’s decision that the meetings of the financial review team were subject to the Open Meetings Act, Highland Park Schools was left with the choice of closing or taking a payless payday on Friday.

Late Thursday afternoon, the House of Representatives and the Senate moved a measure, House Bill 4445, to provide $4 million dollars in funding; however, the funding will not go to the school district. House Speaker Jase Bolger (R-Marshall) and Senate Majority Leader Randy Richardville (R-Monroe), along with other Republican thought-leaders, made it clear that they had no intention of providing more funding to a mismanaged school district. Instead, the money is being appropriated (the Governor is expected to sign the bill Friday) in order to award $4,000 per student to a school district that accepts a transferred student from the failing district.

The measure passed the House of Representatives 63-44 with only Democratic Representative Richard LeBlanc (D-Westland) voting “yes” with all the Republicans. The Senate vote was also nearly along party lines with four Republicans voting “no” – Senators Jack Brandenburg (R-Hamburg Township), Tom Casperson (R-Escanaba), Dave Robertson (R-Grand Blanc), and Tory Rocca (R-Sterling Heights), and two Democrats voting “yes” – Senators Glenn Anderson (D-Westland) and Steve Bieda (D-Warren).

Emergency Manager Jack Martin cannot be reinstated until next Thursday as the Highland Park School Board decided late Thursday not to appeal the second financial emergency declaration.

Michigan Primary Continues to Heat Up

2012-02-24T10:43:00.002-05:00

Next Tuesday’s Republican Presidential Primary in Michigan continues to catch national attention as the campaigns for the two leading top candidates, former Massachusetts Governor Mitt Romney and former Pennsylvania Senator Rick Santorum, continue spending millions in an onslaught of advertising estimated to be costing both camps $6.6 million to date.

Multiple polls are released daily and have shown a trend of Mr. Romney closing the gap in the lead that Mr. Santorum had developed in Michigan. However, Mr. Santorum still leads most polling by as much as 5 percent.

Both candidates are expected to spend considerable time in Michigan in coming days. While Mr. Santorum’s plans were not available, he is reportedly returning to the state Friday. Mr. Romney returned Thursday evening for an event in Milford and will speak to the Detroit Economic Club on Friday.

National pundits have handed Mr. Romney the baton of victory for this week’s debate in Arizona as Mr. Santorum found himself defending his Congressional voting record for significant minutes. The results of the debate may play a role in making Tuesday’s primary vote close.

House Panel Begins Medical Marijuana Hearings

2012-02-24T10:41:00.004-05:00

The House Judiciary Committee began hearings this week on four bills introduced last year to add clarity to Michigan’s 2008 medical marijuana law. The substitute measures contain some of the provisions of other bills introduced at the same time; however, according to the panel’s Chair, Representative John Walsh (R-Livonia), the Committee will not yet be addressing the dispensary issue.

House Bill 4834, 4851, 4853, and 4856 are being addressed by the Committee.

Committee members took testimony this week from a representative of the Prosecuting Attorneys Association of Michigan regarding the 2008 law, the history of its enactment and a description of current litigation involving the statute. The panel is expected to take testimony from interest groups next week and public testimony the following week.

Representative Philip Cavanaugh (D-Redford Township) and Representative Ken Horn (R-Frankenmuth) presented their recommendations for change as co-chairs of a bipartisan workgroup. Any changes face an uphill fight as legislation will require a three-quarters majority as it will be amending law enacted by the voters.

There are currently more than 130,000 individuals registered to receive medical marijuana in the state.

House Changes Tune, Passes Appellate Court Judge Elimination

2012-02-24T10:41:00.000-05:00

Senate Agrees and Moves Measure to Governor’s Desk

The new boundaries for the state’s Court of Appeals districts are now complete as the Legislature finalized Senate Bill 849 this week. The measure also reduces the number of judges from 28 to 24, a move long-supported by Governor Snyder and finally agreed to by the Legislature.

The House of Representatives, which opposed the judge reduction plan in 2011, passed the legislation without debate and by unanimous vote on Tuesday. The Senate then gave the bill final approval on Wednesday 37-1, sending the measure to the Governor’s desk for anticipated signature. Senator Tonya Schuitmaker (R-Lawton) was the only “no” vote on the legislation.

The Legislature was operating under time constraints as incumbent judges have until March 26^th to file for re-election.

Paadvisory Briefs

2012-02-24T10:40:00.002-05:00

Legislative “Polar Plunge” Raises $20K

Approximately 30 members of the Michigan House and Senate, as well as Lt. Governor Brian Calley, took the “Polar Plunge” on the Capitol Lawn Thursday afternoon. The office-holders jumped into an above-ground pool filled with cold water to raise money for Michigan Special Olympics.

Bills Providing for Road Commission Dissolution Signed

House Bills 5125 and 5126 are now Public Acts 14 and 15 of 2012, respectively, as Michigan Governor Rick Snyder put his pen to the two measures that provide for dissolution of county road commissions under certain circumstances. Michigan is reportedly the only state with road commissions, and has 81.

ARC Recommends Significant Regulatory Reduction

The State Office of Regulatory Reinvention announced this week that it has provided its recommendations to Governor Snyder with regard to reform of Michigan’s environmental regulations. The recommendations, stemming from the review conducted by an Advisory Rules Committee, reportedly contains the recommended rescission of 330 Department of Environmental Quality (DEQ) regulations.

Lindberg Introduces Gift/Meal Restriction Bill

State Representative Steve Lindberg (D-Marquette) introduced legislation this week to prohibit legislators and other public office-holders, and the staff of public office-holders, from accepting gifts of any monetary value from lobbyists – including food and beverage. House Bill 5255 was referred to the House Government Operations Committee and, if passed, would result in a dramatic weight loss in both legislative chambers.

Tax Foundation Bumps State’s Corporate Tax Ranking

The Tax Foundation, a Washington, DC-based nonprofit tax research group, conducted a hypothetical new ranking of Michigan’s tax and overall business climate due to the new state tax structure effective January 1^st. Governor Snyder announced Michigan’s jump from 49^th to 7^th in corporate tax ranking and from 18^th to 12^th in overall business climate ranking.

Rep. Byrum Seeking Post as County Clerk

State Representative Barb Byrum (D-Onondaga) officially announced her intention to run for Ingham County Clerk in the August 7^th primary. The soon-to-be term-limited legislator will be attempting to replace retiring County Clerk Mike Bryanton.

Snyder Endorses Romney- Santorum Still Leads in Polls

2012-02-17T09:56:00.004-05:00

Michigan Governor Rick Snyder lent his name in endorsement of the Presidential campaign of former Massachusetts Governor and native Michigander Mitt Romney. The Governor made it official with an op-ed in The Detroit News and through a Thursday appearance with Romney in metro-Detroit.

Governor Romney made his way across Michigan Wednesday, including a rally in Grand Rapids, an interview on WJR, and meetings with the Farmington and Livonia Chambers of Commerce. Former Pennsylvania Senator Rick Santorum, meanwhile, spoke to the Detroit Economic Club and appeared at the Oakland County Republican Party’s Lincoln Day dinner.

Governor Romney and his superPAC have spent a reported $3.2 million on ad buys in Michigan, compared to the $1.1 million spent by Mr. Santorum and his superPAC. With less than two weeks until Michigan’s February 28^th GOP primary, Mr. Santorum is leading Michigan in all polling by 9-10 points over Mr. Romney.

Judge Rules on Financial Review Teams

2012-02-17T09:56:00.001-05:00

Ingham County Circuit Court Judge William Collette ruled last week that the financial review teams operating under Public Act 4 of 2011 (the “Emergency Manager Act”) and looking into the finances of Highland Park Schools and the City of Detroit were doing so in violation of the Open Meetings Act. This week, Judge Collette ruled that, because of the violation of the Open Meetings Act, the work done by both review teams is invalidated.

While the State discusses potential appeal with attorneys, the Detroit review team is continuing their work in compliance with the Open Meetings Act, according to the Department of Treasury. The situation in Highland Park; however, is more complicated as an emergency manager has already been named.

Plaintiffs in the case claim that Judge Collette’s ruling invalidates the appointment of emergency manager Jack Martin as this was recommended by the review team, which was operating in violation of the law. The State, however, disagrees and foresees Mr. Martin continuing to operate in his capacity as emergency manager.

New Oakland County Commission Maps Thrown-Out

2012-02-17T09:55:00.002-05:00

A new state law passed by the Legislature and signed by Governor Snyder in 2011 that shifted the power of redrawing county commission district boundaries in Oakland County was ruled unconstitutional by Ingham County Circuit Court Judge William Collette this week.

Prior to the law’s passage, county commission lines were drawn by an apportionment committee composed of the County Clerk, County Treasurer, County Prosecutor and the two chairs of the county’s political parties. For the first time in 2011, this committee had a Democratic majority and re-drew the lines, which were held up in court.

Public Act 280 of 2011 designated the County Board of Commissioners as the apportionment committee, giving the authority back to Republicans.

In Wednesday’s ruling, Judge Collette held that PA 280 violates the State’s Constitution, specifically the provisions prohibiting the state enacting local laws without a two-thirds majority vote in both the House of Representatives and the Senate.

The State is expected to appeal.

Calls Increasing for Ficano's Resignation

2012-02-17T09:54:00.003-05:00

In the wake of new indictments by the FBI against former Wayne County Chief Information Officer Tahir Kazmi, office holders are beginning to call for the resignation of Wayne County Executive Bob Ficano to eliminate distractions from governance. Federal agents have charged Kazmi with theft, extortion, and obstruction of justice and many observers expect more to come against other county officials.

Two members of the Wayne County Board of Commissioners, Republican Laura Cox and Democrat Bernard Parker, reportedly called for Ficano’s resignation Thursday, while both State Representative Phil Cavanaugh (D-Redford Township) and State Senator Tupac Hunter (D-Detroit) reportedly made comments alluding to the same.

Federal agents have been investigating for potential wrongdoing in Wayne County since former economic development officer Turkia Mullin was paid a $200,000 severance by the county when leaving for a position with the airport authority.

Prison Privatization Measures Moving Along

2012-02-17T09:54:00.000-05:00

Two pieces of legislation aimed at re-opening the Baldwin correctional facility under private ownership passed 2^nd reading in the House of Representatives Thursday. House Bill 5174 is sponsored by Representative Jon Bumstead (R-Newaygo) and House Bill 5177 is sponsored by Representative Joe Haveman (R-Holland). The facility would be permitted to re-open privately if it realizes a 10-percent savings.

State Representative Barb Byrum (D-Onondaga) was successful in winning an amendment to HB 5174 that creates a citizen advisory council to address any local concerns or complaints. House Appropriations Corrections Subcommittee Minority Vice Chair Representative Steve Lindberg (D-Marquette) was also successful in passing an amendment to HB 5174; his amendment proposes to require the facility to report to the Michigan Department of Corrections, the county board of commissioners, and the legislative body of any local unit of government where the facility is located.

The North Lake Facility for Youth in Baldwin was operated by the Wackenhut Corrections Corporation until 2005 and is now, under the name GEO Group, interested in again operating the facility.

Paadvisory Briefs

2012-02-17T09:53:00.002-05:00

UAW Endorses Peters

U.S. Representative Gary Peters (D-Bloomfield) received the endorsement of the United Auto Workers (UAW) in a huge victory for his campaign for the newly drawn 14^th Congressional District. Mr. Peters is in a competitive Democratic primary with U.S. Representative Hansen Clarke and Southfield Mayor Brenda Lawrence.

Governor Receives Legislation for Organ Donor License Plate

The State Senate passed two pieces of legislation Wednesday, paving the way for a new license plate that raises funds for Michigan’s organ donor registry: Senate Bill 534, sponsored by Senator John Gleason (D-Flushing) and House Bill 4978, sponsored by Representative Kevin Daley (R-Lum). The Senate also named the plate after Senator Gleason. The fund to collect the money, set up by HB 4978, is named for Rep. Daley’s late son, Thomas.

Officials to Take “Polar Plunge”

Looking for something to do on February 23^rd? Lt. Governor Brian Calley and an estimated 38 members of the Michigan Legislature will be taking the “polar plunge” in an above-ground pool on the Capitol lawn. All have committed to raise $500 for Michigan Special Olympics.

Governor, AG Oppose Lansing Casino

Michigan Governor Rick Snyder and Attorney General Bill Schuette sent a letter to Sault Ste. Marie Tribe of Chippewa Indians Chair Joseph Eitrem describing their opposition to the proposal for a tribal casino in Lansing. The tribe has announced a proposal in coordination with Lansing Mayor Virg Bernero that requires a land swap. The Governor and the AG described what they see as a lack of legal standing for the proposal and cautioned the Tribe to expect resistance from the state if the proposal is pursued.

Govenor Snyder Unveils Fy 2013 Budget Recommendations

2012-02-10T10:31:00.007-05:00

Michigan Governor Rick Snyder was joined Thursday by Lt. Governor Brian Calley and State Budget Director John Nixon in presenting the Administration’s recommendations for the FY 2013 budget before a joint meeting of the House and Senate Appropriations committees. The $48.2 billion total spending plan came with a considerably more positive, yet still restrained tone. The Governor’s recommendations, including 2014 projections, can be viewed in its entirety at http://www.paaonline.com/resources.php
As with last year, the budget will be presented in two pieces of the legislation – one on education (K-12, community colleges and higher education) and one for the remaining State expenditures. The Governor stated that he hoped the budget would be completed along a timeline similar to the May completion of the current budget.

Highlights of the roughly 2.4 percent larger budget include:

· The use of $119 million in one-time General Fund money for roads in order to maximize Federal matching dollars – a total of $3.3 billion, or a 0.4 percent decrease from 2011 – 2012 FY.

· $195 million for economic gardening efforts within the Michigan Economic Development Corporation (MEDC), as well as $25 million for film incentives

· $50 million to the Department of Technology, Management & Budget, specifically to update the state’s oldest information and accounting systems

· $179 million for the public school employees’ retirement system

· $25 million for State buildings needing repair and renovation

· $130 million for the budget stabilization or “rainy day” fund

· $12.69 billion for School Aid, $12.5 billion of which is ongoing spending, representing a 2.5 percent increase over the current fiscal year

· A roughly 2.8 percent increase in higher education funding, from $1.36 billion in the current year to $1.39 billion in 2012-2013

PAAdvisory will analyze additional details of the Governor’s FY 2013 budget recommendations in coming editions.

Cyberschool Expansion Proposal Receives Cap

2012-02-10T10:31:00.005-05:00

As expected and reported in last week’s PAAdvisory, the House Education Committee reported Senate Bill 619 Wednesday on a nearly straight party-line vote; however, not before changing the face of the proposal. The Committee’s vote was 10-8 with only Representative Tom Hooker (R-Byron Center) voting “no” with the Democratic members.

The legislation, sponsored by Senator Patrick Colbeck (R-Canton), as originally introduced, proposed to remove the 1,000-pupil maximum enrollment at the two currently permitted Michigan cyberschools. The measure would also have removed the cap of two total cyberschools and expand the scope of the schools beyond only at-risk and urban populations.

The substitute provided to committee members late Tuesday night and voted out of the committee on Wednesday contains a cap of no more than 15 cyberschools through December 31, 2013, and no more than 30 thereafter.

The cap that was added for enrollment at the cyberschools is not to exceed half of the population of Michigan’s largest school district, which is currently the Detroit Public Schools and the roughly 66,000 students.

Road Commission Dissolution Measures Pass to Governor

2012-02-10T10:30:00.006-05:00

Two bills that allow counties to absorb the duties of and dissolve road commissions passed the House of Representatives Tuesday after failing to do so in December. The measures now move to the Governor for his expected signature.

House Bill 5125, sponsored by Representative Jon Switalski (D-Warren), and House Bill 5126, sponsored by Representative Dale Zorn (R-Ida), both passed on 63-41 votes with roughly 16 Republican members casting “no” votes and 17 Democratic members supporting the bills.

Democrats were united in their opposition to the same bills in December, fueling speculation that a deal had been struck; however, House Democratic Leader Rick Hammel (D-Mount Morris Township) stated that the Democrat’s opposition in December was the result of the Caucus’ understanding that the two bills were supposed to be part of a larger, bipartisan package. Now that the 30-bill bipartisan transportation package has been introduced, Rep. Hammel explained that his Caucus members were comfortable supporting the road commission dissolution measures.

In related news, the House Transportation Committee held a hearing Wednesday on House Bills 5301, 5302 and 5313 – three of the 30 bills in the bipartisan transportation package recently introduced. The three bills propose to require road agencies and road commissions to develop and maintain dashboards, review and adjust signal device timing every five years, certify to the Department of Transportation that they are compliant with the required 80/20 split on health insurance and put all new employees on defined contribution retirement programs.

Senate Committee Delays Vote on Community College Proposal

2012-02-10T10:30:00.005-05:00

Shortly before the Senate Education Committee was scheduled to meet and vote on House Bill 4496 Wednesday, Committee Chair Senator Phil Pavlov cancelled the vote. The legislation would permit community colleges to offer four-year or baccalaureate degrees in five specific areas of study.

Despite the vocal objection from the state’s universities, the Chair had originally indicated he was comfortable with moving forward on the measure. Questions have recently arisen, reportedly from members of both parties, with regard to the constitutionality of the measure.

Opponents are arguing that the function of a community college will change, as will their governing, under the proposed law – potentially questioning their existing funding structures. Senator Pavlov expects the vote to be rescheduled for next week.

Michigan Joins Foreclosure Settlement

2012-02-10T10:29:00.004-05:00

Michigan Attorney General Bill Schuette announced Tuesday that Michigan had joined a settlement against five of the United State’s largest financial institutions for $19 billion to assist homeowners affected by foreclosure proceedings. At least 40 other states are also part of the settlement.

By joining the case against Ally Financial, Bank of America, Citigroup, JP Morgan Chase and Wells Fargo, the State stands to see nearly $500 million. Notably, the Attorney General stated that by entering the settlement, Michigan is not waiving rights to potentially file criminal charges and seek associated penalties against the banks.

In addition to the cash payments the banks will send to those who went through foreclosure from 2008 – 2011, the banks will also provide homeowners who are current with their mortgages, but owe more than their current home values, with a program for refinancing.

PAAdvisory Briefs

2012-02-10T10:29:00.003-05:00

Dual Enrollment Package Clears House Panel

A package of bills providing high school students more opportunities to take courses at community colleges and universities while qualifying for high school credit passed the House Education Committee. The package includes Senate Bill 621, 622, 623, 709 and 710.

County Commission Appointment Bill Debated

The House Redistricting & Elections Committee took testimony on Tuesday regarding House Bill 4357, sponsored by Representative Eileen Kowall (R-White Lake Township). The measure would allow county commissions to fill vacancies through appointment during odd-numbered years rather than hold special elections. An identical bill, Senate Bill 204, was approved in the Senate in January.

Judge Rules on Financial Review Team Meetings

Ingham County Circuit Court Judge William Collette ruled this week that financial review teams appointed under Public Act 4 are considered public bodies and therefore must adhere to the Open Meetings Act. The Judge ordered the review team in Detroit to meet in the open. The Department of Treasury is reportedly considering appeal options.

Bishop Launches Prosecutor Bid

Former State Senate Majority Leader Mike Bishop launched his campaign for Oakland County Prosecutor at a non-fundraising dinner Tuesday night. The event was attended by more than 300 people, including former Bishop rival Michigan Attorney General Bill Schuette and Michigan Republican Party Chair Bobby Schostak.

CONTROVERSIAL UNION REFORM MEASURES MOVE TO HOUSE FLOOR

2012-02-03T09:55:00.000-05:00

The House Oversight and Reform Committee moved a package of bills to the House floor Tuesday in a union member-packed hearing room. The package, House Bill 5023, HB 5024, HB 5025 and HB 5026 were introduced in September 2011.

The hearing was contentious, as previous meetings on the legislative package have been, with Committee Chair Representative Tom McMillin (R-Rochester) originally planning not to permit questions of those who testified. Ultimately, the Chair permitted questioning.

HB 5023 imposes a fine on public employees and their bargaining representatives for illegally striking. The employees would be fined a day’s pay for each day striking, while the bargaining representatives would be fined $5,000 per day. The measure is sponsored by Representative Lisa Posthumus Lyons (R-Alto).

HB 5024 prohibits the picketing of a private residence and provides that picketing cannot block the entrance to a place of business or a roadway. The measure is sponsored by Representative McMillin.

HB 5025 would require employees to provide written consent for union dues to be deducted from wages by employers. The measure is sponsored by Representative Earl Poleski (R-Jackson).

HB 5026 would eliminate the requirement that an employer include language in an advertisement that jobs being advertised are to replace workers involved in a labor dispute. The measure is sponsored by Representative Amanda Price (R-Park Township).

All four of the measures passed the Committee on party-line votes of 4 yeas to 2 nays.

VOTE EXPECTED ON CYBERSCHOOL EXPANSION

2012-02-03T09:54:00.005-05:00

House Education Committee Chairman Representative Tom McMillin (R-Rochester) has indicated that he believes the committee will be ready next week to vote on Senate Bill 619, legislation to lift the current cap on cyber schools. The Committee has deliberated on the legislation for weeks, including two hours of testimony this week.

The legislation, sponsored by Senator Patrick Colbeck (R-Canton), removes the 1,000-pupil maximum enrollment at the currently two permitted Michigan cyber schools. Additionally, the measure would remove the cap of two total cyber schools and expand the scope of the schools beyond only at-risk and urban populations. They originally made the move as a portion of the 2009 application for Federal “Race to the Top” funding.

HOUSE DEMS RELEASE ETHICS AND CAMPAIGN REFORM PACKAGE

2012-02-03T09:54:00.002-05:00

Members of the House Democratic Caucus introduced a package of reforms this week, including 16 bills and one Constitutional amendment. The measures, aimed at Michigan’s ethics and campaign finance laws, were part of a Caucus press conference Thursday.

Some of the measures are familiar reforms that have been previously introduced and passed in the House of Representatives, such as a required two year “cooling-off” period before an office holder can become a lobbyist once they leave office. The larger portion of the package has raised Republicans’ eyebrows as half of the bills create tougher regulations on corporations.

House Democratic Leader Rick Hammel (D-Mount Morris Township) stated that the Caucus agreed with what Governor Rick Snyder had called for in his State of the State address; however, after two weeks of inaction by Republicans, his Caucus decided to move forward.

The measure includes HJR NN, HB 4236, HB 4461, HB 5348, HB 5349, HB 5350, HB 5351, HB 5352, HB 5353, HB 5354, HB 5355, HB 5356, HB 5357, HB 5358, HB 5359, HB 5360, and HB 5361.

CITY OF DETROIT MAKES PROGRESS WITH UNION NEGOTIATIONS

2012-02-03T09:53:00.002-05:00

State Treasurer Andy Dillon had provided the City of Detroit until early February to develop a plan to avoid a cash shortage expected in April following the completion of the financial review by the State – and today the City of Detroit took a perceived step in the right direction by announcing that an agreement has been reached with the union representing the largest portion of non-uniform city employees.

In a joint statement released by Detroit Mayor Dave Bing and American Federation of State, County and Municipal Employees (AFSCME) Council 25 representative, the two sides called the negotiations “challenging,” as observers noted the progress.

Details of the agreement were not publicly released and must still be ratified by union members. Some sources have reported the agreement includes 10-percent pay reductions, elimination of overtime, and a move to a defined contribution retirement system for new hires.

MUSKEGON HEIGHTS SCHOOL DISTRICT TO RECEIVE FINANCIAL REVIEW

2012-02-03T09:52:00.002-05:00

The Department of Treasury has announced that a financial review team had been appointed to review the finances of the Muskegon Heights School District, the third review team appointed (Detroit Public Schools and the City of Inkster) over the last six months.

The Committee, which has 60 days to complete its review, includes:

Fredrick Headen, Director of the Department of Treasury Local Government Services Bureau
David Martell, Executive Director of the Michigan School Business Officials Association
Dale Nesbary, President of Muskegon Community College
Doug Ringler, Director of the Office of Internal Audit in the Department of Technology, Management & Budget
Tom Saxton, Deputy State Treasurer
Brom Stibitz, Senior Policy Adviser at the Department of Treasury
John VanWyck, retired Public Affairs Officer for GTE/Verizon
Carol Wolenberg, Deputy Superintendent in the Department of Education

The review team was appointed after the preliminary review showed evidence of financial distress, including a $8.5 million deficit.

PAADVISORY BRIEFS

2012-02-03T09:51:00.002-05:00

Mr. Snyder Goes to Washington

Michigan Governor Rick Snyder joined Connecticut Governor Dan Malloy in testifying before the U.S. House Education and Workforce Committee in Washington, DC this week. In addition to touting Michigan’s efforts in talent development and urging the Federal government to consider his proposal for green cards to foreign nationals who have obtained advanced degrees, Governor Snyder stated that the Federal government’s bailout of General Motors and Chrysler were the right move.

VerHeulen to Run in 74^th House District

Meijer Foundation General Counsel and Walker Mayor Rob VerHeulen has announced his intentions to run for the 74^th House seat. The Republican is running for a seat currently held by Representative Dave Agema (R-Grandville) who will be term limited at the end of this term.

Indiana Country’s First “Right-to-Work” State

Indiana Governor Mitch Daniels signed legislation this week making his state the first to pass the so-called “right-to-work” legislation. State Representative Mike Shirkey (R-Clarklake), one of the biggest proponents of similar reform in Michigan, stated that Indiana’s move makes it even more urgent that Michigan follow suit, given the now perceived advantage of a neighboring state.

Hoekstra Buys Superbowl Spot

Following in the footsteps that many think ultimately lead to now Governor Rick Snyder’s victory in the Republican Primary of 2010, former U.S. Representative and U.S. Senate candidate Peter Hoekstra has reportedly secured a television advertisement during the Superbowl. Mr. Hoekstra is currently favored to win the Republican Primary to challenge incumbent U.S. Senator Debbie Stabenow (D-Lansing).

Judge to Rule on Open Meetings Act Application to Financial Review Teams

Ingham County Circuit Court Judge William Collette met with attorneys this week regarding a suit filed to force a financial review teams appointed under Public Act 4 to adhere to the Open Meetings Act. The Court is expected to hold a show cause hearing and potentially rule next week.

Bipartisan, Bicameral Transportation Package Introduced

2012-01-27T10:51:00.003-05:00

A package of 30 bills was introduced into the House and Senate Thursday, calling for increased funding for Michigan roads and the creation of a regional transit system for Southeast Michigan. All the legislation was referred to the House and Senate Transportation Committees where both Chairs, Senator Tom Casperson (R-Escanaba) and Representative Paul Opsommer (R-DeWitt), respectively, have indicated the priority will be legislation related to the Southeast Michigan regional transit issue.

The legislation should begin receiving hearings before the Committees soon. A brief run-down of the package:

· SB 909, HB 5309: Establishes a regional transit authority for Southeast Michigan. Sponsored by Sen. Tom Casperson (R-Escanaba) and Rep. Jim Townsend (D-Royal Oak), respectively

· SB 910, HB 5312: Creates an optional county registration fee to benefit public transit. Sponsored by Sen. Rebekah Warren (D-Ann Arbor) and Rep. Douglas Geiss (D-Taylor), respectively

· SB 911, HB 5311: Creates optional registration fees for regional transit authority. Sponsored by Sen. Bert Johnson (D-Highland Park) and Rep. David Rutledge (D-Ypsilanti), respectively

· SB 912, HB 5310: Amends the Michigan Zoning Enabling Act to exempt Southeast Michigan regional transit authority public transit facilities from local zoning ordinances or regulations. Sponsored by Sen. Bert Johnson (D-Highland Park) and Rep. Jim Townsend (D-Royal Oak), respectively

· SB 913, HB 5302: Requires local road agencies to adopt best practices and asset management standards as a condition of receiving funds. Sponsored by Sen. Mike Kowall (R-White Lake Township) and Rep. Roy Schmidt (D-Grand Rapids), respectively

· SB 914, HB 5301: Modifies conditions to receive funding from the Michigan transportation fund. Sponsored by Sen. Mike Kowall (R-White Lake Township) and Rep. Amanda Price (R-Holland), respectively

· SB 915, HB 5306: Revises criteria for funding the comprehensive transportation fund and makes miscellaneous changes. Sponsored by Sen. Phil Pavlov (R-St. Clair) and Rep. Kevin Daley (R-Lum), respectively

· SB 916, HB 5307: Amends definition of public transportation corporations. Sponsored by Sen. Mike Kowall (R-White Lake Township) and Rep. Lesia Liss (D-Warren), respectively

· SB 917, HB 5308: Revises eligibility for funding from comprehensive transportation fund. Sponsors Sen. Mike Kowall (R-White Lake Township) and

Rep. Marilyn Lane

(D-Fraser), respectively

· SB 918, HB 5298: Implements a wholesale tax on fuel. Sponsored by Sen. Roger Kahn (R-Saginaw Township) and Rep. Rick Olson (R-York Township), respectively

· SB 919, HB 5300: Modifies vehicle registration fees. Sponsors Sen. Roger Kahn (R-Saginaw Township) and Rep. Jud Gilbert (R-Algonac), respectively

· SB 920, HB 5299: Eliminates the flat tax rate on fuel and establishes an 18-month limitation period for filing refund claims. Sponsored by Sen. Roger Kahn (R-Saginaw Township) and Rep. Rick Olson (R-York Township), respectively

· SB 921, HB 5304: Changes conditions for funding and creates sunset for meetings of complete streets advisory council if the State Transportation Commission adopts a complete streets policy. Sponsored by Sen. Mark Jansen (R-Gaines Township) and Rep. Mark Ouimet (R-Scio Township), respectively

· HB 5303: Creates commercial corridor fund and requires satisfaction of certain conditions for funding. Sponsored by Rep. Alberta Tinsley-Talabi (D-Detroit)

· HB 5305: Changes bidding requirements for contracts between State Transportation Commission, county road commissions, and cities or villages. Sponsored by Rep. Matt Lori (R-Constantine)

· HB 5313: Modifies conditions to receive funding from Michigan Transportation Fund. Sponsored by Rep. Bradford Jacobsen (R-Oxford)

· HB 5314: Allows dedication of lane for public transit. Sponsored by Rep. Rudy Hobbs (D-Lathrup Village)

State Income Tax Reduction Introduced

2012-01-27T10:50:00.005-05:00

Senate Finance Committee Chairman Jack Brandenburg (R-Harrison Township) introduced legislation this week to return Michigan’s individual income tax rate to 3.9 percent by 2017. Senate Bill 906 was referred to Sen. Brandenburg’s Committee where he has identified it as a priority. The measure received 10 Republican and 1 Democratic co-sponsor.

In 2007, the income tax rate was raised from 3.9 to 4.35 percent with a reduction schedule. During the widespread tax reform of 2011, the reduction schedule was altered to delay the roll-back to 4.25 until January of 2013, and then lock the rate there.

Under Senator Brandenburg’s bill, the rate would decrease to 4.1 percent in 2014, to 4.05 percent in 2015, to 3.95 percent in 2016 and finally to the pre-2007 rate of 3.9 percent in 2017. Estimates are that each 0.1 percent will generate $175 million in revenue.

Senate Majority Leader Randy Richardville (R-Monroe) has indicated his preference to see what the numbers look like at the May Consensus Revenue Estimating Conference before making decisions on the proposal.

Detroit Income Tax Revenue To Take Hit

2012-01-27T10:50:00.002-05:00

The good news is that things are beginning to show signs of improvement in the City of Detroit. The bad news is that these improvements have caused the City to fail in meeting three of the four criteria necessary to prevent a roll-back of the income tax rate.

Michigan’s City Income Tax Law was amended in 1998 to begin rolling-back Detroit’s tax rates; however, it also included a provision that allowed the roll-backs to be paused if the City meets at least three of four criteria:

· Unemployment rate of 10-percent or higher

· Withdrawal from “rainy day” fund for previous two years or a zero balance in the fund

· Income tax revenue growth rate of .95% or less

· Local tax base growth rate of 80 percent or less of the statewide tax base growth rate

According to a report released by the Citizens Research Council of Michigan (CRC), the City of Detroit has met the first two; however, it will not meet either of the last two. This will cause the City to reduce the income tax rate beginning at the start of the new fiscal year, July 1^st, potentially costing Detroit $8.5 million in revenue. The rate reductions will be from 2.5 to 2.4 percent for residents and from 1.25 to 1.2 percent for non-residents, unless state law is amended.

Schuette Rolls Out Public Safety Proposal

2012-01-27T10:49:00.000-05:00

Michigan Attorney General Bill Schuette took to the podium this week to lay out a proposal for increased public safety – more than a month ahead of the Governor’s expected special message on public safety. The Governor, Speaker of the House Jase Bolger (R-Marshall), and Senate Majority Leader Randy Richardville (R-Monroe) are reviewing the proposal.

The first of the two pillars of Mr. Schuette’s proposal calls for the use of $140 million of the budget surplus to hire 1,000 new police officers. This piece, however, was met with mixed responses from some members of the Legislature as they cautioned against the state going down the road of committing to expenditures that may not be able to be paid for in future years.

The other pillar of the proposal calls for an automatic 25-year prison sentence for an individual convicted of a fourth violent felony. The “VO-4” proposal allows for the first three felonies to be any combination of violent or non-violent; however, if the fourth is violent (examples include carjacking, kidnapping, armed robbery, manslaughter, criminal sexual conduct, etc.) the individual would receive a mandatory 25-year sentence.

Other portions of the Attorney General’s proposal include the enhancement of laws targeting human trafficking, child sexual abuse, and tougher sentencing for public officials convicted of taking bribes.

PAAdvisory Briefs

2012-01-27T10:45:00.002-05:00

Clover Adams Heads to DEQ

Jamie Clover Adams has taken a position as Director of Policy at the Michigan Department of Environmental Quality’s Quality of Life Group and will be leaving the Senate, where she currently serves as Senate Majority Leader Randy Richardville’s Deputy Chief of Staff. Ms. Adams has been on staff in the Michigan Senate since coming to the state from Kansas in 2003.

Carey to Serve as Interim Spokesperson

State Representative Jeff Irwin’s (D-Ann Arbor) Legislative Aide, Katie Carey, will serve as interim spokesperson for the House Democratic Caucus. Current press secretary Jessica Tramontana is on maternity leave following the birth of a healthy baby girl. Ms. Carey was formerly communications director for the Senate Democratic Caucus.

Waters Running in 14th

Former State Representative Mary Waters (D-Detroit) announced her intention to run for the U.S. House of Representatives in the 14^th Congressional District. The race already includes Democratic Congressmen Hansen Clarke (D-Detroit) and Gary Peters (D-Bloomfield Hills) facing off, as well as Southfield Mayor Brenda Lawrence.

Redistricting Maps Gain US DOJ Approval

Despite an ongoing lawsuit in the Eastern District of the U.S. District Court filed by the NAACP, the U.S. Department of Justice granted approval to the maps signed by Michigan Governor Rick Snyder in August. The federal Voting Rights Act requires the review.

State of the State 2012

2012-01-20T10:43:00.002-05:00

Michigan Governor Rick Snyder delivered his second State of the State address Wednesday evening before a joint session of the Michigan Legislature. The Governor’s 52-minute speech, delivered as it was in 2011 without prepared text, departed from that of some previous Governors’ addresses in that it provided significant commentary in the form of progress reports on those initiatives announced in 2011 and was brief in the area of new proposals.

The Governor stressed that 2012 was to be a year about completing the work that began in 2011, referencing specifics such as the New International Trade Crossing (NITC), insurance coverage for autism, the health insurance exchange, transportation funding reform, and regional transit in Southeast Michigan.

Among the few new announcements were the Governor’s plans to travel to Asia and Europe this year for trade missions, as well as a partnership with the Michigan Health and Hospital Association, Michigan Grocers Association and Gerber Food Inc. on the issue of childhood obesity called Pure Michigan Fit. The Governor also called on the Legislature to pass legislation to “lock-in” the Education Achievement Authority (EAA) into statute. The EAA was established to oversee the state’s poorest performing schools through an agreement with Eastern Michigan University and the Detroit Public Schools; however, the Governor’s advisors are reportedly concerned that the authority may not hold up in court without being established in statute.

In one of the more humorous moments, the Governor described the work of \reviewing and recommending elimination of unnecessary regulations. He used the example of the Department of Environmental Quality’s “28 separate requirements for outhouses, including one that the seat not be left up.” He reported that was not necessary at the Snyder home as he “reported to a higher authority.” The first Lady laughed at that line.

Addressing some of the Administration’s successes through measurements that are a part of the Governor’s “dashboard,” Mr. Snyder emphasized the reduction of Michigan’s unemployment rate to a 3-year low. An outline of Governor Snyder’s second State of the State address is available here, and at www.paaonline.com/resources

Revenue Estimates Conservative; Budget Supplemental Coming

2012-01-20T10:42:00.001-05:00

State Treasurer Andy Dillon, House Fiscal Agency Director Mary Ann Cleary and Senate Fiscal Agency Director Ellen Jeffries announced numbers late last week representing their agreement for upcoming revenue projections.

For the current fiscal year that ends September 30, 2012, projections for both the General Fund and School Aid Fund were increased from May 2011 estimates. The General Fund was increased $278 million due mostly to expected increases in income tax collections. The School Aid Fund projections were increased $138.3 million.

With regard to the 2012-13 fiscal year projections, the three fiscal officials estimated no increase in General Fund revenues, placing the number at $9 billion. The School Aid Fund is projected to see a small increase in revenue to $11 billion, approximately 2.7 percent higher. The $20 billion total estimate is about 1.5 percent higher than current fiscal year totals.

While the good news at the Revenue Estimating Conference was somewhat restrained, the State Budget Director indicated that the Administration will be preparing a supplemental in coming weeks to spend the $457 million remaining following the closing of the State’s 2010-2011 fiscal year last September 30.

Budget Director John Nixon, CPA, said that the Governor would be making the request as a portion of his February 9^th 2012-13 budget presentation and focusing on “key areas” such as Medicaid caseloads and state employee union contracts.

New Roads Funding Proposal Pending

2012-01-20T10:41:00.002-05:00

Although specifics were not included in his State of the State address Wednesday evening, Governor Rick Snyder did urge the Legislature to act on a new transportation funding proposal and referenced a $1.4 billion underinvestment in infrastructure.

The new proposal is reportedly expected to be introduced in coming weeks in the form of a 13-bill bipartisan legislative package that would call for an increase in the wholesale percentage gas tax as well as an increase in vehicle registration fees.

The Governor’s revenue-neutral 2011 transportation funding proposal saw little movement and considerable criticism by the Legislature and the public. The old plan called for a similar increase in the wholesale percentage gas tax, a larger increase in vehicle registration fees, and an elimination of the 19-cent per gallon gasoline and 15-cent per gallon diesel fuel taxes.

The new proposal is reported to raise an additional $1.4 billion for infrastructure funding.

Public Lake Access Bill Passes Senate

2012-01-20T10:40:00.002-05:00

Senate Bill 778 passed the Senate 30-6 Thursday, with no debate, moving one step closer to the conclusion of an issue bouncing around the Legislature for many years.

The legislation, sponsored by Senator Mike Kowall (R-White Lake), would prohibit the blocking of access to the water at a public road end, such as the overnight mooring of a boat. The bill would permit a local unit of government to install a dock. Property rights questions surrounding road-ends of public roads at lakes have resulted in confrontations according to the bill’s sponsor.

Senators Darwin Booher (R-Evart), Tom Casperson (R-Escanaba), Bruce Caswell (R-Hillsdale), Hoon-Yung Hopgood (D-Taylor), Rebekah Warren (D-Ann Arbor) and Coleman Young, Jr. (D-Detroit) voted in opposition of the measure.

PAADVISORY BRIEFS

2012-01-20T10:39:00.002-05:00

State Employees See Big Pay Day

More than $95 million in escrowed funds were returned to State of Michigan employees on Thursday in what amounted to a one-time significant pay increase. The 3-percent employee contribution to retirement was ruled unconstitutional after a year, so approximately 50,000 individuals received the refund. Employees had the option of having the amount deposited into their retirement accounts or included in their paycheck.

Governor Participates in Online Town Hall

Governor Rick Snyder answered approximately 25 questions submitted via social media outlets and other vehicles in an “online town hall meeting” as a follow-up to Wednesday’s State of the State address. Roughly 4,500 questions were submitted through the Governor’s website, Facebook, Twitter and other methods.

State Police Cruisers at Home?

During a hearing of the Senate Appropriations Subcommittee on State Police and Military and Veterans Affairs, a State Police Department official explained that the Department is in the early stages of considering allowing troopers to take their patrol cars home at night. Other states have reportedly seen better-maintained vehicles while it also serves to increase trooper visibility in communities.

Protestors Target Snyder Residence

Approximately 700 protestors spent part of Monday’s Martin Luther King, Jr. Day protesting Michigan’s Emergency Financial Manager Law (Public Act 4) outside of Governor Snyder’s neighborhood in Ann Arbor. Protestors were reportedly organized by the NAACP and By Any Means Necessary (BAMN) and were protesting the EFM statute largely because of their belief that it disproportionately affects minority communities.

Hendges Promoted

Jeremy Hendges, Legislative Director for House Speaker Jase Bolger (R-Marshall) since January of 2011, has been promoted to Legislative Director and Senior Strategy Coordinator. The Grand Valley State University alum and Traverse City native had previously served on the staffs of former House Republican Leader Kevin Elsenheimer, as well as former Senators Jason Allen and Alan Cropsey.

Hoogendyk Announces Candidacy

Former State Representative Jack Hoodendyk has formally announced his candidacy for the U.S. House of Representatives in the 6^th District. Congressman Fred Upton is the incumbent.

Kowall Ends Congressional Bid

State Senator Mike Kowall (R-White Lake) has suspended his bid for the 11^th District U.S. House of Representatives against incumbent Congressman Thaddeus McCotter (R-Livonia). Senator Kowall became a candidate for the U.S. House when Mr. McCotter decided to make a bid for the White House, an endeavor which has also been suspended.

Senate Dems Role-Out Free Tuition Plan

2012-01-13T10:18:00.003-05:00

The Michigan Senate Democratic Caucus unveiled a plan this week that would provide free tuition for Michigan students at public universities and community colleges. The “Michigan 2020 Plan: A Passport to Prosperity” is modeled after the Kalamazoo Promise.

Under the proposal, students could receive annual grants for two or four-year degrees equal to the average of tuition at Michigan’s 15 public universities (currently $9,575). The grant amount would vary on the amount of time the student had spent in Michigan’s K-12 system. If the student chose an institution costing more than the grant amount, the student would be responsible for the difference. If the reverse were true, the student could utilize the remaining amount for approved educational expenses.

The plan also calls for mechanisms to fund the estimated $1.8 billion proposal. First, the state’s sales tax would be extended to online retailers. Earlier studies have reported an estimated $142 million left on the table in 2012 by not collecting from online sales.

The second funding course is through the 6-percent decrease in costs of the state’s $28 billion in contracts. A contract reform group would be developed to present recommendations to the Governor and the Legislature.

Finally, the proposal calls for the development of a five-member Sunset Commission charged with review of all of the state’s tax credits and making recommendations for elimination of 10 percent, or roughly $3.5 billion. The Commission would be comprised of economists from Michigan State University, Michigan Technological University, the University of Michigan, the Upjohn Institute and Wayne State University.

Legislation is reportedly being drafted to encompass the proposal, which is also being reviewed by the House Democratic Caucus.

2011 Foreclosure Rates Drop 26 Percent

2012-01-13T10:17:00.002-05:00

A RealtyTrac report issued this week showed that approximately 100,000 Michigan homes were foreclosed in 2011, a 26 percent decrease from 2010 and a 15 decrease in rate from 2009. The number put Michigan sixth in the country behind Nevada, Arizona, California, Georgia and Utah.

On a national level, December’s foreclosure rate was the lowest in more than four years and was down 34 percent overall from 2010. Although still staggering, the estimated 1.89 million homes foreclosed in 2011 is the lowest number since 2007.

Detroit’s foreclosure numbers ranked 18^th among the country’s major metropolitan areas after two years of reduced foreclosure rates in the city.

Highland Park Schools To Fall Under Control Of EM

2012-01-13T10:16:00.002-05:00

After receiving the report of the 10-member financial review team last week, Michigan Governor Rick Snyder declared the Highland Park School District in a state of financial emergency Thursday. Under Public Act 4, the next step is the appointment of an emergency manager.

PAAdvisory reported last week that a balanced budget had only been achieved for the district in one of the last six years. The budget deficit grew from $6.6 million to $11.3 million from the 2009-2010 to the 2010-2011 fiscal year. Additionally, the review team noted that the District, as of mid-November, had $1.7 million in unpaid bills – some as late as six months delinquent.

The situation was compounded this week when Treasury officials made the trip to Highland Park to determine the exact amount necessary to make payroll for the District this week. $188,000 was determined to be the number and the District will receive their January state aid payment in advance to meet their obligations.

A January 17^th meeting is schedule with District officials to discuss next steps. The district is expected to appeal the declaration.

Ballot Language Filed For Increased Renewable Energy Requirement

2012-01-13T10:15:00.000-05:00

The State Board of Canvassers will be meeting next week to review and potentially approve for circulation ballot language that would require Michigan utilities to generate 25% of their electricity from renewable sources by 2025. The language was filed by the group Michigan Energy, Michigan Jobs.

The Michigan Legislature passed a 10% Renewable Portfolio Standard (RPS) requirement by 2015; however, the pressure has been on since, mostly from environmental interests and Democratic office-holders, to increase the standards. Proponents of the measure, including many organized labor entities, see the measure as a job provider – beyond the environmental impacts.

The proposal would also restrict utilities from increasing electricity rates by more than 1 percent in any one year in an effort to comply with RPS standards.

PAAdvisory Briefs

2012-01-13T10:11:00.002-05:00

Friend to Many, Bruce McDonald, Passes

PAA lost a good friend this week with the passing of Bruce McDonald. Many of our clients will remember Bruce for his gracious hosting of our annual cocktail cruise at Bay Harbor aboard his yacht, Trilogy. Bruce was a successful businessman, a true MSU supporter, and a great friend. He will be missed.

NITC Announcement Expected After State of the State

Governor Rick Snyder continues to review options for moving forward on the New International Trade Crossing initiative for an additional bridge from Detroit to Windsor. Sources have been speculating when the Governor may bring forward his intentions with regard to the proposed new structure. Signs now indicate that an announcement is to be made after the State of the State address next week.

Long-time Chamber Executive to Retire

After 34 years with the Michigan Chamber of Commerce, long-time vice president and general counsel Robert “Bob” LaBrant will be retiring at the end of March. LaBrant’s career in chamber management began in 1972 at the Appleton, Wisconsin Chamber of Commerce.

Budget Presentation February 9th

Governor Rick Snyder will unveil his recommendations for the 2012-2013 and 2013-2014 fiscal year budgets on February 9^th at a joint hearing of the House and Senate Appropriations committees. The Governor will be joined by Michigan Department of Technology, Management & Budget Director John Nixon, CPA.

December Revenues Fall Slightly

State revenues dipped a bit in December, largely due to lower than estimated income tax withholding collections. The Senate Fiscal Agency reported that December revenues were $12.6 million below estimates; however, other taxes, such as the state’s sales tax, were up and help to offset the lower withholding numbers.

Stabenow Continues Fight for FRIB

Following comments from the U.S. Department of Energy that it may consider breaking earlier commitments to fund the Facility for Rare Isotope Beams (FRIB) at Michigan State University, U.S. Senator Debbie Stabenow issued a statement regarding the bipartisan commitments to the project and the facility’s potential economic impact. The University estimates the facility will create nearly 6,000 temporary jobs during construction, 400 full-time positions once operating, and generate nearly $200 million in tax revenue.

Santana Loses Committee Role

State Representative Harvey Santana (D-Detroit) is no longer the Minority Vice Chair of the House Agriculture Committee after House Speaker Jase Bolger (R-Marshall) removed him from the position following the December altercation on the House floor. Rep. Charles Brunner (D-Bay City) will assume the post.

Recommendation: Highland Park Schools Need Emergency Manager

2012-01-06T10:56:00.003-05:00

A financial review team, similar to the one recently appointed to review the finances of the City of Detroit, concluded their review of the Highland Park Schools and submitted their report and recommendations to Governor Rick Snyder this week.

The review team found that, although the schools had been cutting their budget each of the last three fiscal years, a balanced budget had only been achieved for the district in one of the last six years. The budget deficit grew from $6.6 million to $11.3 million from the 2009-2010 to the 2010-2011 fiscal year.

Additionally, the review team noted that the district, as of mid-November, had $1.7 million in unpaid bills – some as late as six months delinquent.

Student enrollment for Highland Park Schools has been steadily declining. The report indicates that 1,331 students were enrolled in 2010-2011; however, an estimated 969 are currently enrolled. 3,179 students called the district home in 2006.

The Governor, if he chooses to follow the recommendations of the review committee, can appoint an emergency manager to be in place later this month.

Oakland County Democratic Party Files Suit Over District Maps

2012-01-06T10:54:00.001-05:00

Frank Houston, Oakland County Democratic Party Chair, is the lead plaintiff in a suit filed this week in Ingham County Circuit Court in response to the passage (and Gubernatorial approval) of legislation providing the Oakland County Board of Commissioners with the authority to redraw district lines.

House Bill 5187, now Public Act 280 of 2011, shifted the authority to the Board of Commissioners from a five-member panel composed of the county prosecutor, treasurer, clerk and the chairs of both major county political parties. In Oakland County, that five-member panel had concluded their work in redrawing the district lines, which was upheld in court. The panel was of a Democratic majority while the Board of Commissioners, now with the authority to redraw the lines under the new law, is of a Republican majority.

The foundation for the suit is that the law is unconstitutional as it is a local act only affecting Oakland County; therefore, requiring a two-thirds supermajority approval by the Legislature. Additionally, the suit contends that the new statute does not provide enough time for the statutory judicial review of the new maps from the County Board of Commissioners prior to the May 15 filing deadline for candidates.

PAAdvisory Briefs

2012-01-06T10:52:00.005-05:00

Bishop to Run for Oakland County Prosecutor

Former State Senate Majority Leader Mike Bishop (R-Rochester) has filed as a candidate for Oakland County Prosecutor in the coming election. Mr. Bishop has been practicing law with Clark Hill since being term limited from the Senate and will be challenging incumbent Democratic County Prosecutor Jessica Cooper.

SFA Report Includes Increased Revenue Estimates

The Senate Fiscal Agency (SFA) issued their projections this week that will be used at the January 13^th Revenue Estimating Conference with the House Fiscal Agency and the Department of Treasury. The report projects $19.8 billion in the General and School Aid Funds for the current 2011-2012 fiscal year, up nearly $400 million from the May numbers. The report also estimates 2012-2013 fiscal year numbers for the two funds at $19.9 billion, up $67.4 million from earlier projects.

Kent County Area Special Commission to Meet on Consolidation

A special commission composed of Kent County Commissioners, Grand Rapids City Council members and representatives from surrounding townships and smaller municipalities will be meeting in 2012 to discuss potential savings through consolidation and collaboration. Kent County is Michigan’s 4^th largest county.

EM Law Repeal Effort Reaches Signature Goal

The Committee to Stand Up for Democracy (CSUD), the coalition leading the effort to repeal the Emergency Manager Law (Public Act 4 of 2011), announced that they have passed the 170,000 signature mark. 161,304 valid signatures would be required to get the question of repealing the law on the November 2012 ballot.

Olson Considering Party Switch

2012-01-06T10:52:00.004-05:00

State Representative Rick Olson (R-York Township) has confirmed that he is considering running as a Democrat in 2012.

Representative Olson was one of the few Republican members of the Legislature put into a negative situation following the redistricting process of earlier this year. Others were left with options of moving to neighboring districts, however, Representative Olson’s new 55^th District leaves little alternative. It is estimated the new district, which loses a portion of Monroe County and picks up a portion of the City of Ann Arbor, has as high as a 65 percent Democratic base.

Mr. Olson’s relatively conservative voting record would make for an interesting Democratic Primary in the 55^th District as at least two other Democrats have indicated their intentions to run. Automotive engineer Adam Zemke and local attorney Bob Davidow are running.

Guest Column

2012-01-06T10:51:00.002-05:00

This week, PAAdvisory is excited to publish a guest column written by Public Affairs Associates (PAA) intern Vincent Brown. Vincent is a senior at Central Michigan University and plans to pursue a law degree upon his graduation.

A One State Recession: A Tale of Michigan’s Manufacturing Dependent Economy

By: Vincent Brown

Michigan undoubtedly suffered the effects of the nationwide recession to the deepest extent. Evidence provides that Michigan began developing recession-like symptoms well before the nation plummeted into a recession as a whole. Michigan has proven to be a predictor to the nation’s economic status, experiencing the effects first. Although at times the unemployment rates were not as low as found in other states, there was always the auto industry to hold Michigan together and provide jobs, right? Wrong. The fallout of the auto industry cut Michiganders right through the heart, as the iconic powerhouse of American manufacturing crumbled before our eyes. A symbolic industry that set Michigan apart from all other states, which everyone praised and was proud to be a part of, was shattered. Michigan jobs were depleted, hope gone, and families struggling to survive. This downturn began before the nation as a whole experienced economic trouble.

Michigan's economy has maintained direct ties to the auto industry and has felt the effects of recession through hard economic times or when monetary authorities attempt to restrain the economy by tightening credit. These effects are felt due to the reliance upon the auto industry and when credit is down, car purchasing is down, and when car purchasing is down, Michigan’s economy suffers. The nationwide recession officially ended in June of 2009 and states began to slowly recover, including Michigan. Historically, Michigan has mirrored the employment rates of the nation as a whole, except in the degree in which these rates fluctuate. When the nation as a whole experienced a declining employment rate, Michigan consistently had declined at a rate more severe; indicating larger losses and effects being experienced in Michigan due to the recession. As referenced before, when times are hard for the nation, credit tightens and sales are low, meaning new car production is stalled, subsequently furthering the effects of the recession in Michigan due to our dependence on the heavy manufacturing. This dependence is what keeps Michigan locked within the auto industries grasp, although we may think that we own the auto industry, contrary to that belief, it may own us.

According to Michigan demographer Ken Darga, Michigan has had a set of properties that have consistently indicated a "normal performance" economy. These properties consist of: deep recessions when the nation has recessions, strong recoveries when the nation has recoveries, a tendency to start recessions and recoveries a little bit sooner than the nation as a whole, and eventual rebounds to the national employment rate. When the nation found itself in previous economic downturn as experienced in the early 1980s, early 2000s, and the most recent recession, Michigan had always suffered the most severe job losses. Yet after every past drop in jobs, there were significant increases as recoveries began. From 2009-2010, Michigan had growth in jobs similar to that of previous recoveries after recession, indicating that Michigan is beginning to turn around for the better. It is safe to say, for the moment, that Michigan is headed in the right economic direction.

As shown above, at the end of the recession in 1982, there was immediate growth in jobs per 1000 residents. That growth of 6 jobs per 1000 residents was nearly equivalent to the growth experienced from 2009-2010 after the most recent recession. This mirrored growth is a sign of possible prospective growth that could take place if the similar growth continues to the extent of the growth following the 1982 recession.

Michigan job losses began to decline while national job gains increased simultaneously. As Michigan began to show improvement, the nation as a whole, although slower to show signs of a positive economic state, was also on its way to improvement. Michigan’s tendency to experience recovery before the nation as a whole has set an economic precedent. The one-state recession Michigan has been dealing with places the state deeper into economic hardships for extended periods of time and when recession sweeps the nation, Michigan is cut even deeper. A chart based on the Census Bureau’s Current Population Survey was created to compare Michigan’s share of the United States population to Michigan’s share of the United States unemployment rate. From 2002-2010, Michigan’s share of the unemployment rate continued to rise while Michigan’s share of the country’s population was in decline. Michigan’s increased share of the national unemployment rate with a declining population is a pivotal piece to understanding the deeper recession that was felt in Michigan. As Michigan lost significant population, there was concern because the rate of unemployment was increasing. Lost population and high unemployment was a deadly combination for our state, driving us further into a recession economy.

After the most recent recession, Michigan began posting economic numbers that were conducive of an immediate recovery. Michigan is currently posting growth in jobs along with growth in personal income. By experiencing recession before the nation does, Michigan is placed in its own one-state recession. This can be attributed to the fact that Michigan has placed itself in a corner with its development of a one dimensional economy. Michigan’s dependence upon the auto industry has further limited Michigan to expand and diversify itself. A diversified economy is crucial in regards to job growth and more so the economy. Placing faith within one industry to act as the state’s economic backbone is fiscally irresponsible. Since I was a young boy, my Grandmother has always stressed not to “place all of my eggs in one basket”, meaning that a single industry such as that of the auto industry, should not be the only form of reliance for the vast economy of Michigan. If only Michigan would have understood what my Grandmother meant. By diversifying the economy, Michigan would be taking preventative measures in order to avoid another recession. More industries need to come to Michigan in order for the economy to detach itself from its dependence upon heavy manufactures. Not only do more industries need to be established within Michigan, there needs to be incentive for businesses to base their operations within our state lines.

For more than a hundred years, Michigan has been a leader in manufacturing of numerous goods that extend past automobiles. To put it as simply as possible, Michiganders like to build, and this desire to build goes way past the automobile industry. It is in our blood as Michiganders to manufacture and that is one distinct characteristic that has yet to change throughout our history. Michigan’s heart and soul has been structured by manufacturing and that does not have to change, but merely expand into new ventures. Manufacturing new products within our state lines is what this state needs to diversify itself while at the same time doing what it has been doing for years. Clean energy strategies are an example of a future industry as environmental conditions seem to worsen from our current situations. Michigan needs to become a leader within the clean energy arena as times change and natural resources become scarce. Clean energy is the future, and to become a leader in the field would be exactly what Michigan needs to stimulate its economy. Companies such as Dow Corning and Dow Chemical have begun producing materials that are meeting the growing demand for alternative energy supplies. Dow Corning has become the world leader in solar panel materials and is setting a precedent in the industry, by basing the majority of its operations inside Michigan. New proposed industries such as advanced battery manufacturing have helped contribute to Michigan becoming a leader within the industry. In 2009, tax incentives totaling up to $225 million were approved to target research and manufacturing of advanced batteries. The largest automakers in the world have made a push toward electric vehicles and lithium-ion batteries which will be a significant piece of the auto industry future. This is a step in the right direction since the auto industry is already a staple within Michigan. By diversifying the connections with the auto industry ties, the economy itself would be diversified simultaneously without having to start from scratch.

Other industries such as food processing and different forms of manufacturing are what Michigan needs to diversify itself while at the same time including some of its strengths. Michigan produces vast amounts of food products agriculturally and then ships the food elsewhere to be processed, in order to form an array of products. In an effort to attract new industries, Michigan should attempt to bring food processing to Michigan to eliminate the need for out-of-state companies and eliminate supply chain cost. With the food being produced within our state and potentially processed into other food products, Michigan would have a newly developed industry that would enhance the economy.

Michigan has finally made headway from the worst recession it has seen since the Great Depression. While continuing on the path of recovery, strategic planning is in order to ensure that the lessons we learned in the last decade are not repeated. A diversified employment base, new industry, and businesses, along with a growing population will secure our state benefits when the next recession comes calling.

Detroit Review Team Appointed

2011-12-29T10:33:00.007-05:00

Michigan Governor Rick Snyder took a step closer to invoking Public Act 4 and naming an Emergency Manager for the City of Detroit when he named the 10-member financial review team Tuesday.

State Treasurer Andy Dillon was appointed to chair the team that will also include:

Frederick Headen, Department of Treasury Local Government Services Bureau Director
Conrad Mallett, former Michigan Supreme Court Chief Justice
Jack Martin, CPA, founder and Chair of Martin, Arrington, Desai & Meyers, PC
Isaiah McKinnon, former Detroit Police Chief
Glenda Price, former Marygrove College President
Irvin Reid, former Wayne State University President
Doug Ringler, Department of Technology, Management and Budget Director Internal Audit Services Director
Shirley Stancato, President of New Detroit
Brom Stibitz, Department of Treasury Senior Policy Advisor

The review team will have 60 days to report their findings. Statute provides for a 30-day extension if necessary.

$3.3 Billion In Bond Sales Eliminates Federal Unemployment Debt

2011-12-29T10:33:00.006-05:00

The Michigan Finance Authority issued $3.3 billion in bonds, $3.2 billion of which was used to pay of the state’s debt to the federal government for unemployment benefits. The bonds were issued at a .24 percent interest rate and were underwritten by Citigroup Global Markets.

The bonds have an initial maturity date of July 2014, but will convert to a 10-year bond in 2012. While businesses will remain on the hook for paying off the bonds, by paying off the federal debt, the bonding eliminates interest and penalty payments.

The funds remaining following the payment to the federal government will reimburse the state’s general fund for the $38.25 million it paid in interest to the feds in September.

Snyder Appointees Control Transportation Commission

2011-12-29T10:32:00.001-05:00

Michigan Governor Rick Snyder made two more appointments to the state’s Transportation Commission, bringing his total appointments to four of the six members since taking office.

Sharon Rothwell, Vice President of Corporate Affairs for Masco Corporation was appointed to replace James Scalici, a 2006 Granholm appointee. Ms. Rothwell served as former Governor Engler’s Chief of Staff.

Michael Hayes, President & CEO of the Midland Center for the Arts, was appointed to replace Ted Wahby, a 1997 Engler appointee. Mr. Hayes has served in multiple capacities with the Dow Chemical Company as well as a member of the House of Representatives from 1981 – 1988.

PAAdvisory Briefs

2011-12-29T10:31:00.004-05:00

alley Signs Final Bills of 2011

While Governor Rick Snyder was traveling out of state, Lt. Governor Brian Calley signed the last 20 bills of 2011 into law. Many of the remaining bills were clean-up measures for the new corporate income tax (CIT) effective January 1, 2012. Also included were measures to protect income tax credits for taxpayers living in Renaissance Zones and a package to clarify that turbines cannot be claimed as industrial property by utility companies.

Closing of State’s Books Bumped Back

The Department of Technology, Management & Budget has announced that the books on the state’s finances will not be closed until a couple of weeks later than predicted – closer to mid-January. State law requires the unaudited financials to be completed by the end of January. The Revenue Estimating Conference is scheduled for January 13, 2012.

Michigan Legislature Adjourns Sine Die

The Michigan Legislature closed out business for the year with the uneventful Sine Die session. A handful of lawmakers were present as the Legislature wrapped up the year by noon on Wednesday.

Please Note: PAA will be closed Friday December 30, 2011 and Monday January 2, 2012. We wish you a prosperous and happy New Year.

Preliminary Review Finds "Probable Financial Stress" In Detroit

2011-12-22T10:32:00.003-05:00

Michigan Treasurer Andy Dillon announced Wednesday that the Department’s preliminary review of the city of Detroit finances resulted in findings of “probable financial stress,” one of the thresholds in Public Act 4 that results in the appointment of a full review team by Governor Rick Snyder.

Among the findings of the preliminary review team were that the city is experiencing cash-flow problems and is projected to run out of cash in April of 2012. Additionally, Mr. Dillon stated that the city has violated the Uniform Budgeting and Accounting rules by failing to account for falling revenue by adjusting budgets.

Members of the review team have not yet been appointed. Sources have indicated that Detroit residents will be included as the Snyder Administration continues to work with Detroit Mayor Dave Bing and the Detroit City Council in the hope that the city officials will be able to come to an agreement with unions representing city employees.

Once appointed, the review team will have 60 days to report their findings. The statute provides for a 30-day extension if necessary. In addition to the Treasurer or his designee, the State Budget Director John Nixon, CPA, or his designee, is part of the review team as well as a member appointed by Senate Majority Leader Randy Richardville (R-Monroe) and House Speaker Jase Bolger (R-Marshall).

Governor Signs Charter School Cap Phase Out

2011-12-22T10:31:00.003-05:00

Michigan Governor Rick Snyder signed legislation Tuesday eliminating the cap on university-authorized charter schools. Senate Bill 618, sponsored by Senator Phil Pavlov (R-St. Clair) is now Public Act 277 of 2011.

As reported by PAAdvisory last week, the new statute phases out the cap elimination over four years, rather than completely eliminating the current 150 charter school cap immediately. The cap will increase to 300 by the end of 2012, 500 at the end of 2014 and be completely gone by the beginning of 2015.

The legislation was not given immediate effect so it will take effect 90 days following the Legislature’s late December sine die adjournment. In addition to Senator Pavlov, new House Education Committee Chairman Representative Tom McMillin (R-Rochester), Representative Deb Shaughnessy (R-Charlotte) and Lt. Governor Brian Calley were present at the bill signing.

Business Groups Applaud Approval Of Unemployment Benefit Reform

2011-12-22T10:30:00.003-05:00

Two packages of legislation approved by Governor Rick Snyder received considerable support from business groups.

Senate Bills 483 and 484, now Public Acts 267 and 268 of 2011, respectively, provide the State the ability to issue bonds in order to pay off the $3.2 billion unemployment debt to the federal government. In doing so, the State is considerably reducing the burden on Michigan business, which fund the unemployment insurance system, by eliminating the penalties and high federal interest rate on the loan.

Senate Bill 806, sponsored by Senator Jack Brandenburg (R-Harrison Township), is now Public Act 269 of 2011. Under this new statute, businesses are able to increase the wage base they use for figuring unemployment taxes as well as shorten the experience window from five years to three. Additionally, unemployed workers will be required to take a job after 10 weeks if the job pays at least 120 percent of their assistance amount or is equal to or greater than the area’s prevailing wage – even if the position is outside of their field of experience or skill.

MPSC Implements Home Heating Assistance Replacement

2011-12-22T10:29:00.001-05:00

With the Governor’s approval of Senate Bills 364 and 864 and House Bill 5190, a fix, albeit temporary, was provided to ensure Michigan’s poor have resources to pay for home heating this Winter.

The compromise on the legislation reached last week calls for the return of the roughly $48 million previously collected from customers and a continuation of the surcharge customers have been paying for another nine months to restore the $48 million. This will be combined with a $10 million general fund appropriation to equal the $58 million that was appropriated last year. The Michigan Public Service Commission (MPSC) waited no time in implementing the structure for the support, partially through the awarding of grants totaling $23 million. The grants are headed to eight charitable organizations statewide as follows:

The Heat and Warmth Fund: $9.7 million

The Salvation Army: $6.7 million

TrueNorth Community Services: $2.6 million

Michigan Community Action Association: $2.1 million

Downriver Community Conference: $852,000

The Society of St. Vincent de Paul of the Archdiocese of Detroit: $681,000

Lighthouse Emergency Services: $256,000

Barry County United Way: $128,000

PAAdvisory Briefs

2011-12-22T10:25:00.003-05:00

Snyder Signs Film Incentive Measure

Michigan Governor Rick Snyder signed Senate Bill 569 into Public Act 291 of 2011, establishing the new structure for Michigan’s film incentive program. $25 million had been appropriated by the Legislature for fiscal year 2011-2012 to provide for between 25 and 32 percent incentives for the costs of activities and personnel for film, television and video production in Michigan.

State Population Drops Again – But Only Slightly

The 2011 census estimates released Wednesday by the U.S. Census Bureau have Michigan at roughly 7,500 fewer citizens than the official 2010 census. With 9,876,187 residents, Michigan was not alone in losing population as it was in 2010. This year Maine and Rhode Island also experienced population drops.

Contentious Oakland County Redistricting Reform Signed

House Bill 5187 became Public Act 280 of 2011 on Tuesday when Governor Snyder approved the bill sponsored by Representative Brad Jacobsen (R-Lake Orion). The bill provides the Oakland County Board of Commissioners with the authority to draw district lines for the Commission rather than the reappointment panel previously in statute (comprised of the county prosecutor, county treasurer, county clerk and the chairs of the two county political parties). The maps already drawn in 2011 by the previous panel had been approved by the Court of Appeals; however, were the first ever drawn by a panel with a Democratic majority.

Lindsey to Wayne State

Wayne State University has announced the addition of Patrick Lindsey as the University’s Vice President of Government and Community Affairs. Mr. Lindsey was most recently the Director of External Relations and Development for Focus: HOPE, the Detroit-based not-for-profit.

Charter School Cap Phases Out As Legislation Heads To Governor

2011-12-16T11:01:00.003-05:00

The State Senate concurred Thursday in the version of Senate Bill 618 approved Wednesday by the House, sending the measure to the desk of Michigan Governor Rick Snyder, who is expected to sign it into law and end the long debate over a cap on university-authorized charter schools.

Wednesday’s House session brought the significant action on the measure, which eventually passed 58-49. Sources indicated that more than a dozen Republicans had expressed displeasure with the measure; however, the final vote included only five Republican “no” votes – Representatives Mike Callton (R-Nashville), Ed McBroom (R-Vulcan), Paul Muxlow (R-Brown City), Phil Potvin (R-Cadillac), and Sharon Tyler (R-Niles). Democratic Representative Shanelle Jackson (D-Detroit) voted “yes.”

The enrolled version of the measure, as amended by the House, phases in the cap elimination over four years, rather than completely eliminating the current 150 charter school cap immediately. The cap will increase to 300 by the end of 2012, 500 at the end of 2014 and be completely gone by the beginning of 2015.

The legislation was not given immediate effect so, upon signature by Governor Snyder, will take effect 90 days following the Legislature’s late December sine die adjournment.

Legislation To Create Process For County Road Commission Elimination Falls Short

2011-12-16T11:00:00.003-05:00

Early Thursday evening, the Senate passed legislation permitting the elimination of county road commissions. House Bills 5125 and 5126, sponsored by Rep. Jon Switalski (D-Warren) and Rep. Dale Zorn (R-Ida), respectively, gained the Senate’s approval 20-18.

A floor substitute proposed by Senator Mike Nofs (R-Battle Creek) marked a significant change in direction from earlier Senate action.

While the version of the package that moved this week from the Senate Transportation Committee provided for a vote of the people in the case of the elimination of any road commission, the substitute version that passed allows county boards of commissioners to eliminate their county road commissions and absorb their authority and responsibilities if the road commissioners are appointed and not elected. If road commissioners are elected, voters would have to approve.

It was another change made by the Senate; however, that resulted in the House’s failure to obtain the votes to concur in the Senate changes and ultimately resulted in the legislation not moving to the Governor this year. The Senate-adopted substitute contained a January 1, 2015 sunset provision – after which a county board would no-longer be authorized to absorb the road commission.

Many House Democrats, including Rep. Switalski, who had strongly supported the original measures, were unwilling to support the amended version. Sources indicate that the measure will be a top priority following the Legislature’s return to Lansing in January.

Home Heating Aid Compromise Reached

2011-12-16T10:59:00.003-05:00

Not long before adjournment for the remainder of 2011, the Legislature was able to reach an agreement on Legislation designed to assist those in need of help paying their home heating bills this winter. Senate Bills 364 and 864, containing the compromise, were passed by the House shortly following the announcement of the agreement. The Senate then concurred in the House changes without discussion, placing the bills on the road to the Governor’s desk.

Earlier this year, the Court of Appeals found that the Public Service Commission no longer had the authority to manage the problem, ruling that 2009 action by the Legislature indicated a desire for the Low-Income and Energy Efficient Fund to continue.

The compromise calls for the return of the roughly $48 million previously collected from customers and to continue the surcharge customers have been paying for another nine months to restore the $48 million. This will be combined with a $10 million general fund appropriation to equal the $58 million that was appropriated last year.

Unemployment Reform Package Finalized

2011-12-16T10:58:00.003-05:00

The House of Representatives passed legislation back to the Senate Wednesday, amid strong Democratic opposition, providing for significant unemployment reform. Senate Bill 806, sponsored by Senator Jack Brandenburg (R-Harrison Township), passed the House 61-47. The Senate later concurred in the changes 26-11, sending the measure to Governor Snyder.

Under the reform, businesses are able to increase the wage base they use for figuring unemployment taxes as well as shorten the experience window from five years to three. Additionally, unemployed workers will be required to take a job after 10 weeks if the job pays at least 120 percent of their assistance amount or is equal to or greater than the area’s prevailing wage – even if the position is outside of their field of experience or skill.

The legislation was tie-barred to Senate Bills 483 and 484, measures permitting the state to issue bonds in order to pay of the $3.2 billion unemployment benefit debt to the Federal Government.

Revised Film Incentive Structure Headed to Governor

2011-12-16T10:57:00.003-05:00

Michigan replaced the generous film subsidy with a $25 million appropriation during the budget development process earlier this year, and Thursday the Legislature passed the measure creating the structure for managing the distribution of the funds.

Senate Bill 569, sponsored by Senate Majority Leader Randy Richardville (R-Monroe) provides for tax incentives of 25 to 32 percent for personnel and activities in Michigan related to television, film and video game production. The House of Representatives passed the bill 92-15 and the Senate concurred 35-3 shortly thereafter.

House Session Ends Following Unusual Confrontation

2011-12-16T10:56:00.003-05:00

Although both the House and Senate sessions were adjourned Thursday without approaching the midnight hour, a bit of drama unfolded on the House floor as two members of the Democratic Caucus had to be separated following a physical confrontation.

Sergeants-at-Arms were involved in a brief scuffle around Representatives David Nathan (D-Detroit), Harvey Santana (D-Detroit) with Roy Schmidt (D-Grand Rapids), stepping in between them.

Briefly following the incident, rule 32.2 was invoked, requiring members to remain seated.

PAAdvisory Briefs

2011-12-16T10:55:00.003-05:00

Senate Addresses Emergency Manager Transition Issue

Thursday afternoon the State Senate passed Senate Bill 865, a bill to authorize the appointment of a receivership transition advisory board for local governmental units exiting the control of an emergency manager under Public Act 4. The bill was passed by the Senate Government Operations Committee Tuesday and now moves to the House for consideration.

State Employees to Receive Retirement Health Care Contribution Refund

Beginning with the December 22^nd paychecks, state employees will no longer be making the 3% contribution for retirement health care. Further, the amount raised by the previously mandatory contribution will be refunded to employees, with interest, in their January 19, 2012 paychecks.

State Unemployment Falls Below 10 Percent

For the first time since November of 2008, Michigan’s unemployment rate fell below double-digits, falling to 9.8% for November 2011. The 0.8 percent drop is representative of a 21,000 increase in total employment, a 39,000 decrease in unemployed and a 19,000 decrease in total workforce.

Governor’s Signature Legalizes Fireworks

Michigan Governor Rick Snyder signed legislation Tuesday ending Michigan’s prohibition on consumer-grade fireworks. House Bill 4293, sponsored by long time champion of the issue Representative Harold Haugh (D-Eastpointe), and Senate Bill 194, sponsored by Senator Rick Jones (R-Grand Ledge), are now Public Acts 256 and 257, respectively.

PAA Offices to Close

Along with the State of Michigan offices, Public Affairs Associates will be closed for the holidays on both Fridays, December 23^rd and 30^th, as well as both Mondays, December 26^th and January 2^nd.

Legislature Bans Domestic Partner Benefits- Confusion Reigns

2011-12-09T10:00:00.002-05:00

On Wednesday, the State Senate passed House Bill 4770, sponsored by Representative Dave Agema (R-Grandville), prohibiting local units of government from providing medical benefits to unrelated adults living with employees. The measure was amended by Senator Mark Jansen (R-Gaines Township) to remove mention of high education institutions in the definition of public employers in an effort to bring the measure into compliance with the State Constitution, which provides universities with autonomy.

The House, on Thursday, concurred in the Senate’s changes to HB 4770 63-47, claiming the measure would still apply to university employees. By utilizing the same definition of public employee found in the Public Employee Relations Act, the House claims the measure puts emphasis on the employee, not the employer, thereby working around the constitutionally-provided autonomy. The Public Employee Relations Act defines a public employee as “a person holding a position by appointment or employment in the government of this state.”

Meanwhile, the Administration and the Senate maintain their interpretation that universities are exempt from the measure.

Back-Up For Emergency Manager Law Under Development

2011-12-09T09:59:00.001-05:00

A coalition, led by Stand Up for Democracy, is seeking the more than 161,000 signatures necessary to suspend the State’s new Emergency Manager (EM) statute (Public Act 4) and place it on the November 2012 general ballot. Some polls have shown that as few as 30 percent of voters would support the continuation of the statute.

As coalition leaders claim the effort is close to the threshold for success in the referendum effort, Snyder Administration officials are growing nervous about the potential for the EM law being thrown into limbo and the resulting confusion for those local units under the control of an EM at that time. Most believe the suspension of PA 4 would revert the state to PA 72 of 1990, the former Emergency Financial Manager law.

Governor Snyder, Lt. Governor Calley and Senate Majority Leader Randy Richardville (R-Monroe) have expressed their hopes that a back-up EM law would be on the books prior to the signatures being submitted for the potential referendum. House Speaker Jase Bolger (R-Marshall); however, has indicated his preference to wait until the results of the effort are determined. Either way, by placing a new law on the books prior to the referendum, organizers would be required to again collect signatures.

The legislation under development reportedly would maintain all of the powers of an appointed EM; however, some “experience-based” changes would be made. Leaders were also reportedly debating the possibility of including an appropriation in the new legislation, rendering it referendum-proof.

House Passes Oakland County Redistricting Reform- Dems Object

2011-12-09T09:58:00.001-05:00

The House of Representatives passed legislation Thursday transferring the authority for redrawing the County Board of Commissioners district lines in Oakland County from a reapportionment commission to the Board of Commissioners. The current reapportionment commission is comprised of the county clerk, treasurer, prosecutor and the chairs of the two county political parties.

House Bill 5187, sponsored by Representative Bradford Jacobsen (R-Oxford) passed the House 58-50 with Republican Representatives Kevin Cotter (R-Mt. Pleasant), Ed McBroom (R-Vulcan), Earl Poleski (R-Jackson) and Sharon Tyler (R-Niles) voting no.

Democrats immediately characterized the transition of authority as a blatant Republican partisan power-grab largely because the maps have already been re-drawn and have been upheld by the Court of Appeals. The current reapportionment commission has a Democratic majority while the County Board of Commissioners is under Republican Majority.

Confusion occurred during final passage on the House floor when Democratic Floor Leader Kate Segal (D-Battle Creek) called for a point of order with regard to the bill’s need for a two-thirds approval as it affects only one county and is therefore considered a local act. The debate ended when, after 30 minutes of caucusing, Representative John Walsh (R-Livonia), then in the Chair, ruled the request was out-of-order as it was not timely.

Anti-Bullying Measure Signed

2011-12-09T09:57:00.001-05:00

Michigan Governor Rick Snyder related his experiences with bullying from childhood into college as he signed House Bill 4163 into law this week, now Public Act 241 of 2011. The measure requires all school districts to have anti-bullying policies.

Surrounded by the parents and relatives of students who had committed suicide because of bullying, the Governor brought to a close one of the year’s more contentious legislative issues. Former State Senator Samuel “Buzz” Thomas was recognized by the Governor for beginning the anti-bullying effort nearly a decade earlier.

Also with the Governor for the signing ceremony were Senate Majority Leader Randy Richardville (R-Monroe), Minority Leader Gretchen Whitmer (D-East Lansing), bill sponsor Representative Phil Potvin (R-Cadillac), and Senator Rick Jones (R-Grand Ledge) who sponsored a similar measure in the Senate.

Senate Passes School Supplemental

2011-12-09T09:56:00.001-05:00

With an estimated $500 million surplus from fiscal year 2011 at their disposal, the State Senate passed a measure this week filling a roughly $95 million shortfall in school funding.

Senate Bill 197, sponsored by Senate Appropriations Chair Roger Kahn (R-Saginaw) passed the Senate 35-0. The measure utilizes $67.1 million in School Aid lapsed funding from other budget lines and $27.5 million in direct appropriations in School Aid Funding (SAF).

The shortfall, largely caused by continued declining property values and associated tax revenues, was approximately $94.3 million in school foundation allowance funding and $334,000 in special education hold-harmless funding.

PAAdvisory Briefs

2011-12-09T09:55:00.003-05:00

Black Caucus Files Suit Regarding Redistricting Maps

The Legislative Black Caucus, in conjunction with the Detroit Branch of the NAACP, the United Auto Workers and the Latin Americans for Social and Economic Development have filed a suit in Federal Court as anticipated. The suit claims the redistricting maps will result in half of the minority lawmakers in the city of Detroit being forced from office, as well as splitting the 47 percent Hispanic district in Southwest Detroit into two districts.

November Revenues Show Mixed Bag

Although both individual income and sales tax revenues were down for November, overall revenues were up compared to November of 2010. The $1.6 billion in state revenue was up largely due to Michigan Business Tax collections; however, the revenue falls short of the projections for November from the May Consensus Revenue Estimating Conference.

Retailers Continue to Push Internet Sales Tax

Many small Michigan retailers continue to ask Michigan legislators to act on House Bills 5004 and 5005, which would require internet retailers to collect sales and use tax on internet sales in Michigan. While many local retailers have internet sales of their own, they claim business is being lost to internet sales-only businesses.

Frendeway Joins MRP

Matt Frendeway will serve as the new spokesperson for the Michigan Republican Party. The Central Michigan University graduate most recently was employed by The Quell Group and has previously served as spokesperson and executive affairs director for former Attorney General Mike Cox.

Charter School Cap Elimination One Step Closer

2011-12-02T10:14:00.003-05:00

Following a committee composition change on Tuesday which replaced Representative Holly Hughes (R-Montague) with Representatives Jon Bumstead (R-Newaygo) and Lisa Posthumus Lyons (R- Alto) on the House Education Committee, the panel approved Senate Bill 618, lifting the cap on university-based charter schools. Rep. Hughes has reportedly not supported the measure.

The measure had passed the Senate earlier this fall as part of the GOP’s education reform package. The final vote on the bill was 11-6 with Republican Representative Tom Hooker (R-Byron Center) voting “nay” with the panel’s Democratic members.

This was newly appointed House Education Committee Chair Representative Tom McMillin’s (R-Rochester) first meeting with the gavel and the debate became heated almost immediately. Multiple exchanges took place between Committee Democratic Vice Chair Lisa Brown (D-Bloomfield Township), Representative Rudy Hobbs (D-Lathrup Village) and McMillin over procedural aspects, such as the order in which amendments were addressed; however, the Chair closed the hearing with comments clearly intended to attempt to mend any hard feelings resulting from the day’s debate.

McMillin also announced his intention of forming a subcommittee on education quality standards.

Snyder's Veto Pen Gets First Use

2011-12-02T10:13:00.003-05:00

Although not entirely unexpected, some Republicans and business groups were caught off-guard when Michigan Governor Rick Snyder used his veto power for the first time Thursday, vetoing House Bill 4326, legislation that would have essentially prohibited state agencies and departments from issuing regulations more restrictive then the federal government. The measure was sponsored by Representative Jeff Farrington (R-Utica).

The Administration had expressed early concerns regarding the measure as it went too far to tie the hands of state agencies. The Governor also criticized the legislation’s requirement that every proposed rule be matched with a federal statute by the Department of Licensing and Regulatory Affairs (LARA) and even went as far as to mention it may contain conflicts with the Constitution as it amends other statutes through the Administrative Procedures Act.

Republicans had shown signs of willingness to work with the Administration to address their concerns; however, the only change made was the ability for agencies and departments to promulgate emergency rules more strict then federal regulations.

In his veto message, the Governor used examples of successful initiatives that went beyond associated federal regulations, such as ballast water rules.

Senate Passes Major UI Changes Following Rare Procedural Act

2011-12-02T10:12:00.003-05:00

The State Senate addressed significant changes in the state’s unemployment insurance program Thursday, but only after a rare procedural move by the upper chamber’s minority caucus members extended session by more than four hours.

After Senate members found some common ground on two bills to issue bonds as a method to pay off the $3.2 billion unemployment benefit debt to the federal government (Senate Bills 483 and 484), the debate on SB 806 took an interesting twist. Senate Democrats refused to waive the full reading of the 205-page bill on Third Reading, requiring Secretary of the Senate Carol Viventi and Assistant Secretary Adam Reames to take turns for 4 hours and 18 minutes.

The legislation makes significant changes to unemployment insurance regulations in Michigan, such as requiring the unemployed to accept a position outside of their field of training after 10 weeks of receiving benefits if the job pays more than 120 percent of the unemployment benefit or is equal to the area’s prevailing wage. The substance of the measure, however, was never debated on the floor.

Democrats had offered nine amendments to the legislation; however, quickly following the conclusion of the bill’s full reading, Republicans moved to vote “en bloc” on all amendments – resulting in their immediate failure. The vote on the passage of the measure followed thereafter.

Governor Delivers Special Message On Talent

2011-12-02T10:11:00.003-05:00

In what he described as his most important special message to the Legislature yet, Michigan Governor Rick Snyder laid out his plan for better connecting Michigan’s employers with jobseekers. The Governor’s Special Message on Talent was highlighted by the unveiling of the Pure Michigan Talent Connect program and website, http://www.mitalent.org/.

Also significant was the Governor’s call for a “work sharing” program whereby an employer can reduce a worker’s hours rather than an outright layoff and the Unemployment Insurance Agency benefits would be prorated to make-up for lost hours. The Governor pointed to 22 other states with similar successful programs.

Legislation making the needed statutory changes already exists, having been introduced by Representative Jim Ananich (D-Flint) in April. House Bill 4516 has been referred to the House Commerce Committee where the panel’s Chairman, Representative Wayne Schmidt (R-Traverse City), has indicated he would consider addressing the measure following the Committee’s priority – the unemployment insurance program reforms recently passed by the Senate (see related story).

The Governor also called for the federal government to relax restrictions on immigrants working in Michigan and called upon the Michigan Legislature to provide an exemption for entrepreneurs from job training and work requirements.

New Film Incentive Structure Measure Clears House Panel

2011-12-02T10:10:00.001-05:00

Senate Bill 569, sponsored by Senate Majority Leader Randy Richardville (R-Monroe), cleared the House Commerce Committee 16-1 Thursday. The legislation, which provides for rebates for film companies that do business in Michigan rather than placing the incentives within Michigan’s tax structure, passed the State Senate 34-4 in early November.

With support from the Michigan Economic Development Corporation (MEDC), Representative Jeff Farrington (R-Utica) was successful in amending the legislation to remove commercials from eligibility for the incentives. Representative Mike Shirkey (R-Clark Lake), the lone “no” vote on the bill, offered three amendments, all failing 3-14.

PAAdvisory Briefs

2011-12-02T10:09:00.001-05:00

Democratic Nominee Named in 51st

Linden Community Schools board member and special education teacher Steven Losey was selected by the Genesee County Democratic Party Thursday to run in the special election for the 51^st House District. Mr. Losey will face Genesee County Commissioner Joe Graves, selected by Republicans, on February 28^th to replace recently recalled former Representative Paul Scott (R-Grand Blanc).

Terry Brown to Run for 84^th…Again

After losing by only 18 votes in 2010 to current, and embattled, State Representative Kurt Damrow (R-Port Austin), former Democratic Representative Terry Brown has announced his intention to seek his former seat in 2012. Mr. Brown has previously served two terms in the seat, allowing for one more.

Conyers Requests Review of PA 4

In the midst of expected action regarding the City of Detroit, U.S. Representative John Conyers (R-Detroit) has asked U.S. Attorney General Eric Holder to review Michigan’s new Emergency Manager statute, Public Act 4. Mr. Conyers expressed concern that the ability for an acting Emergency Manager to cancel contracts and collective bargaining agreements outside of bankruptcy may violate the U.S. Constitution Contract Clause.

MEDC Issues Saving Grant to Focus: HOPE

Just more than a week after announcing significant staff layoffs and the ending of job training programs because of the loss of nearly $6 million in federal dollars, Focus: HOPE was issued a $1 million transitional grant from the Michigan Economic Development Corporation (MEDC) to continue some of the programs.

House Passes County Road Commission Elimination Measures

The House of Representatives passed a package of legislation this week allowing for the elimination of county road commissions. House Bills 5125 and 5126 allow for road commissions appointed by county boards of commissioners to be eliminated by a vote of the boards, while those county road commissions elected by public vote must be eliminated by public vote.

Michigan Supreme Court Rules On Pension Tax

2011-11-23T11:08:00.003-05:00

The Michigan Supreme Court ruled 4-3 in In Re Request for Advisory Opinion Regarding Constitutionality of PA 38 bringing to a close the question of the future of the pension tax as passed by the Legislature in May as a portion of overall tax reform.

The Court held that the imposition of personal income tax on public-sector and private sector pensions was constitutional, as well as the provision basing the determination of eligibility for exemptions on the taxpayer’s birth date.

Ultimately reversed by the Court is the provision basing eligibility for exemptions and deductions based on the taxpayers “total household resources.” The Court found that this provision violated the Michigan Constitution’s ban on graduated income tax. Chief Justice Robert Young, Jr., Justice Stephen Markman, Justice Mary Beth Kelly, and Justice Brian Zahra issued the majority opinion. Justice Michael Cavanaugh, Justice Marilyn Kelly, and Justice Diane Hathaway dissented.

The ruling will cause an estimated $60 million negative revenue impact in fiscal year 2011-2012 – a hole Governor Rick Snyder and the Legislature will need to fill.

Congressional Supercommittee Fails

2011-11-23T11:07:00.001-05:00

The bipartisan, bicameral “supercommittee” in Congress charged with eliminating a $1.2 trillion budget gap over 10 years failed to meet their self-imposed deadline and the anticipated finger-pointing has already begun.

Michigan was the only state with two members on the supercommittee, U.S. Rep. Dave Camp (R-Midland), Chair of the House Ways and Means Committee, and U.S. Rep. Fred Upton (R-St. Joseph), Chair of the House Energy and Technology Committee. Both have expressed their disappointment with the failure of the body to accomplish their goals – and both have committed to continuing to work.

Republicans reportedly held to their position of not addressing new revenue from the mostwealthy Americans, while Democrats reportedly were unwilling to go as far as Republicans wished on the cut side.

The failure of the supercommittee to compromise and fulfill their goals will put into effect automatic, across-the-board cuts in 2013.

Republican Nominee In 51st Special Named

2011-11-23T11:06:00.001-05:00

The Republican Party’s nominee to replace recalled State Representative Paul Scott in the 51^st House District will be Genesee County Commissioner Joe Graves.

Mr. Graves became the nominee after an interesting tiebreaker. After the second round of voting, Mr. Graves and fellow County Commissioner Miles Gadola were tied with seven votes each from the 14 members of the executive and statutory committee members that live in the 51^st District.

Options after the second vote were a coin toss or picking slips of paper. Mr. Graves became the nominee when he chose the paper labeled, “elected.”

Genesee County Democratic Party Chair Art Reyes has indicated that the party is in the process of choosing a date and location for the convention when they will select among the roughly six candidates for the Democratic nominee to run for the marginal House seat. It remains to be seen what, if any, role former Rep. Scott will play in the election.

Democratic Recall Efforts Ceased By GOP

2011-11-23T11:05:00.001-05:00

GOP recall coordinator Stu Sandler and the Michigan Republican Party have ceased efforts to recall members of the Michigan House of Representatives.

Citing the completion of specific goals and recognition of what the Michigan Education Association (MEA) had to spend to be successful in the effort targeting former Representative Paul Scott, Sandler indicated that the decision was made following discussions with party leaders.

Six Democratic lawmakers were targeted and had reached the level of approved ballot language, which included efforts to recall State Representatives Tim Bledsoe (D-Grosse Pointe), Lisa Brown (D-West Bloomfield), Phil Cavanagh (D-Redford Township), Brandon Dillon (D-Grand Rapids), Dian Slavens (D-Canton Township), and Jim Townsend (D-Royal Oak).

PAAdvisory Briefs

2011-11-23T11:03:00.003-05:00

PAA Offices Closed

Public Affairs Associates will close at 2:00PM on Wednesday, November 23^rd and will re-open Monday morning, November 28^th. From all of us at PAA, we wish you and your families a Happy Thanksgiving.

Pscholka Recall Attempt Over

The effort to recall State Representative Al Pscholka (R-Stevensville) because of his sponsorship of what became Public Act 4, the controversial new emergency manager statute, has ended. Language for the recall effort was approved in May and organizers had until Friday, November 18^th to submit signatures to the Secretary of State. None were submitted.

Benton Harbor Schools’ Finances to be Reviewed

State Superintendent of Public Instruction Mike Flanagan has ordered a preliminary financial review of the Benton Harbor Area Schools to be completed by December 20^th. According to Flanagan, the school district could have a budget deficit of $18 million by the end of the 2011-2012 fiscal year. The preliminary financial review is the first step toward the potential appointment of an emergency manager.

Bing Delivers Plan For Detroit - Snyder Eyes Emergency Manager

2011-11-18T12:04:00.001-05:00

Detroit Mayor David Bing delivered his much-anticipated plan for avoiding a fiscal emergency in the City of Detroit Wednesday as the City inches closer to going empty on the cash necessary to meet employee payroll and other obligations come April. The Mayor called for Detroit firefighters and police officers to take the same 10 percent cut in pay already imposed on other city workers, a 10 percent increase in employee contributions to healthcare insurance plans, some layoffs and a potential privatization of maintenance of the Detroit Department of Transportation (DDOT) and the Public Lighting Department. Additionally, Mr. Bing stated he would seek a small increase in the City’s corporate income tax.

Most significantly, Mayor Bing called upon Michigan Governor Rick Snyder and the Michigan Legislature to send Detroit the $220 million in revenue sharing money the Mayor claims was part of a 1998 agreement between then Governor John Engler and former Detroit Mayor Dennis Archer.

While Mayor Bing clearly stated multiple times that he was proposing the changes to lead the City out of fiscal distress and to avoid the Governor appointing an emergency manager under Public Act 4, the Governor indicated he expected to begin a preliminary financial review shortly. The appointment of a committee to conduct this review is the first step towards the appointment of an emergency manager.

Convicted Healthcare Provider's Licenses Gone Under New Law

2011-11-18T12:03:00.001-05:00

A package of legislation was signed into law by Michigan Governor Rick Snyder this week allowing for the permanent revocation of the license and/or registration of healthcare professionals convicted of criminal sexual conduct (CSC).

Senate Bill 235, sponsored by Senator Rick Jones (R-Grand Ledge), House Bill 4411, sponsored by Representative Gail Haines (R-Waterford), and House Bill 4412, sponsored by Representative Matt Huuki (R-Atlantic Mine) are now public law.

The measures apply to convictions of first, second or third degree CSC. Those convicted of fourth degree CSC or intent to commit CSC can apply for reinstatement after five years.

Meijer Receives Tax Credit For Detroit Store

2011-11-18T12:00:00.003-05:00

The Michigan Economic Growth Authority has awarded a $3.3 million Brownfield tax credit to Meijer for the construction of a store in Detroit. The retailer plans to raze the former Redford High School, vacant since 2007, and open a store on the property in late 2013 or early 2014.

The state’s credit is being joined by another $6.6 million in local and school tax capture. The estimated $22 million project would create nearly 100 full-time jobs. Whole Foods Market is also reportedly planning a store in the city.

PPT Eliminaiton And Revenue Replacement Still On Hold

2011-11-18T11:59:00.001-05:00

Although earlier reports had indicated an elimination of the state’s personal property tax (PPT) was on-tap prior to the year’s end, Michigan’s Lt. Governor Brian Calley and Senate Finance Committee Chair Jack Brandenburg (R-Harrison Township) have signaled that the debate will continue in January as the nine session days remaining in 2011 are quite crowded with agenda items.

The much-maligned tax on equipment is viewed by most as a deterrent to business investment for many reasons; however, it provides in the neighborhood of $1.2 billion in revenue to local units of governments and school districts.

A recent study conducted by the Anderson Economic Group of East Lansing found that nearly 40 local units rely on PPT-generated dollars for more than 30 percent of their revenue and that 13 of Michigan’s 83 counties receive more than 12 percent of their revenue from the same source.

The Governor is reportedly putting finishing touches on a plan that will gradually eliminate the PPT over several years, using the expiration of future years’ business tax credits for revenue replacement.

PAAdvisory Briefs

2011-11-18T11:52:00.004-05:00

Schor Makes House Bid Official

After considering a run for some time, Democratic Ingham County Commission Andy Schor has made his campaign for the State House of Representatives official through a YouTube announcement. Schor will be running for the 68^th House District, a seat being vacated by current Representative Joan Bauer (D-Lansing) in 2012 due to term limits.

Bolger Chases Jack

Speaker of the Michigan House Jase Bolger (R-Marshall) sent a gift package and invitation to Jack Daniels Distillery General Manager Tommy Bean in an effort to market Michigan as a potential new location for the Tennessee-based company. After reading of the possible tax increases the distillery may face, the Speaker touted Michigan’s move to the 6-percent corporate income tax and the world’s largest supply of freshwater.

Genesee County Parties to Choose Candidates

Officials from the Genesee County Republican and Democratic parties have 15 days from the certification of the election results of the evidently successful recall of State Representative Paul Scott (R-Grand Blanc) to choose their nominees for the February 28^th special election. The County GOP is reportedly set to meet Monday to select the Republican nominee while the Democratic party is working to set their meeting for after the Thanksgiving holiday.

Michigan Unemployment Rate Drops Again

Michigan’s unemployment rate dropped from 11.1 percent to 10.6 percent in October, representing the second consecutive month of decline. The number is a full percentage point lower than the October 2010 rate.

Client Corner

2011-11-18T11:51:00.004-05:00

PAAdvisory is excited to announce the addition of a new segment in select editions of our newsletter highlighting specific news from our clients. This week, we bring to you an article regarding the Michigan Association of Certified Public Accountants (MACPA), specifically their initiatives to leverage the expertise of the organization’s nearly 18,000 members to aid in Michigan’s economic turnaround.

MACPA Task Force Knee-Deep in Michigan Reinvention

In a very early response to the election of Michigan’s first CPA Governor, Rick Snyder, and his call for significant reforms, the Michigan Association of CPAs launched the MACPA Involvement in Michigan’s Turnaround Task Force. Leveraging the unique expertise and extensive knowledge of Michigan’s CPA profession, this new Task Force is effectively facilitating the involvement of Association members in the efforts of the Governor, the Legislature, and other organizations to restore Michigan to a state of fiscal stability and economic viability.

The Task Force sprung into quick action in the autumn of 2010 with their first project – providing the Snyder Administration, Business Leaders for Michigan, and the Anderson Economic Group with recommendations on how to create a “citizen-friendly” version of the comprehensive annual financial report (CAFR) for the State of Michigan. Assembling some of the state’s leading experts in governmental accounting and auditing, including financial professionals from local governmental units who have previously developed similar documents, the Task Force provided significant input that turned out to be fundamental to the Governor’s January 2011 release of the Citizen’s Guide to Michigan’s Financial Health.

In the Spring of 2011, shortly after the passage of the State’s fiscal year 2011-2012 budget, it was clear that Michigan’s local governments would be met with a new reality with regard to revenue and budgeting – and again, the MACPA Involvement in Michigan’s Turnaround Task Force went to work. In partnership with the Michigan Association of Counties, the Michigan Township Association and the Michigan Municipal League, a subcommittee of Task Force members developed an educational forum for local government financial managers and policy makers. Scheduled for Friday, December 2 in Lansing, the Local Government Leadership Summit on Financial Matters promises to provide tangible, applicable knowledge and best practices for change management and financial reform for local units.

Task Force and MACPA leadership met with Snyder Administration officials to identify specific topic-areas and initiatives in which the profession’s expertise would add value. This meeting resulted in the development of seven additional topic-area workgroups. Different workgroups are at different stages of their initiatives, some awaiting direction from the Snyder Administration and/or the Legislature, others having taken significant steps – but all are armed, ready, willing and able to volunteer their knowledge and expertise in adding the MACPA’s mark on Michigan’s turnaround.

Recall Effort Narrowly Successful, Takes Out Scott

2011-11-11T10:18:00.003-05:00

Representative Paul Scott (R-Grand Blanc) became the first Michigan lawmaker to be removed from office in a recall election in nearly 30 years after Grand Blanc voters supported the recall effort by around 200 more votes than those opposed. Two Democratic state senators were recalled in 1983 for voting to raise the state’s income tax.

Mr. Scott reportedly stated that evening that he would not seek a recount, accepting the results of the election. Wednesday, the House Education Committee hearing was cancelled when Mr. Scott, the panel’s now former Chair, indicated he would not be returning to Lansing for committee hearings or session.

The Michigan Education Association targeted Mr. Scott as the lead of the Republican Party’s agenda on education, expending considerably financial and other political resources to oust the second-term state representative.

Reaction from GOP leadership throughout the week indicated their view that the narrow election did not represent a mandate and that the reform agenda would continue moving forward.

Bullying Measure Amended In The House, Returned To Senate

2011-11-11T10:17:00.003-05:00

After a week of national attention being paid to the Senate-passed anti-bullying legislation, the House of Representatives passed an amended version of the measure Thursday without the controversial language.

As passed by the Senate last week, Senate Bill 137, sponsored by Senator Rick Jones (R-Grand Ledge), required school districts to develop and implement an anti-bullying policy but provided an exemption from bullying policies for statements made based on a religious belief or moral conviction. The exemption was dubbed a “license to bully” by Democrats and ultimately became the subject of national media outlets criticizing the move.

The House version removed the exemption and was also amended to allow school districts that currently have policies to maintain those policies, simply adding any missing portions under the new law.

The issue that began as the most significant disagreement in the Senate before the exemption was added last week continued during House debate – the issues of enumerating specific characteristics in the legislation, such as race, gender, or sexual orientation. The GOP caucus position is that the enumeration of specific characteristics could risk leaving some groups out of the intended protection.

The legislation now returns to the Senate for consideration of the House changes.

Tuesday's Election Results Of Note

2011-11-11T10:16:00.001-05:00

In one of the only state legislative races outside of the Scott recall vote, Oakland County Commissioner Tim Greimel has positioned himself well to win the February special election for the 29^th House seat by winning the Democratic primary over two opponents Tuesday. Bob Gray won the Republican nomination for the seat vacated by the resignation of former Representative Tim Melton.

Most requests for new or continued funding for locals in the form of millage requests were passed, despite Michigan’s still remaining economic challenges. Voters in municipalities such as Dearborn and Allen Park and school districts in Byron Center and Macomb County approved millage requests and borrowing authority measures.

Many former state lawmakers were successful in their races for local offices. Former State Senator Michael Switalski won a seat on the Roseville City Council, former Rep. Paula Zalenko will be the new Mayor of Burton and former State Representative Marty Griffin will again be the Mayor of the City of Jackson, a position he previously held.

Finally, the proposed changes to the City of Detroit Charter from the Detroit Charter Revision Commission passed.

Governor Declares Flint In Financial Emergency

2011-11-11T10:15:00.001-05:00

Just hours before polls closed and Flint voters re-elected Mayor Dayne Walling, Michigan Governor Rick Snyder stated that the City’s more than $25 million in deficits represents a financial emergency. The declaration is not immediately followed by the appointment of an emergency manager as, under the reform passed earlier this year in Public Act 4, Flint has seven days to request a hearing on the Governor’s findings. If a hearing is not requested, the City can also appeal the findings to the Ingham County Circuit within 10 days.

The review team dispatched to review the City’s finances provided their report to the Governor on Tuesday, showing that the City’s revenues continued to decline and, although the City’s expenditures also declined, they repeatedly exceeded said revenues.

Flint was under the control of an emergency manager less than a decade ago. If an emergency manager is named following Tuesday’s declaration, it will represent the largest local governmental unit with an appointed manager, while speculation continues that the City of Detroit will soon follow.

County Road Commission Dissolution Measure Moves To House Floor

2011-11-11T10:13:00.001-05:00

House Bills 5125 and 5126, introduced by Representatives Jon Switalski (D-Warren) and Dale Zorn (R-Ida), respectively, passed the House Transportation Committee Wednesday – marking the passage of the first two pieces coming from Governor Rick Snyder’s recent special message on infrastructure. The two-bill package provides county boards of commissioners to assume the authorities and operations of county road commissions.

The chair of the House panel, Representative Paul Opsommer (R-DeWitt), had a testimony- only hearing last week, drawing criticism from Democratic members of the Committee who wanted further testimony on the measures prior to voting Wednesday.

Despite the objections, and attempts at amendments by Representative Douglas Geiss (D-Taylor) to require approval of the county’s voters rather than the county board, the panel passed the as-introduced version of the package.

House Speaker Jase Bolger (R-Marshall) and House Minority Leader Rick Hammel (D-Mount Morris Township) reportedly both support the reform.

Paadvisory Briefs

2011-11-11T10:12:00.001-05:00

Patriotic Measures Clear Senate

The Senate passed two patriotic measures Thursday, the day before State Government is closed in recognition of Veterans Day. Senate Bill 637 requires K-12 students to recite the Pledge of Allegiance (unless parental objection exists), and Senate Bill 640 requires all American Flags flown at state and local government buildings be made in the United States.

McMillin Named House Education Chair

Representative Tom McMillin (R-Rochester Hills) was named interim Chair of the House Education Committee Wednesday, replacing recalled Representative Paul Scott (R-Grand Blanc). Rep. McMillin had been a member of the panel as well as Chair of the House Oversight, Reform and Ethics Committee – which he will continue to lead.

NITC Endorsed by Ohio Senate

The Ohio State Senate passed a resolution Tuesday endorsing the New International Bridge Crossing (NITC) from Detroit to Windsor across the Detroit River. The Republican-led Ohio legislative chamber cited the more than 300,000 Ohio jobs supported by US-Canadian trade.

Governor Receives Fireworks Legislation

Legislation permitting the sale of consumer-grade fireworks in Michigan has cleared all legislative hurdles and is now awaiting approval by Michigan Governor Rick Snyder. Representative Harold Haugh’s (D-Roseville) legislation, House Bill 4293, obtained final passage in the House on a 97-10 vote, and in the Senate 34-1.

Film Production Incentive Debate Ongoing

Senate Majority Leader Randy Richardville (R-Monroe) testified before the House Commerce Committee Thursday regarding his legislation, Senate Bill 569, that dictates how the $25 million appropriated for the 2010-2011 year will be spent on video game, film and television production projects. The measure overwhelmingly passed the Senate last week and is expected to move in the House after the Thanksgiving break.

Dettloff Joins Senate Majority Caucus

Having served in multiple staff roles, including as Chief of Staff to Senator Dave Hildenbrand (R-Lowell), Jennifer Dettloff is now the new Deputy Senate Majority Counsel.

State Retiree Benefit Changes Pass Amid House Floor Chaos

2011-11-04T10:46:00.003-04:00

Significant reform to benefits provided to State of Michigan retirees passed the House of Representatives Thursday as procedural maneuvers on the floor by both parties culminated in shouting matches.

House Bills 4701 and 4702 passed along party lines (63-45 and 63-44, respectively); however, it was the vote on immediate effect that caused the chaos. With Republicans and Democrats standing and shouting, Representative Paul Opsommer (R-DeWitt) granted immediate effect to HB 4701 on a voice vote. After considerable objection and request for a recorded vote on immediate effect, Democratic Floor Leader Representative Kate Segal (D-Battle Creek) submitted a letter containing the signatures of House Democrats; however, the recorded vote was not taken.

Prior to the votes, debate had already become contentious as Republicans and Democrats sparred over the substance of the reform. Proponents argue that the unfunded liability for the state in retiree obligations is already $10 billion – and growing, a sign of an unsustainable system. Opponents argue the reform is radical change that puts the future health of retirees at risk.

The package would require state employees on the defined benefit plan, or pension, to pay 4 percent of their salary toward their retirement, but would refund the 3 percent that those employees have been paying toward healthcare benefits (an issue currently being litigated). Additionally, under the reform, employees hired after January 1, 2012 will not get a matching contribution toward health care coverage.

Film Incentive Measure Moves

2011-11-04T10:46:00.000-04:00

The Senate passed a measure Thursday to provide the structure for the future of Michigan’s film incentive programs. Senate Bill 569, sponsored by Majority Leader Randy Richardville (R-Monroe), passed 34-4 with the four “no” votes coming from Republican Senators Mike Green (R-Mayville), Joe Hune (R-Hamburg Township), Arlan Meekhof (R-West Olive) and Dave Robertson (R-Grand Blanc).

The legislation creates the structure for awarding film incentives through the appropriations process, rather than refundable tax credits as were previously provided and eliminated by the tax reform measures pushed by Governor Rick Snyder earlier this Spring. The Film and Digital Media Production Assistance Program is created under the measure, and will award the incentives in a tiered structure created to favor companies employing Michigan residents and purchasing Michigan products and services.

The 2012 fiscal year budget currently contains $100 million in film incentives, with $50 million tentatively budgeted for fiscal year 2013.

Senator Bert Johnson (D-Highland Park) was successful in his attempts to gain approval on a couple of amendments regarding transparency, including a requirement that the fund report quarterly to the Legislature.

Anti-Bullying Measure Splits Senate, Passes to House

2011-11-04T10:45:00.005-04:00

Under legislation passed by the Senate Wednesday, school districts would be required to develop and implement anti-bullying policy. Senate Bill 137, sponsored by Senator Rick Jones (R-Grand Ledge), passed the Senate on a straight party-line vote of 26-11.

The content of a substitute version of the legislation adopted on the Senate floor; however, created significant and passionate disagreement from Democrats – as well as fallout continuing throughout the week. The disagreements began with Democratic arguments that specific characteristics should be enumerated in the legislation, such as race, gender, or sexual orientation. The GOP caucus position is that the enumeration of specific characteristics could risk leaving some groups out of the intended protection.

The most significant issue causing division of the upper chamber during debate, and subsequent fallout, was language included in the floor-adopted substitute providing an exemption from bullying policies for statements made based on a religious belief or moral conviction. While Republicans claim the measure represents a significant move forward, Democrats claim the exemption provides permission to bully under certain circumstances.

Subsequent to the bill’s passage, Kevin Epling, the father of East Lansing teen Matt Epling who took his own life in 2002 after being bullied and for whom the bill is named, criticized the legislation. Thursday, State Superintendent of Schools Mike Flanagan, also criticized the measure.

Senate Bill 137 now moves to the House for consideration.

Sweeping Changes to Workers’ Comp Pass House

2011-11-04T10:45:00.002-04:00

The House of Representatives passed legislation Wednesday providing for significant changes in the state’s workers’ compensation law. House Bill 5002, sponsored by Representative Bradford Jacobsen (R-Oxford), codified current case law and places greater limitations on benefits paid to injured workers.

The measure passed the House on a largely party-line vote of 59-49 with four Republicans, Representatives Mike Callton (R-Nashville), Kevin Cotter (R-Mt. Pleasant), Tom Hooker (R-Byron Center) and Ken Yonker (R-Caledonia), joining all Democrats in opposing the bill.

The first of the two most significant changes would require that workers make a “good-faith” effort to find other employment that is “reasonably available,” while leaving both terms undefined. The second places specific limits on the amount of benefits a worker is eligible to receive, setting the limit at 80 percent of the worker’s after-tax wages.

Speaking in opposition to the measure, Representative Jim Townsend (D-Royal Oak) noted that compensation insurance rates have decreased rather consistently in recent years. Senate Majority Leader Randy Richardville (R-Monroe) has indicated the measure will be addressed in the Senate after the November recess for deer hunting season and Thanksgiving.

Helmet Law Repeal One Step Closer

2011-11-04T10:44:00.003-04:00

The House of Representatives passed legislation 69-39 on Wednesday, moving yet another step closer to settling the 35-year fight to repeal the state’s helmet requirement. Senate Bill 291 will now move back to the Senate. Michigan Governor Rick Snyder has not yet indicated what will become of the proposal if it arrives on his desk.

The legislation would allow motorcyclists 21 years of age and older to go helmet-free provided they carry $20,000 in personal medical insurance coverage, the highest dollar amount requirement in the United States.

The motorcycle industry has been lobbying for a repeal of the law since 1976. Proponents of the measure claim an influx of riders would bring additional tourism dollars to one of Michigan’s largest economic sectors.

PAAdvisory Briefs

2011-11-04T10:44:00.000-04:00

Bloomberg Gives Michigan Positive Report

Bloomberg’s Economic Evaluation of the States has ranked Michigan second, a report Snyder Administration officials hope will aid in their efforts to encourage new business investment. Only North Dakota ranked above Michigan on the list; however, North Dakota was also the only state that achieved an improved economy between the 4^th quarter of 2008 and the 2^nd quarter of 2011. Michigan simply declined less than all other states.

Asset Test for Food Assistance Changed

The Michigan Department of Human Services, reportedly after receiving significant input from advocacy groups and case workers, have changed their standards regarding the treatment of vehicles in determining eligibility for the food assistance program. Persons with greater than $5,000 in assets or vehicles valued at greater than $15,000 were ineligible for food assistance under the policy effective October 1^st. Starting January 1, 2012, the new policy will provide for a one vehicle exemption from the asset test and a $15,000 value limit on subsequent vehicles.

Saugatuck Area Seeking Consolidation

A Consolidated Government Committee (CGC) representing residents in the City of Saugatuck and Saugatuck and Douglas Townships have presented the State with petitions signed by nearly 450 residents. State law requires 5 percent of the area’s population be included in the collected signatures – the CGC submitted signatures on behalf of roughly 8.5 percent of the more than 5,100 residents. Next step for the potential consolidation of the governmental units is the State Boundary Commission.

State Christmas Tree In-bound

Mr. and Mrs. Jerry and Beverly Kilburn of Houghton Lake have donated this year’s State Christmas Tree, a 61-foot blue spruce scheduled to arrive Saturday, November 5^th. The tree lighting will be Friday, November 18^th during the annual Lansing Silver Bells in the City festival.

Snyder Delivers Special Message on Infrastructure

2011-10-28T10:43:00.002-04:00

Michigan Governor Rick Snyder delivered his special message on infrastructure and transportation Wednesday from Lawrence Technological University in Southfield. Noting that the issues may not inspire the same level of passion as his messages on other items such as education, the Governor stressed the importance of no longer taking our infrastructure for granted.

The Governor’s remarks focused on three items, the potential consolidation of road commissions, an examination of the road funding formulas, and vehicle registration fees.

Road Commission Reform: Michigan has 617 road agencies; a number the Governor claims is too high. Snyder’s proposal would allow counties to transfer authority from road agencies to the counties themselves. Additionally, the message included criteria road agencies would need to meet to receive state transportation dollars, including competitive bidding on contracts and the development of management plans for federal highways and bridges.

Road Funding Formula Reform: Michigan’s current road funding formula, though extremely complicated, puts roughly 39 percent of Michigan Transportation Funds into the state’s hands, 39 percent into the counties’ hands, and 22 percent in the hands of municipalities. The Governor’s message, while providing little detail, calls for essentially scrapping the formula and starting over on a structure that will bring the highest funding to those roads with the most lanes, most traffic, and most travel through commercial areas.

Vehicle Registration Fees: While being careful not to specifically call for the increase, yet put it on the table in a self-described attempt to begin the discussion, the Governor described how a $120 per-vehicle increase in registration fees would raise nearly $1 billion for road funding.

The Governor’s remarks also included a reiteration of his desire for the Legislature to pass the New International Trade Crossing (NITC) authorization measures for a new span from Detroit to Windsor. Additionally, Snyder discussed his desire to replace the current 19 cent per gallon gas tax with a lower rate tax at the wholesale level.

State Employee Benefit Reform Measures Pass Committee

2011-10-28T10:42:00.005-04:00

The House Appropriations Committee passed legislation Thursday to reform state employee retirement benefits on party-line votes. House Bills 4701, sponsored by Representative Bill Rogers (R-Brighton) and 4702, sponsored by Rep. Chuck Moss (R-Birmingham) cleared the panel on identical 17-10 votes.

The most substantive portion of the reform would require state employees who are eligible to receive a defined benefit plan, or pension, to choose between freezing their pension and moving to a 401(k) style benefit or stick with their pension and begin paying 4 percent of their salary toward the benefit.

The objections of employee unions and Democratic Committee members were evident through the often hot-tempered hearing. Democrats offered seven amendments to the measures, all failing on party-line votes. Republicans and Democrats differed on issues from the very idea that there is truly a problem that needs to be solved by the reform, to the inclusion of overtime when pensions are figured.

Representative Earl Poleski (R-Jackson) won the only amendment, striking language that would allow certain retired employees to continue drawing pensions if brought back into employment by the State Budget Director, the Speaker of the House, or the Senate Majority Leader.

Senate Addresses Education Reform Legislation

2011-10-28T10:42:00.002-04:00

Only the controversial mandatory schools of choice (Senate Bill 624) and conversion schools (SB 620) bills remain unaddressed as the Senate took action Thursday on six more pieces of the Republican Caucus’ reform package.

Five of the measures, SB 621, SB 622, SB 623, SB 709, SB 710, passed 26-12. SB 621, sponsored by Senator Goeff Hansen (R-Hart) provides further opportunities for home-schooled and private school students to take classes in public schools. The other four would allow high school underclassmen to take college courses, as juniors and seniors are currently allowed to, as well as eliminate the course prerequisites and testing requirements often in place.

The vote on Senate Bill 619 was much closer, passing 20-18. The legislation, sponsored by Senator Patrick Colbeck (R-Canton) would eliminate the state’s limit on online schools, currently set at two. Republican Senators Tom Casperson (R-Escanaba), Bruce Caswell (R-Hillsdale), Roger Kahn (R-Saginaw), Mike Nofs (R-Battle Creek), and Tory Rocca (R-Sterling Heights) voted no.

House Commerce Passes Workers’ Comp Changes

2011-10-28T10:41:00.005-04:00

The House Commerce Committee passed legislation this week providing for greater limitations on the benefits received by injured workers. House Bill 5002, sponsored by Representative Brad Jacobsen (R-Oxford), cleared the panel on an 11-7 party-line vote, with Representative Marty Knollenberg (R-Troy) passing. Democrats attempted five amendments to the measures, all failing on party-line votes.

The legislation places specific limits on the amount of benefits paid to an injured worker at 80 percent of after-tax wages as well as requiring the injured worker make a “good faith” effort to secure other work if a total loss of earning ability was not suffered.

Further, the proposal seeks significant changes to the qualifications for workers’ compensation magistrates, requiring only that the individual be a member in good standing with the State Bar of Michigan having practiced for a minimum of five years.

House Receives Helmet Law Repeal

2011-10-28T10:41:00.002-04:00

The House Transportation Committee passed legislation 13-4 on Wednesday, moving a step closer to settling the 35-year fight to repeal the state’s helmet requirement. House Bill 4608 and Senate Bill 291 will now move to the House floor.

The legislation would allow motorcyclists 21 years of age and older to go helmet-free provided they carry $20,000 in personal medical insurance coverage.

Representatives Kevin Daley (R-Lum), Mark Ouimet (R-Scio Township), Wayne Schmidt (R-Traverse City), and Alberta Tinsley-Talabi (D-Detroit) voted against the bills.

PAAdvisory Briefs

2011-10-28T10:39:00.002-04:00

Wolpe Passes at 71

Former U.S. Representative Howard Wolpe passed away at his Saugatuck residence Tuesday at 71 years of age. Wolpe served in the Michigan House of Representatives until being elected to Congress in 1978 to a seat representing Kalamazoo, Battle Creek and western portions of the Lansing area. The Democratic Party’s gubernatorial nominee in 1994 had recently retired as a special advisor to U.S. Secretary of State Hillary Clinton.

Anderson Running for Congress

State Senator Glenn Anderson (D-Westland) has added his name to a growing list of candidates for the newly drawn 13^th U.S. House District. Current U.S. Representative John Conyers (D-Detroit), State Senator Bert Johnson (D-Highland Park), and State Representative Shanelle Jackson (D-Detroit) have previously announced their candidacy.

Scott Recall Decision Final – Will Appear on Ballot

The Michigan Supreme Court issued a decision bringing an end to the debate over the recall effort targeting State Representative Paul Scott (R-Grand Blanc). After last week’s Supreme Court ruling throwing out the previous Court of Appeals action and denying the stay of the November recall, Rep. Scott attempted one last effort, requesting that the Court delay the election until the next election on February 28^th. The Court denied the request and the recall will move forward on the November ballot.

Revenue Estimating Conference Set

House Fiscal Agency Director Mary Ann Cleary, Senate Fiscal Agency Director Ellen Jeffries, and State Treasurer Andy Dillon will determine revenue estimates for the current 2011-2012 and the upcoming 2012-2013 fiscal years at the Consensus Revenue Estimating Conference on Friday, January 13, 2012 at 9am. The numbers will be the basis for Governor Snyder’s budget recommendations expected in February.

State Employees Reach Agreement on Future Pay Raises

The State of Michigan’s roughly 35,000 employees will receive a 1 percent pay increase in fiscal year 2013 and a lump sum payment of 1 percent of base wages in fiscal years 2013 and 2014 under a tentative agreement reached between the State and the Coalition of Unions representing the employees.