March 2016 Legislative Report

Grand Rapids Veterans Home Deficiencies Come to Light
 
Results of the latest report from the Michigan Auditor General on the Grand Rapids Home for Veterans sent shockwaves through Lansing for an administration still reeling from crises in Flint and Detroit.  The Auditor General found a number of material conditions at the home.  Most damning was a finding that, although the home reported a 100% completion rate for required daily checks on residents, an analysis of surveillance video footage showed that in fact less than 50% of those checks were completed.
 
The AG report also took issue with J2S, the contractor the state hired to operate the home.  The AG found that J2S regularly failed to meet contractual staffing levels, and failed to properly track and respond to complaints of abuse and neglect.  Michigan State AFL-CIO President Ron Bieber stated that “the tragic lesson from this failed experiment is that privatization simply does not work.”  However, state officials maintained that, although the transition had been “strained,” contracting out the operation of the home is still saving the state money.
 
The House Oversight and Ethics Committee held a series of hearings to review the AG report and make recommendations for further action.  Those recommendations include:
 
Establishing a rigorous protocol to respond to complaints and appeals of complaints;
 
Change in state law to require continuing inspections of the GR home and possibly creating a requirement to hold the home to similar standards as nursing homes;
 

• Review of the structure, board and makeup of the board of managers; 
• Review of budgeting process to ensure that funds are appropriated and used the way the Legislature intended;
• Changing the security camera program currently used by the home so footage can be viewed off-site;
• The review of contracts and employment overall and potentially instituting more competitive wages to attract the best employees.

 Representative Tom Barrett (R-Potterville), the chair of the House Military and Veterans Affairs Committee (and himself a veteran) has made a number of site visits to the home and plans to have his committee do further work on this issue.
 
Legislation Targets Overtime for Public Pensions
 
In March, Representative Pat Somerville (R-New Baltimore) sponsored House Bill 5438 which will affect local public pension systems in Michigan.  So far, the bill will not apply to state run pensions (like the State Employees Retirement System), but Rep. Somerville has indicated that it could be broadened to include state employees.
 
The main thrust of the bill is to limit pension calculations to only include base salary for employees.  For instance, accumulated but unused leave time or sick days could not be factored into the final average compensation of an employee, nor could any overtime pay.  The goal is to protect pension systems from circumstances in which an employee could bank a large amount of leave time or overtime hours and “cash them in” right before they retire to artificially inflate their pension benefits.  Such practices add to the unfunded liability of a pension system, since it allows employees to retain pension benefits to which contributions were not made. 
 
The impetus for the bill comes mainly from anecdotal stories about public pension recipients who, through strategic use of overtime and banked sick leave, end up receiving large pension benefits that sometime exceed their previous salary.  Most of these instances involve supervisors and managers who were better able to alter their work hours to maximize their pensions over the last few years of their careers.  They also tend to be more prevalent in police and fire fighter pensions systems since those are typically arranged to allow for retirement at an earlier age. 
 
While there is some merit to the bill from the perspective of protecting the solvency of public pension systems, the bill fails to distinguish between voluntary and mandatory overtime.  While some recipients could conceivably abuse the system by working a huge amount of overtime in their last years before retirement, there are other employees who are commonly required to work overtime throughout their careers.  Not only would these latter employees be negatively impacted by the bill through no fault of their own, the change might possibly create a perverse incentive for public employers to hire fewer employees and require more overtime from existing workers. 
 
The bill was referred to the House Financial Liability Reform Committee, of which Rep. Somerville is the chair.  He has stated his intent to begin hearings on the bill in late April.
 
Nursing Staffing Bill May Receive Hearing Soon
 
Last year, Representative Jon Hoadley (D-Kalamazoo) sponsored House Bill 5013 which aims to require “sufficient and registered nursing staff at all times to ensure patient safety.”  The bill would require hospitals to maintain minimum ratios of nurses to patients as well as prohibit the use of mandatory overtime (except in emergency situations) to fill staffing ratio requirements.  The bill at this point does not apply to state-run hospitals, but MAGE supports an amendment to add state-operated facilities to the requirements of the bill.
 
The bill was referred to the House Regulatory Reform Committee.  The committee chair, Representative Ray Franz (R-Onekama), has indicated willingness to hold a hearing on the bill for testimony only.  There is no promise to hold a vote on the issue, but Rep. Franz has stated a desire to begin a conversation over staffing issues in hospitals. 
 
Under-staffing and mandatory overtime have been issues repeatedly seen in state-operated hospitals.  MAGE members at the Kalamazoo Psychiatric Hospital have attempted to raise awareness on the issue for the last few years, but a state law providing for minimum staffing levels would be a strong tool to address this chronic problem. 
 
The House Committee has not yet announced a date for the hearing, but we are hopeful it will occur in April.

Todd Tennis
Capitol Services