January 2014 Legislative Update
Civil Service Commission Approves New Contract with State Employee Unions
After deadlocking 2-2 on the impasse panel’s recommended civil service contracts in late December, the Michigan Civil Service Commission approved the recommendation on January 15. The new contract includes a 2% raise for unionized state employees for each of the next two fiscal years as well as a .5% of salary lump sum payment. The contracts also include changes in to employee health care benefits that had been opposed by state employee unions. MAGE and other organizations representing non-exclusively state employees had asked for a 3% wage increase for each of the next two years, and opposed the shift in health care plans, but were also given a 2% wage increase and .5% lump sum, and changes to the health care benefits.
The Civil Service Commission approved essentially the same wage and benefit changes for non-exclusively represented employees ( NEREs).
MAGE and representatives of state employee unions were outraged that state workers were being asked for further health care concessions at a time when the state has a large projected budget surplus (see separate article below). MAGE and state employee unions also called into question the need for health care changes, claiming that the state’s numbers on health care cost increases were inflated.
Rosy Budget Estimates Spark Feeding Frenzy
Recent news out of Lansing has been filled with discussions about the projected budget surplus along with debate on what to do with it. The most recent Revenue Estimating Conference concluded that Michigan’s General Fund and School Aid Fund will receive approximately $300 million more in 2014 revenues than was earlier predicted. The vast majority of this surplus ($290 million) stems from the School Aid Fund, with the remainder ($10 million) coming from the General Fund. Estimates for future years predict that the General Fund will grow much more rapidly in 2015 and 2016, with combined surpluses between the General Fund and School Aid Fund approaching $1.3 billion over the next three years.
While there will be numerous proposals to spend this surplus, three general areas have emerged as front-runners in the minds of Lansing policy makers: 1. Tax relief; 2. Road Funding; 3. School Aid.
While there seems to be bipartisan agreement to return some of the surplus to the taxpayer, the question of how best to do that splits sharply along partisan lines. Democrats have called upon Governor Snyder to undo his recent tax hikes on seniors and low-income working people by eliminating the pension tax and reinstating the Earned Income Tax Credit. Republicans seem to favor an across the board reduction in the Michigan Income Tax that would benefit both low and high wage earners alike.
Using some of the surplus to fund road projects and school aid is also being discussed. This will be a hotly debated topic as the Legislature begins working on the 2014-2015 budget process in February.
State of the State Address Short on Specifics
Governor Snyder presented his fourth State of the State Address on January 16. The Governor spent most of his speech reflecting on how the past three years have gone and what he has implemented thus far. Little was said about the Detroit bankruptcy and little of the surplus, and he offered few details on his plans for either issue moving forward. He did outline a few potential programs and policy proposals moving forward:
•Governor Snyder proposed a pilot program to test year round school, arguing that there needs to be a more uniform truancy policy and enforcement across the state. The Governor also suggested adopting policies recommended by the Michigan council of educator effectiveness, and proposed adopting the recommendations of the Mental Health Commission for School Safety Work Group for school safety programs.
Kalamazoo Area Lawmakers Seek Meeting with DCH on Kalamazoo Psychiatric Hospital Problems
•Governor Snyder unveiled a new initiative, the Michigan Office of New Americans designed to help new immigrants arriving in the state.
•The Governor talked about the potential for tax relief coming in light of the surplus, but no specifics.
•Governor Snyder suggested that more needs to be done to protect the environment and combat invasive species like the Asian Long-Horned beetle.
State legislators are looking into staffing problems occurring at the Kalamazoo Psychiatric Hospital. A meeting was scheduled between Representatives Margaret O’Brien (R-Portage), Sean McCann (D-Kalamazoo), Aric Nesbitt (R-Lawton) and Senator Tonya Schuitmaker (R-Lawton); representatives from the Department of Community Health (including Director Jim Haveman); and MAGE Labor Relations Director, John DeTizio along with several MAGE members. Unfortunately, this meeting, which was supposed to take place last week had to be rescheduled. We are hopeful that it will be rescheduled soon, since the ongoing issues at KPH present a danger to health and safety for both staff and residents there. MAGE; it’s members and lobbyists have also been in contact with each of the above lawmakers in efforts to resolve these issues.