Capitol News

September 2012

The legislature met on August 15 and used the day to act on some important legislation; ballot proposals were reviewed, challenged, and finalized; SERA testified in support of a bill - all in all a busy month despite the legislature’s absence most of the month.

Bolger-gate Continued

In response to the burgeoning investigations of potential election fraud by Speaker of the House Jase Bolger (R-Marshall) and Rep. Roy Schmidt (R-Grand Rapids), the House passed unanimously an election reform bill, HB 4709. It would make incumbents file for office two weeks earlier than non-incumbent candidates in races where candidates file via affidavit instead of petition signatures. The bill also allows an extension of two business days for a non-incumbent to file if a candidate withdraws and the ballot is left blank for that office. Democrats sponsored a successful amendment to extend the period of time ballots of military personnel serving overseas can be accepted if clerks miss the 45-day deadline for mailing ballots, which happened recently. However the bill does not outlaw offering to pay someone to run for office, which was the case when Rep. Schmidt offered 22-year old Matthew Mojzak $1,000 to run as a faux Democrat against him. A Democrat on the ballot would make it virtually impossible for a legitimate Democrat to run as a write-in and then campaign against Mr. Schmidt in November.

On August 22, Senate Democratic Leader Gretchen Whitmer and Michigan Democratic Party Chair Mark Brewer filed with the Ingham County Circuit Court a complaint and petition for an expedited investigation by a one-person grand jury. The nine Ingham Circuit Court judges voted to grant the request and empaneled a one-person grand jury conducted by Judge Rosemarie Aquilina, who was selected by a blind draw to lead the inquiry. Judge Aquilina can act as grand juror for up to six months with the potential for another six months if needed. She will have unlimited subpoena power and can hold any unwilling participant in contempt. All testimony before her, as well as exhibits submitted (like text messages, emails, voice mails), will remain sealed. She has the option at the end of the case of issuing a report finding no criminal guilt with the permission of the person involved. The Democrats have put up a Web site with a timeline, stories, and documents associated with the allegations.

School Retiree Reform Bill Signed

Also on August 15, the Senate and House took final action on SB 1040 to revise the Michigan Public School Employees Retirement System Act. Governor Snyder signed the bill on September 4.

The new law, P.A. 300 of 2012, gives school employees until October 26 to make a decision on whether they want to stay in retirement plan with the 1.5 percent multiplier and pay 7 percent of their income or continue paying 3 percent for their pension with a reduced multiplier of 1.25 percent. The third option is moving to a 401(k)-style defined contribution plan.

Current school employees wanting retiree health care will need to pay 3 percent of current pay. Or they can opt out. New employees will receive 2 percent additional pay for retiree health care they can put in their 401(k)s, but guaranteed retiree health care will no longer be provided.

Current retirees will pay 20 percent of the cost of their health insurance premium, up from the current 10 percent, if they are 64 or younger on January 1, 2013. For those 65 years old or older on that date, the premium would remain 10 percent.

Capping school district retiree costs at 24.46 percent of payroll and requiring a study to be completed by November 15 about moving all new school employees to a defined contribution system was included in the bill. The law is estimated to eliminate $15 billion out of the $45 billion in unfunded liability in the school retirees’ pension fund. The Wall Street rating firm Moody’s Investors Services said passage of the state’s school employee pension reform is a positive development for the credit rating of Michigan school districts.

The American Federation of Teachers – Michigan and the Michigan Education Association filed a lawsuit on Friday August 31 challenging the law’s constitutionality and sought an injunction against its implementation. Although the Office of Retirement Services promised to educate those in the Michigan Public School Employee Retirement System through 26 forums, 70 temporary telephone operators and at least one mass mailing to over 250,000 people, Ingham County Judge Rosemarie Aquilina issued a restraining order on the 52-day window that school employees were given to make a decision, saying it was too short a timeframe to make life-altering decisions. In a separate order, the judge also ruled that if the legislation is ruled unconstitutional at some future date, then the elections made by members will be void. A hearing is scheduled for November 28 on the constitutionality issues.

In a related matter, the Governor announced the administration will appeal the August 17 Court of Appeals decision holding the 3% deduction from school employee pay to finance retiree health care was unconstitutional. The Court of Appeals decision held the statute passed during the Granholm administration violates federal and state constitutional protections against state impairment of contracts, the taking of private property by the government without compensation as well as the constitutional guarantee of substantive due process. More than $508 million is in an escrow account pending final outcome of the litigation. The state earlier lost a similar challenge of a 3% deduction from state employee paychecks for retiree health care.

Ballot Proposals Finalized

After several trips among the Board of State Canvassers, the Court of Appeals, and the Michigan Supreme Court, five proposed constitutional amendments and one referendum survived for the ballot on November 6. The Michigan Supreme Court booted the 8-casino expansion proposal because it did not include wording in its petitions about how the guaranteed liquor licenses in the proposal altered the powers of the Liquor Control Commission.

Based on the order in which the petitions were filed, the referendum on the state’s Emergency Manager law repeal will appear on the ballot as Proposal 1; the union-led right to collective bargaining ballot proposal will be Proposal 2; the renewable energy ballot proposal will be Proposal 3; home health care will be 4; the two-third legislative support for a tax increase is Proposal 5; and requiring a public vote to build an international bridge is Proposal 6.

Here is the 100-word description approved by the Board of State Canvassers for the six ballot proposals:

Proposal 2012-1

Public Act 4 of 2011 would:

  • Establish criteria to assess the financial condition of local government units, including school districts.
  • Authorize the Governor to appoint an emergency manager (EM) upon state finding of a financial emergency, and allow the EM to act in place of local government officials.
  • Require EM to develop financial and operating plans, which may include modification or termination of contracts, reorganization of government, and determination of expenditures, services, and use of assets until the emergency is resolved.
  • Alternatively, authorize state-appointed review team to enter into a local government approved consent decree.

Should this proposal be approved?


This proposal would:

  • Grant public and private employees the constitutional right to organize and bargain collectively through labor unions.
  • Invalidate existing or future state or local laws that limit the ability to join unions and bargain collectively, and to negotiate and enforce collective bargaining agreements, including employees’ financial support of their labor unions. Laws may be enacted to prohibit public employees from striking.
  • Override state laws that regulate hours and conditions of employment to the extent that those laws conflict with collective bargaining agreements.
  • Define “employer” as a person or entity employing one or more employees.

Should this proposal be approved?


This proposal would:

  • Require electric utilities to provide at least 25% of their annual retail sales of electricity from renewable energy sources, which are wind, solar, biomass, and hydropower, by 2025.
  • Limit to not more than 1% per year electric utility rate increases charged to consumers only to achieve compliance with the renewable energy standard.
  • Allow annual extensions of the deadline to meet the 25% standard in order to prevent rate increases over the 1% limit.
  • Require the legislature to enact additional laws to encourage the use of Michigan made equipment and employment of Michigan residents.

Should this proposal be approved?


This proposal would:

  • Allow in-home care workers to bargain collectively with the Michigan Quality Home Care Council (MQHCC). Continue the current exclusive representative of in-home care workers until modified in accordance with labor laws.
  • Require MQHCC to provide training for in-home care workers, create a registry of workers who pass background checks, and provide financial services to patients to manage the cost of in-home care.
  • Preserve patients’ rights to hire in-home care workers who are not referred from the MQHCC registry who are bargaining unit members.
  • Authorize the MQHCC to set minimum compensation standards and terms and conditions of employment.

Should this proposal be approved?


This proposal would:

  • Require a 2/3 majority vote of the State House and the State Senate, or a statewide vote of the people at a November election, in order for the State of Michigan to impose new or additional taxes on taxpayers or expand the base of taxation or increasing the rate of taxation.
  • This section shall in no way be construed to limit or modify tax limitations otherwise created in this Constitution

Should this proposal be approved?


This proposal would:

  • Require the approval of a majority of voters at a statewide election and in each municipality where “new international bridges or tunnels for motor vehicles” are to be located before the State of Michigan may expend state funds or resources for acquiring land, designing, soliciting bids for, constructing, financing, or promoting new international bridges or tunnels.
  • Create a definition of “new international bridges or tunnels for motor vehicles” that means, “any bridge or tunnel which is not open to the public and serving traffic as of January 1, 2012.”

Should this proposal be approved?

Other News

Michigan SERA testified before the House Appropriations Committee in support of Senate Bill 797 which would amend the Public Employee Retirement System Act to make a series of revisions governing how state and local retirement system assets are invested. See our testimony on SERA’s Web site,

The special primary election in Congressional District 11 on September 5 to replace Congressman Thad McCotter was won by Tea Party favorite Republican Kerry Bentivolio in a 5-person race and Democrat David Curson. The winner on November 6 will serve out McCotter’s remaining term which ends December 31. McCotter resigned from Congress after failing to file enough nominating petition signatures amid fraud allegations. Irregularities were also discovered recently for McCotter’s 2008 and 2010 nominating petitions. Four McCotter staffers have been charged with election law violations.

State Personnel Director Jeremy Stephens has resigned and Chief Deputy State Personnel Director Janet McClelland is serving as the state’s acting personnel director while a search is conducted for a replacement.

Governor Snyder has given up on his hope of convincing the Michigan House to move on a bill to establish a state-run health care insurance exchange promoted in the federal health care reform law. If the state does not establish one, state businesses and individuals will have to use the federally-run exchange.

News of the Day

If you are a SERA member, you are eligible to receive News of the Day, a periodic e-mail about breaking news and media stories of interest to state employees and retirees. Write to giving your name and chapter.

Editor’s note: Mary Pollock is the newly appointed Lansing SERA Chapter and SERA Council’s Legislative Representative. She may be contacted at 1200 Prescott Drive, East Lansing, MI 48823-2446; Phone 517-351-7292; E-mail

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