Capitol News

December 2012

As I write this, lame duck session is in full swing and high priority legislation for the majority party is moving swiftly. Bills that are not approved by both houses before the end of December will die and have to be reintroduced in the next legislative session starting in January 2013 with 28 new House members.

Right To Work (for Less)

Hanging over everything was what the majority Republicans would do as a result of the defeat of Proposal 2 and Proposal 4 by a large margin on November 6. Those proposals would have ensured collective bargaining rights to public and private sector Michigan employees. Their defeat was taken as a message that the public disapproved of collective bargaining in general and emboldened those who want to prohibit union security provisions in labor contracts.

Former Republican gubernatorial candidate and multi-millionaire business owner Dick DeVos threatened to launch a petition drive to force a legislative vote or put the issue on the ballot. At the same time, Republican financiers like DeVos were assuring Republican officeholders that if they faced a recall threat for supporting Right to Work (RTW) legislation, they would help to bankroll defensive campaigns. Around 150 protestors in Grand Rapids swarmed the lobby of the Amway Grand Plaza Hotel and at the Windquest Building to protest DeVos’ involvement in pushing RTW. The Michigan Chamber of Commerce took a pro-RTW policy position and TV ads espousing “Freedom to Work” were posted. Even national anti-taxer Grover Norquist was putting pressure on Republicans to take the leap.

All was revealed on Thursday, December 6 when the Governor finally announced that he moved his position of “Right to Work is not on my agenda” to “I support Right to Work legislation.” That same day labor law bills were discharged from committee on the floor of each house and used as vehicles for substitute Right To Work bills ((SB 116 (S-3), HB 4003 (S-8), and HB 4054 (H-1)). Using this method means that no hearings were held on the bills where members of the public, especially unions, could testify about the legislation. In the House, amendments on third reading require support and the Speaker ruled there was not sufficient support to take a vote to consider the four amendments offered though more than 20% of members clearly called for a vote. Senate rules permit more open debate and 20 amendments were offered and debated, all to defeat.

The substitute bills make it illegal to require members of a collective bargaining unit to pay union dues as a condition of employment. Because there is a provision in the substitute bills to appropriate funds to the Department of Licensing and Regulatory Affairs to implement the new law, the law cannot be repealed through an initiative petition referendum by voters. Making the home of the United Auto Workers a Right To Work state is a major achievement for employer and business interests. Employee wages, benefits and workplace rights are usually less in the 23 Right To Work states.

About as interesting were the activities outside the chambers where demonstrators filled the Capitol Building causing its temporary closure. Democrats went to court and obtained an order from a local judge to reopen the Capitol Building. Some clashed with Right To Work advocates outside trying to have their own demonstration. Several people were arrested for rushing the doors of the Senate.

A recent poll conducted by MIRS/Practical Political Consulting found that 23 percent of public employees would withdraw from their union if offered an opportunity to do so, though only 16 percent supported a Right to Work law. An EPIC/MRA found that while Gov. Rick Snyder’s job approval is on the rise, passage of RTW could impact how voters would view the governor. Specifically, the survey found if Snyder were to sign RTW legislation, 40 percent of Michigan voters would be less likely to vote for him, while 24 percent would be more likely and 31 percent of voters saying it wouldn’t impact their decision to re-elect him. Capitol pundits are speculating that the RTW battle will help Senate Democratic Leader Gretchen Whitmer’s chances at a gubernatorial run in 2014. A new labor relations era awaits.

Other Lame Duck Issues

Blue Cross Blue Shield Reform — Currently there is a special statute creating BCBS as a non-profit insurance company that has to take all individual customers without regard to pre-existing conditions. As a result, BCBS of Michigan has 71% of the individual insurance market, a near monopoly. The federal Affordable Care Act will require all insurance companies to serve customers without regard to pre-existing conditions, making it necessary to change the Michigan statute. The new law, SB 1293 and 1294, will transform BCBS from a tax-exempt non-profit to a non-profit mutual insurance company that would compete directly with other health insurance companies in the state. It is expected that this will generate $100 million in tax revenues to the state. One provision will require BCBS to put $1.5 billion into a foundation, the funds from which would be used to continue a subsidy for Medigap insurance rates until 2016. Another provision would abolish “most-favored nation” provisions that BCBS routinely used to require medical providers to give BCBS a discount or charge more to non-BCBS insurers. Yet another provision prohibits abortion coverage in health care insurance except by separate rider. Currently 87% of all policies cover abortion.

Health care insurance exchange — The federal Affordable Care Act requires a health care insurance exchange where individuals and small businesses can compare policies and buy health insurance. The Governor and the Michigan Senate wanted the state to design and run the exchange with help from available federal grants, but the proposed bill failed to pass the House Health Policy Committee. Opposition there was based on opposition to big federal government intrusion in general, and Obamacare in particular. As a result, state residents will be using a joint federal-state designed health care insurance exchange rather than a Michigan controlled one.

Emergency manager law — SB 865 will likely replace PA 4 of 2011 that was repealed by a public referendum last month. It provides communities with four options to get out of financial distress: an emergency manager, a consent agreement, mediation or municipal bankruptcy.

Personal property tax — Repeal of the PPT was a high priority to business in Michigan, second only to repeal of the Michigan Business Tax accomplished in 2011. The PPT is a tax on industrial and commercial equipment and furniture, which is considered by some as a disincentive to do business in the state. However, elimination of the PPT reduces revenue to local government about $1 billion. The reform is a package of 12 bills, the full effect of which is dependent on a 2014 vote of the public on changes to the use tax (and even then the full effect will not be in place until 2016).

Regional transit authority — The metro Detroit area needs a regional transit authority to coordinate the disparate public transportation systems. It has been tried 24 times in the Legislature during the last decade, but the disagreements over who will control the authority have led to failure. Finally SB 909 sponsored by Upper Peninsula Senator Tom Casperson with bi-partisan co-sponsors passed both houses, but without votes from House Democrats who were protesting RTW legislation by withholding their votes.


Driving permit — Legislation to permit, but not require, a physician or optometrist to report to the Secretary of State or warn a third party about a patient’s mental or physical qualifications to operate a motor vehicle has passed both houses and will likely be signed into law. SB 402 and 403 would amend the Public Health Code to permit a report the potential of “an episode,” defined as (1) an experience derived from a condition that causes or contributes to loss of consciousness, blackout, seizure, a fainting spell, syncope, or any other impairment of the level of consciousness; (2) an experience derived from a condition that causes an impairment of an individual’s driving judgment; or (3) an experience derived from an impairment of an individual’s vision. It would trigger an examination of a driver’s physical and mental qualifications to operate a motor vehicle safely. The physician or optometrist must recommend a period of license suspension of at least six months in the case of a patient holding an operator’s license, and at least 12 months in the case of a patient holding a commercial license. The bill would provide immunity from criminal or civil liability for a physician or optometrist who reported or chose not to report to the secretary of state or warn a third party.

Prison guard retiree re-employment — HB 5881 (H-3) has passed the House and Senate Committee at this writing and likely to clear the Senate and be signed into law. It would amend the State Employees’ Retirement Act to add an exemption to the prohibition against concurrently drawing a pension from the State Employees’ Retirement System (SERS) and drawing an active employee paycheck from the State. Under current law, two exemptions allow State retirees to concurrently draw a pension while working for the State as a rehired employee after retirement: 1) health care workers in the Michigan Department of Corrections (MDOC), or 2) special assistant attorney general who possesses specialized expertise. The bill would add a third exemption for certain MDOC retirees.

Specifically, the bill would allow a retiree to return to work for MDOC and concurrently draw a SERS pension until September 30, 2013, if the retiree met the following conditions: 1) the retiree was hired to provide for the custody of individuals under the jurisdiction of MDOC; 2) the retiree’s position was limited in term, no benefits were paid, and the pay was not more than 80% of the maximum hourly wage granted during fiscal year (FY) 2012-13 for the same position; 3) the retiree worked no more than 1,040 hours in a 12-month period of State employment; and 4) the retiree retired after a bona fide termination of employment.

Investments — On December 5, the Governor signed SB 797, now PA 347 of 2012.  While primarily affecting local government pension plans’ fiduciary responsibilities, the bill also permits more latitude for investments of funds in all public pension funds, including the state employee pension fund, and prohibits some political contributions from vendors. Michigan SERA supported the bill.

Election hi-jinx investigation — The Secretary of State’s investigation of Rep. Roy Schmidt’s (R-Grand Rapids) party-switching fiasco was issued, finding no violation of state campaign finance laws. The one-person grand jury investigation of the matter is still pending.

The Joe — Both houses have passed HB 5463, legislation paving the way for Mike Ilitch’s new $650 million project in downtown Detroit to replace the current Joe Louis Arena.

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 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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