Legislative Update

Call your legislators & tell them to protect teacher pensions

Republicans in Lansing are getting ready to launch a new round of attacks on working families next week, and we need to start fighting back right now.

These new bills are being pushed by the billionaire DeVos family to destroy pensions for newly-hired teachers, librarians, and bus drivers.

Call your legislator right now at 866-834-6910.

Tell them not to support any legislation that would take away pensions from teachers and school employees.

Destroying pensions would make it even harder to attract and retain the best and the brightest people to careers in public education. That’s bad for educators, bad for students, and bad for families.

Thanks to you, we were able to defeat these bills last December – and if we take action by calling our legislators right now, we can do it again.

Call 866-834-6910.

Tell your legislator to do the right thing.

Tell them to vote NO on any bill that destroys teacher pensions.

Dateline: Lansing Legislative Report

An update on legislation affection AFL-CIO unions and their families

Attack on Public Employee Pensions Coming in Lame Duck

Conservative business people and a right wing think tank are plotting to eliminate public employee defined benefit (DB) pensions in the lame duck session of the Michigan Legislature.

Currently, local government employees negotiate pension plans that range from defined benefit plans, where retirees get a fixed amount in a monthly check, or defined contribution (DC) plans, where employers put money in a worker’s 401k account. The down side of a 401k account is that it leaves a worker’s retirement security at the whim of the stock market. School employees are in a hybrid plan that combines elements of both systems.

Workers who retired in the midst of Wall Street’s crash in 2008 saw the value of their 401ks plummet, leaving them shortchanged in their retirement years.

The West Michigan Policy Forum, a gathering of conservative business people, recently identified cutbacks in public employee pensions as their number one public policy priority. Amway President Doug DeVos announced the group’s position, saying that it “sends a message to all our elected officials.” “We take these votes very seriously,” he said. The Mackinac Center, a conservative anti-labor group, has been pushing for a shift to defined contribution plans, just as they previously advocated for right to work laws.

So what’s prompting this attack on public employee pensions?

Proponents say the defined benefit plans are underfunded and that employees have to pay more into the system.

While it’s true that pension funds were hurt by the greed of Wall Street bankers in the economic downturn of 2008, the funds are working their way back to being fully funded, thanks to changes in the plans that have dramatically increased worker contributions.

Public Act 300 of 2012 placed all new school employees into a hybrid plan that blended aspects of DB and DC plans and eliminated their retirement health care benefits. The new hybrid system is fully funded. The State of Michigan put new hires into a DC plan back in 1997.

So what’s the real reason for the attack? Private sector employers don’t want to give DB pension benefits to their employees so they want to do away with DB plans in the public sector to discredit the idea. And private investment bankers stand to make a lot of money managing 401k plans under a DC system.

The fact of the matter is that DB plans are more efficient and give both management and labor more bang for their buck. A 2014 study by former state Treasurer Robert Kleine and former House Fiscal Agency Director Mitch Bean did a cost benefit comparison of DB and DC plans. The study looked at the potential impact of closing a DB plan and moving to a DC plan. It showed several interesting facts;

  • Investment returns are higher for DB plans…at least 1% annually. DC expenses are about .5% higher than with DB plans.
  • DC plans are more expensive to fund, according to the National Institute on Retirement Security (NIRS). The cost of funding a DB plan is 12.5% of payroll, while the cost of the same benefit under a DC plan is 22.2% of payroll.
  • DB plans have a significant positive impact on Michigan’s economy, supporting 71,894 jobs and $9.22 billion of economic output in the state, yielding over $519 million in state and local taxes, according to a 2012 NIRS study. The economic benefit of DC plans was about 20% less.
  • It is very expensive to transition from a DB plan to a DC plan. Depending on the rate of unfunded accrued liability, expenses will increase for 10-15 years under a DB to DC transition. Actual savings from the transition might not show up for 30 years.

Watch for introduction of pension legislation in the legislature after the November 8th election. Action could come quickly since the House of Representatives has only 11 session days scheduled after the election. The Senate has scheduled 14 session days.

Veteran Facilities Could be Privatized Under Legislative Package

A 4 bill package to create an authority to run the state’s veterans care programs has been introduced in the Michigan legislature.

Although designed to improve the quality of care for Michigan veterans, the package has a major flaw in that it gives the new authority the ability to privatize state veteran facilities.

Two recent Auditor General reports on the quality of management of state veteran facilities highlights the problems with privatized facilities. A February, 2016 audit showed that the currently privatized Grand Rapids Home for Veterans is riddled with problems of neglect and mismanagement.

The Auditor General found that management at the home routinely falsified records on staff response to fall alarms in resident rooms. Supervisory staff documented that 96-100% of fall alarms were properly checked out. However, surveillance videos showed that actual responses only took place 33% of the time. The private contractor did not meet required staffing levels 81% of the time and did not fill pharmaceutical prescriptions in a timely manner.

This is in marked contrast to the Auditor General report on the D.J. Jacobetti Home for Veterans in Marquette, a facility staffed primarily by state civil servants. The August, 2016 audit found no material conditions to report and gave the home an overall laudatory review.

SB 1097-1100 are currently in the Senate Veterans, Military Affairs and Homeland Security Committee. HB 5919-22 are currently in the House Military and Veteran Affairs Committee. Contact information for Senate committee members is available here and here for House Committee members.

Committee members should be encouraged to support amendments to the package that require the use of state classified civil service employees at veteran facilities, consistent with the Michigan Constitution and the rules of the Michigan Civil Service Commission.

Dateline: Lansing Legislative Report

An update on legislation affection AFL-CIO unions and their families

Straight Party Voting Cleared for November 8 Election

Straight party voting will continue to be an option for Michigan voters at the November 8 general election after a series of legal rulings rejecting appeals by Attorney General Bill Schuette to put the controversial law in effect for this year.

Passed by a partisan vote in the Republican controlled legislature last December and signed by Governor Snyder, the law was challenged last May in federal court.  The court challenge alleged that eliminating the time saving voting option would lead to longer waits in line to vote, particularly in predominantly African American cities, where straight ticket voting is more prevalent.

Demographic studies presented to the court by supporters of straight ticket showed that Michigan citizens in 15 cities voted straight party at rates in excess of 65%, including Highland Park (82%), Inkster (78%), Detroit (75%) and Flint (75%).

On July 21, U.S. District Judge Gershwin Drain issued an injunction against implementation of the law and ordered a trial on the merits of the issue.

In his opinion, Drain noted that even the supporters of the ban conceded that removing the straight ticket option didn’t prevent straight ticket voting, it prevented them from doing so with a single vote. “It seems the only purpose behind P.A. 268 is to require voters to spend more time filling more bubbles,” he said.

Schuette appealed to Judge Drain to reverse his ruling, which he declined to do. He next asked the Court of Appeals to reverse the ruling, but they voted unanimously against taking that course. He asked the entire district Court of Appeals to rule “en banc” against Drain, but they turned him down. Finally, Schuette asked the U.S. Supreme Court to rule on the matter, but they voted 6-2 against taking action.

Schuette finally conceded defeat and acknowledged that Michigan would use straight party voting for the November 8 election.

Dark Store Bill in Senate Committee

In 2010, the Michigan Tax Tribunal ruled that the Target store in Novi should be valued as though it were out of business or a “dark store” based on a new property assessment criteria.

This bizarre interpretation of Michigan law allowed big box stores across the state to pay little or no taxes, shortchanging local governments and leading to cutbacks in funds for police, fire and educational services.

Local governments have lost at least $100 million in revenue since 2013 due to this loophole!

And yet these same retailers expect local governments to continue to provide the services vital to a safe, high-quality community. Michigan counties spent $1.5 billion on security-related tasks in 2015 alone. The big box retailers put demands on public services, and yet have decided not to pay their fair share of the local property taxes to fund the services, leaving homeowners and small businesses to pick up the tab.

Rep. Dave Maturen, R-Indian Lake, introduced HB 5578 to help correct this inequity and ensure a fair and reasonable system of valuing property based on its “highest and best use” in the marketplace. The bill was approved overwhelmingly by the Michigan House last spring on a 97-11 vote and is now in the Senate Finance Committee awaiting action.

A Michigan Court of Appeals ruling against a big box retailer in the Upper Peninsula validates the case against the “Dark Stores” property valuation method, and the need for an immediate legislative fix to the problem.  In Menard, Inc. v. City of Escanaba, a three-judge panel said the Michigan Tax Tribunal made an error of law in accepting a dark store-style appeal by Menards and cutting the retailer’s value by more than half from the original assessment.

The decision is a significant victory for local governments and validates the reforms embodied in House Bill 5578.

Please contact your State Senator and urge them to pass HB 5578 in the few remaining days of legislative session this year. If the bill is not passed this year, it will expire and have to be re-introduced again next year.

You can get contact information for your Senator here.

You can watch a comprehensive documentary on this issue here.

Short House Likely in Lame Duck Session

The Michigan House of Representatives may be short-handed for the lame duck session of the legislature that takes place after the November 8thelection.

The 106th district seat will be vacant due to the tragic death of Representative Peter Pettalia, R-Presque Isle, who was hit by a truck while riding his motorcycle.

Several other seats may also become vacant if current term-limited legislators are successful in their attempts to get elected to local offices. At least three are running for township Supervisor seats and, if elected, would take office on November 20, missing most of the lame duck session.  Representative Charles Smiley, D-Grand Blanc, is running for the office of Grand Blanc Township Supervisor. Representative Kurt Heise, R-Plymouth, is running for Plymouth Township Supervisor and Representative Thomas Hooker is running for Byron Township Supervisor.

Two currently vacant seats in the House will be filled in special elections on November 8. Lauren Plawecki is the favorite to fill the seat held by her late mother, Julie Plawecki, for the remainder of 2016. Jewell Jones is the favorite to represent the 11th district for the 2017-18 term.

Patrick Green will likely replace former Representative Derek Miller, who resigned to become Macomb County Treasurer. Green will fill the remainder of Miller’s 2016 term and the 2017-18 term as well.

In the Senate, Ian Conyers is the overwhelming favorite to win the election to fill the vacant Senate seat in the 4th district.

Michigan AFL-CIO Statement on Gov. Snyder Signing Bill to Make Voting Harder in Michigan

Bill to eliminate straight-party voting “just plain wrong”

LANSING – Michigan AFL-CIO President Ron Bieber issued the following statement today commenting on Governor Rick Snyder signing Senate Bill 13, which will make voting harder in Michigan.

“This law will make it harder for people to vote in Michigan, and that’s just plain wrong,” said Ron Bieber. “Local clerks from all over the state testified that this bill will mean even longer lines at the polls this November – hurting our seniors, and voters who live in urban communities. It’s pretty clear that Governor Snyder and Lansing Republicans didn’t listen and don’t care. Instead of creating new barriers to the ballot box, they should be working to expand access to voting through no-reason absentee voting and expanded early voting. The people of Michigan deserve better.”

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