May Legislative Report by Todd Tennis

May 7, 2018 Legislative Report by Todd Tennis of Capitol Servicies
 
The Michigan Legislature is back in session after the two-week spring recess.  Over the last month, House and Senate Appropriation Subcommittees have been holding hearings to review Governor Snyder’s budget proposal.  Last week the House passed its version of the 2019 budget and this week the Senate (as of this writing) will have done the same.  After each chamber rejects the other’s budget, each departmental budget bill will be placed into a conference committee where the final decisions will be made.  All appropriations will then be placed into two omnibus bills – one for school aid funding and the other for all other state funding – before being voted on in each chamber.  The full budgets will likely be on their way to the Governor’s desk by early June.
 
House and Senate Corrections Budget Both Include Facility Closure
 
The focus on this year’s MDOC budget has been the reintroduction of state workers performing food service.  However, what has not gotten as much attention is the fact that both the House and Senate have passed versions of the MDOC budget that call on the administration to close another facility.  The current year budget reflects savings from the sudden shuttering of the West Shoreline facility in Muskegon that took place several months ago, but both chambers have also slated savings in the 2019 budget for a presumed closure of yet another facility.
 
The Governor’s budget recommendation made waves in February when he called for an end to the privatized food service in Michigan’s prisons.  After a multi-year experiment that suffered from an unceasing string of scandals (maggots in food, contraband introduced to the population by private employees, sexual relations between prisoners and private workers, etc.) and a failure to realize promised cost savings, Governor Snyder called on the department to hire over 300 workers and once again have state employees provide food service to prisoners and staff.  The House concurred with the Governor’s recommendation on this point.  The Senate also concurred, but failed to provide additional funds needed to make the switch back to state-run food service.
 
The Governor did not call for an additional facility closure in his budget proposal.  However, both the House and Senate versions of the 2019 proposed budget would require the MDOC to close another facility.  The House version of the budget calls for a saving of $16 million from such a closure, while the Senate version expects a savings of $21 million.  Both chambers leave the decision as to which facility would be closed to the Department.  Rumors are flying around Lansing that the Ojibway Correctional Facility, which was the subject of closure rumors last year before Westshore was announced, may once again be in the crosshairs.
 
Final questions surrounding food service and a possible facility closure will be made in the next few weeks as House and Senate leaders – along with the Governor – make the final decisions on the 2019 state budget. 
 
Legislation Introduced to Strip Retiree Health Care from some Terminated State Workers
 
Back in 1994, legislation was enacted that would strip public employees of their pension benefits if they were convicted of a felony involving the misuse of public funds.  Recently, Representative Pete Lucido (R-Shelby Twp.) has introduced a bill that would potentially remove retiree health care for state and public school employees terminated for other, possibly non-criminal, offenses.  House Bill 5918 creates a new standard by which a state worker could forfeit their retiree health care benefits. 
 
Under current law, an employee in a public retirement system can lose their pension only if they are convicted of a felony involving misuse of public funds or involving the receipt of a bribe in their capacity as a public employee.  HB 5918 creates a new threshold for loss of retirement health benefits whereby they would be lost if an employee resigns or is terminated for cause of "willful and wanton neglect of duty."  That term is not defined in the act, but in civil law it generally means an act so reckless that the individual knew or should have known that it would result in an injury.  Not coincidentally, it is also a term that has been used in legal proceedings surrounding the Flint water crisis and the Nassar sexual assaults at Michigan State University.
 
Interestingly, the law passed in 1994 that would potentially strip a public employee of their pension benefits did not apply to retiree health care benefits.  That omission may be the impetus for the new bill.  The fact that the new bill creates a lower threshold for the potential loss of retiree health care benefits presents a problem for employees who may have been terminated for cause, but for whom the question of whether that cause constituted “willful and wanton neglect of duty” is in doubt.  Such descriptors often fall into a gray area, especially since the new threshold will not require a criminal conviction as the current law does. 
 
The bill was referred to the House Financial Liability Reform Committee.
 
Are Work Requirements for Medicaid Coming to Michigan?
 
In January of this year, the federal government granted the opportunity for states to apply for a waiver so that they could enact work requirements for Medicaid recipients.  Since then, nearly two dozen states – including Michigan – have applied for the waiver.  On April 19, the Michigan Senate passed legislation to implement such a program for Michigan Medicaid recipients.
 
The issue of work requirements for Medicaid is new, but work requirements for other types of government assistance have been around for decades.  President Bill Clinton received great acclaim for welfare reforms in the 1990s that called for work requirements for other types of public benefits.  Moreover, work requirements for public assistance received by able-bodied adults continue to be very popular among voters.
 
Senate Bill 897, sponsored by Senator Mike Shirkey (R-Clark Lake), was introduced in March and would require work requirements for the nearly 2 million Michigan residents who receive Medicaid.  Individuals would have to work at least 29 hours per week to remain eligible for Medicaid benefits – including the Medicaid Expansion plan (known here as the Healthy Michigan plan).  The bill has the potential to reduce Medicaid rolls in Michigan by hundreds of thousands.
 
As the bill worked through the committee and onto the floor of the Senate, it was amended several times to provide additional exemptions from the work requirements.  Examples of exemptions include caretakers of a dependent younger than 6 years old; caretakers of a dependent who has a disability that requires full-time care; caretakers of an incapacitated individual; and pregnant women.  More exemptions were included before the bill passed the Senate such as persons designated as medically frail, persons under age 21 who had previously been placed in foster care, and persons who had been incarcerated in the past six months.  The bill also includes “good cause” temporary exemptions for people who have experienced the birth or death of a family member living with them, severe inclement weather, temporary illness or injury as well as a family emergency including but not limited to a divorce or an incident of domestic violence.
 
Proponents of the bill, like Senate Majority Leader Arlen Meekhof (R-West Olive), stated that the bill will help people become self-sufficient.  Former State Representative Pete Lund who now is the Director for Americans for Prosperity-Michigan compared the new work requirements to those implemented for other types of public assistance in the 1990s and urged lawmakers to ignore the naysayers. 
 
And on this issue, both here in Michigan and nationally, there have been plenty of naysayers. 
 
First there are groups, like those who filed a lawsuit in Kentucky over that state’s work requirements, who claim that work requirements violate the original statutory intent of Medicaid and that of the demonstration project clause recently added to the law.  They fear that work requirements could jeopardize health care access to millions of Americans.  Dozens of scholars and deans of schools of public health at places like Yale, Colombia and UCLA have filed an amicus brief on that lawsuit arguing another point – that the loss of Medicaid eligibility could be devastating to the revenues that keep federally qualified health centers afloat. 
 
Another group of detractors warn that the administrative costs of implementing work requirements far outweigh any savings from reducing Medicaid rolls.  Jeff Myers, CEO of Medicaid Health Plans of America, said that "Rolling out new eligibility determination criteria will be administratively complex. For example, new information needs to be collected and tracked via new systems that need to be tested and installed, along with incurring new personnel costs to run them. The overall cost of this undertaking should be carefully considered by states before jumping on the bandwagon."
 
In Michigan, the Senate Fiscal Agency estimates that the ongoing annual costs of administering and tracking the work requirement would be $20-30 million.  Officials within the Michigan Department of Health and Human Services have privately estimated that the one-time cost to create a new tracking system could be in the hundreds of millions.  The Senate Fiscal Agency was not able to give a solid estimate of overall costs or savings to the state, but it did note that the state would probably receive a small net gain if caseloads were reduced in a similar fashion to other public assistance programs after work requirements were implemented.
 
Senate Bill 897 passed the Senate on nearly a straight party-line vote.  Senator Margaret O’Brien (R-Portage) was the only Republican to vote against the bill, joining a unified Democratic caucus in opposition.  Democrats offered a series of amendments, all of which failed.  They tried to include veterans, seasonal employees and caretakers for a child under 13 under the list of exemptions.  They tried to reduce the weekly hourly work requirement from 29 to 20.  They also tried to add a cost/benefit analysis for the legislation. 
 
Senator Curtis Hertel, Jr. (D-East Lansing) called the bill terrible policy, and stated that “People don’t choose to be poor,” and that many low-income individuals “work a lot harder than many of us in this chamber.” 
 
Senator Joe Hune (R-Whitmore Lake) offered a counterpoint to Senator Hertel by saying, “What I think is truly disgraceful is trapping people in a cycle of poverty and victimhood so that they have no choice but to relinquish their God-given freedom to certain politicians who genuinely disdain them.”
 
While it is not yet clear the exact impact the bill would have on the state budget, it is abundantly clear that opinions on work requirements for Medicaid fall along more philosophical lines.  Proponents feel that work requirements instill a work ethic that will lift people out of poverty, while opponents argue that such requirements are needlessly burdensome and will merely result in fewer people having access to health care. 
 
Nessel Wins AG Nod at Democratic Early Endorsement Convention
 
It what was a huge turnout for the State Democratic Convention on April 15 (particularly impressive due to the massive ice storm that paralyzed much of the state that day), Attorney General candidate Dana Nessel edged out fellow candidate Pat Miles in the hotly contested Democratic nomination.  Nessel’s supporters showed markedly higher enthusiasm levels leading up to the vote late that afternoon.  After a full day of speeches, caucuses, and hard campaigning, Mr. Miles announced his withdrawal from the AG race and urged support for Ms. Nessel. 
 
Nessel’s victory marked a rare defeat for the UAW and many other AFL-CIO affiliates on the convention floor.  Despite late endorsements for Miles by several large labor unions, they were not able to overcome the grass roots support for Nessel.  However, Nessel was not without several labor endorsements herself, including backing from the Michigan State Utility Workers Council, the Michigan Nurses Association and the Michigan Education Association.  The Democrats also nominated Jocelyn Benson to be their nominee for Secretary of State, and selected Megan Cavanagh and Sam Bagenstos to represent them in the non-partisan Supreme Court race. 
 
The Democratic and Republican Parties will make their nominations official at their August conventions.  Republican candidates for Attorney General are State Senator Tonya Schuitmaker and Speaker of the House Tom Leonard.  For Secretary of State, Republicans will choose between Stan Grot, Joseph Guzman and Mary Treder Lang to face Benson.  In August the Republicans will also officially nominate incumbent Supreme Court Justices Kurtis Wilder and Beth Clement to run for reelection to the Michigan Supreme Court.