December Legislative Report by Todd Tennis of Capitol Services
As 2017 comes to a close, we are halfway through the current two-year legislative session. The Michigan House and Senate have adjourned for the remainder of the year and will return to session on January 10. Before they left, they completed work on a package of bills aimed at making reforms to the state’s unemployment insurance system, said farewell to Representative Andy Schor who will step down to become the new Mayor of Lansing, and passed legislation creating an early warning system of sorts for municipal pension systems.
Rumors of Corrections Closings Abound
As we go into 2018, rumors have been rampant within the Michigan Department of Corrections that facility closings or layoffs or both may be imminent. While such rumors may be common outstate, in Lansing such talk has been muted or nonexistent. Legislators familiar with the MDOC budget have admitted that facility closures may be on the table for the next budget (which wouldn’t begin until October, 2018), there has not been any talk about anything happening before that. Even with those assurances, the Department has the authority to make major changes without Legislative approval. However, it would be highly unusual for an executive branch agency to do so without at least checking off with key legislators.
Reductions in prisoner totals have already caused closures and major policy changes over the past few years. It is very likely that we will see more of the same being discussed in the next budget year and it may even appear in the Governor’s budget recommendation due in February. We had hoped to give a more definitive answer regarding the current rumors, but at this point we cannot give a concrete statement that no closures or major staffing changes will happen soon - all we can say is that it is unlikely. Either way, though, we expect to see such proposals teed up for 2019 and beyond.
Legislation on Nurse Staffing Levels gets Hearing in House Committee
On November 29, the House Health Policy Committee heard testimony on a package of legislation aimed at improving nurse staffing levels in Michigan hospitals. House Bill 4629, introduced by Rep. Jon Hoadley (D-Kalamazoo), House Bill 4630, introduced by Rep. Stephanie Chang (D-Detroit) and House Bill 4631, introduced by Rep. Aaron Miller (R-Sturgis) seek to amend the Michigan Public Health Code to limit mandatory overtime for nurses and create minimum nursing staffing levels. Similar bills have been introduced over the past few legislative sessions but have not been able to achieve passage.
Representatives of the Michigan Nurses Association presented to the committee alongside the bill sponsors outlining the need for such legislation. Proponents of the legislation argued that chronic nurse understaffing along with the regular use of mandatory overtime is placing patients and staff safety at risk in Michigan hospitals. They also stated that voluntary efforts to improve nurse staffing levels and reduce the use of mandatory overtime have been unsuccessful to stem the problem.
Opposition to the legislation came from hospitals and health care associations such as the Michigan Health and Hospital Association who claimed that mandatory ratios set by the state would handicap their members’ ability to address varying health care needs of the patients. They stated that such decisions should be made at a local level and not set forth by the state.
The bills as introduced currently would not include state-run hospitals, but the bill sponsors have indicated to MAGE that is their intent to amend the bills so that state hospitals would also be included should the bills move forward. The bills are awaiting further action in the House Health Policy Committee.
Legislature Adopts Governor’s Task Force Recommendations for Public Pensions
Last spring, the Governor’s Task Force on Responsible Retirement Reform for Local Government (the Task Force) issued recommendations that called for greater transparency and oversight into municipal pension and retiree health care plans. The report stopped short of recommending broader state intervention that included state takeovers of public pension plans. Representatives from labor who sat on the task force had been hopeful that the Michigan Legislature would codify their recommendations in law.
However, soon after the Task Force released its recommendations, it was clear that some members of the legislature sought to make laws that went far beyond the agreement. Much of the summer and fall was spent with legislative leaders crafting a proposal that would have cleared the way for state takeovers of struggling municipal plans. Municipal employee organizations, including influential police and fire fighter unions, pushed back hard and lobbied against any legislation that would go beyond the Task Force recommendations.
Undaunted, Governor Snyder, Speaker of the House Tom Leonard (R-DeWitt), Senate Majority Leader Arlen Meekhof (R-West Olive), Senator Jim Stamas (R-Midland), Representative Thomas Albert (R-Belding) and Representative Jim Lower (R-Cedar Lake) pushed for legislation that would have created an “emergency manager-style” system where gubernatorial appointees could in essence take over struggling pension systems. Once in control, these bodies could take action to cut costs by reducing benefits, ending retiree health care cost sharing, and other mechanisms. The bills as introduced, (Senate Bill 686 and House Bill 5298 were the main bills in the package) also contained provisions to codify a pending court case that would make it easier to reduce retiree health care benefits for current retirees. An issue that was added to the bills that could have an impact on state employees was a provision to prevent any unit of government that had previously closed a pension plan from ever reopening it.
Local government employee groups objected strongly to the bills as they were introduced, insisting instead that only language agreed upon by the Task Force be passed. A battle raged around the Thanksgiving holiday where activists representing local government employees – especially police officers and fire fighters – bombarded legislators with phone calls and letters. Dozens of local government retirees made their way to the Capitol Building to stand vigil as legislative session often went late into the night.
Finally, on December 6, the House and Senate leaders pushing the controversial bills gave up and agreed to only adopt language appearing in the Task Force recommendations. Therefore, all of the additional language added by House and Senate leaders (including the prohibition on reopening closed plans) was stricken. The House and Senate each passed versions of those bills at approximately 2:30am on December 7. It was a huge win for local government employees, who avoided reforms that would have made collective bargaining over retirement issues much more difficult. The bills that went to Governor Snyder’s desk will create more transparency and oversight for local government retirement plans – something that will result in more action to address unfunded liabilities. However, the bills that passed will continue to allow local units of government and their employees to negotiate over possible concessions or revenue enhancements to pay for retirement obligations, as opposed to having Lansing dictate those decisions to them.