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Lame Duck Wrap-Up

Dec 20, 2014

December 19, 2014 Chuck Agerstrand MEA


Early Friday morning, the legislature completed work on a package of legislation that would raise over $1 billion for transportation infrastructure.  In addition, the package would raise $300 million in new revenues for public education and nearly $100 million for local governments.  All of the changes will be placed on a statewide ballot question in May of 2015.  If voters reject the plan, only the legislation regarding internet sales tax (known as the Main Street Fairness Plan) will remain in place.   The plan is made up of the following parts:

  *   The sales tax on gasoline will be eliminated (tax reduction of approx. $700 million)

  *   Michigan sales tax would be increased from 6 to 7% (tax increase of $1.34 billion)

  *   Increased driver registration fees and overweight truck fees (tax increase of $95 million)

  *   ‘Main Street Fairness’ legislation included in plan: companies with a ‘nexus’ in Michigan must collect sales tax revenue for online sales (tax increase of $40 million)

  *   Earned Income Tax Credit would be restored to 20% of the federal level (tax reduction of $260 million)

  *   Transform current per gallon motor fuel tax to a wholesale tax and increase the rate to raise $1.2 billion for transportation infrastructure

When factoring in the various tax increases and tax reductions, the plan would raise overall revenues by approximately $1.8 billion.  The new money, when fully phased in, would primarily be divided between roads and bridges ($1.3 billion); public education ($300 million); local government ($94 million); and public transportation ($112 million).  Other pieces of the agreement include:

  *   The School Aid Fund will be used only for k-12 and community colleges, not universities.  This reverses a trend started several years ago where up to $200 million was removed from the SAF to pay for university operations.  Commitments were made by the governor and legislative leaders to restore the lost funds for universities through the general fund

  *   The creation of a study to examine the true cost of education with the goal of providing a better indication of k-12 spending needs

While the House and Senate have been debating a final road package for weeks, in the end the ballot proposal passed overwhelmingly in the House but barely made it through the Senate.  Many Senators expressed concern that voters may shy away from such a complicated proposal.   Over the next few months backers and detractors of the plan will have the opportunity to sway voters one way or the other.

Religious Freedom Restoration Act Dies

Earlier last week, the House passed HB 5958- the Religious Freedom Restoration Act (RFRA).  As the last day of lame duck session approached, several Senators signed a letter urging Majority Leader Randy Richardville (R-Monroe) to take up the house passed version of the bill after he had told local media he felt there was no ‘fervor’ in his chamber for the issue.  The letter was signed by the letter’s author Senator Tom Casperson (R-Escanaba), Senate Minority Floor Leader Tupac Hunter (D-Detroit), and 13 other Republicans.

House Bill 5958, sponsored by Speaker Jase Bolger (R-Marshall), would limit Michigan government’s ability to infringe on one’s “sincerely held religious beliefs.”   Opponents of the bill, several of whom protested outside of the state capitol building this week, believe that the bill is essentially a license to discriminate, and will violate the civil rights of gay individuals, women, and others.  Supporting the bill, Ari Adler, spokesperson for Speaker Bolger, maintained that that it only requires that state or local government have sufficient justification for its action when infringing on someone’s religious beliefs.  The bill failed to move before the end of lame duck.

Medical Marijuana Legislation Goes Up in Smoke

Legislation that deals with Michigan’s medical marijuana dispensaries was recently discharged from Senate committee after lying dormant for months.  Michigan law enforcement held a press conference this week to voice their strong concerns with the legislation.  The Michigan Sheriffs Association, the Michigan Chiefs were joined by the Michigan Association for Local Public Health, who announced that they had formed a list of 19 new issues with the latest version of House Bill 4271.  One of the main components of the bill is to allow state-issued medical marijuana growers, or caretakers, to sell their excess marijuana.  Law enforcement has a major issue with the financial incentive aspect of the bill, and sees this as a loophole, with nothing stopping authorized growers from selling 100% of their marijuana, rather than using any for themselves.  The issue was ultimately not taken up.

Education Reforms Fail to Pass

Bills aimed at making numerous different reforms to public education were left behind as the legislature adjourned for the year.  These included bills to require mandatory repetition of third grade for students who fail standardized reading tests; expand the Education Achievement Authority; convert public school pension system (MPSERS) to a defined contribution scheme; require letter grading of public schools; and create an “early warning” system for schools in financial distress that would have placed hundreds of school districts on an accelerated path to an emergency financial manager.  Many of these bills passed one chamber or the other but House and Senate leaders were unsuccessful in reaching an agreement before the end of the 2014 session.  Public school employee organizations were generally happy to see these bills die.