Kahn Introduces Much-Anticipated MPSERS Reform Bill

Senate Appropriations Committee Chair Roger Kahn (R-Saginaw) introduced legislation Thursday to overhaul the Michigan Public School Employees Retirement System (MPSERS). Senate Bill 1040 seeks to address the estimated $45 billion unfunded liability in the system by increasing employee contribution levels.

The work group that developed the legislation includes co-sponsors Senators Mark Jansen (R-Gaines Township), Phil Pavlov (R-St. Clair Shores), and Howard Walker (R-Traverse City). The Senate Appropriations Committee is expected to begin hearings on the legislation as early as next week.

MPSERS is structured with three tiers of retirement plans. The first, covering the majority of employees, is the Member Investment Program (MIP). The legislation proposes to increase the contribution from MIP participants from 3.9% to 8%. The second, the basic system, covers employees hired prior to 1990 and currently requires no contribution from participants. The legislation proposes to require participants to contribute 5%. The final tier, just two years old and implemented for new hires, would see very little change under the proposal.

The legislation also provides options for employees. Those wishing not to contribute the additional amount can chose not to do so; however, they will see a decrease in their pension multiplier from 1.5 to 1.25 percent of average compensation. Additionally, program participants could chose to freeze their pension at current levels, switch to a 401(k) plan and see no required contribution.

The legislation also makes significant changes to healthcare provided to participants. New hires, for example, would no longer receive state-provided health care insurance. Instead, the state would provide an amount equal to 2 percent of the employee’s salary into a 401(k)-style account for use upon retirement.

Current retirees would also see changes – potentially being required to contribute 20 percent of healthcare insurance premiums instead of 10 percent, and having to wait until age 60 to receive benefits.

posted by PAA Online , Friday, March 23, 2012 11:17 AM
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Oakland County Board Redistricting Case Heard by Supreme Court

Partisan Undertones Provide Backdrop

The Michigan Supreme Court heard oral arguments Wednesday in Houston v. Snyder – at issue is the ability of the State of Michigan to appeal the Court of Appeals ruling barring the Public Act that transferred reapportionment authority in Oakland County to the Board of Commissioners itself. Public Act 280 of 2011 will take effect next Wednesday and it is unclear if the Court will rule prior to then or not.

Prior to the law’s passage, county commission lines were drawn by an apportionment committee composed of the County Clerk, County Treasurer, County Prosecutor and the two chairs of the county’s political parties. For the first time in 2011, this committee had a Democratic majority and re-drew the lines, which were held up in court. Public Act 280 of 2011 designated the County Board of Commissioners as the apportionment committee, giving the authority back to Republicans.

Plaintiff Counsel in the matter has continued the argument that the new law is a local act as it only affects Oakland County and is therefore unconstitutional as it did not pass the Legislature with the required two-thirds majority in both chambers. The State’s attorney, meanwhile, maintains that the act could in fact affect any county that meets the population thresholds.

Additionally, the political undertone of the issue was a theme of exchanges between the Supreme Court Justices and the attorneys. Democrats had long argued that the passage of PA 280 was strictly a partisan maneuver, an argument that seemed to be strengthened by this week’s release of email communication among Oakland County officials and Republican House members discussing motives for the legislation.

posted by PAA Online , 11:16 AM
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City of Detroit Counter Offers

Detroit Mayor Dave Bing and members of the Detroit City Council provided the Snyder Administration with a counter-offer Wednesday to the proposed consent agreement released by the Governor. While the Governor remains in Europe on a trade mission, at least one member of his Administration has voiced optimism with regard to the participation of city officials.

State Treasurer Andy Dillon has indicated that he remains hopeful that the City and the State will be able to come to an agreement that prevents the necessity of an appointed emergency manager. He was also quick to point out that an emergency manager will be the only option if the courts prevent the financial review team assigned to the city from signing a consent agreement.

The City’s counter proposal calls for the State to provide better than $130 million in immediate funding to the City, to assist in the collection of taxes and to provide for the ability for the city to increase individual and corporate taxes. Additionally, while the Governor’s proposal transferred significant financial responsibilities to an appointed Financial Advisory Board, the City’s response provides for the Board to be advisory only.

The situation between the City and the State continues to develop despite the Governor’s overseas trip. Multiple rating agencies downgraded the City’s credit rating again this week as the result of anticipated cash shortfalls in the near term.

posted by PAA Online , 11:15 AM
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EM Law Still Under Judicial Fire

Two Ingham County Circuit Court Judges issued rulings this week that dealt potential blows to the now year-old emergency manager law, the much-debated PA 4. Both decisions were appealed by Attorney General Bill Schuette’s office later in the week.

Judge William Collette, who had previously ruled that the financial review teams dispatched to the City of Detroit and Highland Park School had met in violation of the Open Meetings Act, ruled this week that the review team and State Treasurer Andy Dillon cannot enter into a Consent Agreement until a further order is released from the Court.

Judge Rosemarie Aquilina, who had issued a restraining order last week against Flint emergency manager Mike Brown enjoining him from acting on behalf of the City, ordered this week that Flint Mayor Dayne Walling and the Flint City Council resume authority and that actions taken by Mr. Brown be invalidated.

posted by PAA Online , 11:15 AM
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Paadvisory Briefs

Autism Bills Begin House Action

The House Families, Children and Seniors Committee began hearing testimony on the three-bill package requiring private insurers to cover treatment for autism. Senate Bills 414, 415, and 981 sponsored by Senators Mike Green (R-Mayville), Tupac Hunter (D-Detroit), and Senate Majority Leader Randy Richardville (R-Monroe), respectively, passed the Senate last week and will continue action in the House next Tuesday.

Proposal Opens State Fair Land To Development

House Bill 4803 passed the House of Representatives Thursday and provides the State Administrative Board with the authority to convey or transfer the land to the Land Bank Fast Track Authority. The measure is sponsored by Representative Jimmy Womack (D-Detroit). The large property at Woodward Avenue and Eight Mile Road has been discussed for retail and housing development.

Legislature Supports FRIB Funding

Two members of the House of Representatives from the greater Lansing area announced their support Thursday for a resolution urging Congress to provide full funding for the Facility for Rare Isotope Beams (FRIB) at Michigan State University. The State Senate unanimously approved a resolution on Wednesday. The proposed federal budget for fiscal year 2013 includes funding levels of less than half that which is necessary to maintain the facility.

Senate Republicans Rally Behind Richardville

Amid calls from certain local Tea Party activists to remove Senate Majority Leader Randy Richardville (R-Monroe) from his post, all 25 other members of the Senate Republican Caucus delivered a standing ovation in a sign of support and unity this week. The Majority Leader is reportedly considering legal options based on the perceived threats by the activists.

posted by PAA Online , 11:14 AM
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