Court of Appeals Decision Applies R-T-W to State Employees

In UAW v. Green, the Michigan Court of Appeals ruled Thursday that the Legislature has the authority to apply right-to-work rules to state employees. Plaintiffs had brought the case, representing state employee unions, arguing that only the Michigan Civil Service Commission can impose such regulations on classified employees.

The split decision was written by Judge Henry Saad, including the opinion of Judge Pat Donofrio. The dissent was written by Judge Elizabeth Gleicher.

As expected, conservative groups and Attorney General Bill Schuette praised the Court’s decision, while right-to-work opponents such as the UAW described the decision as purely political. The UAW also stated they are considering options, including appealing to the Michigan Supreme Court.

posted by PAA Online , Friday, August 16, 2013 9:58 AM
LINK DIRECTLY TO THIS ARTICLE

Pension Contribution Requirement Found Unconstitutional

In another decision the Court of Appeals issued Wednesday, hailed as a significant victory for state employees, the 2012 law requiring state employees to pay 4 percent into the pension system was deemed unconstitutional. In Michigan Coalition of State Employee Unions v. Michigan, the Court of Appeals found the law violates the constitutional provisions on classified employee compensation.

The law was passed as a significant reform to ensure the state’s retirement systems, especially for those still on the defined benefit pension systems, were properly funded. A spokesperson for the Department of Technology, Management & Budget stated that the State was reviewing the decision and considering an appeal to the Michigan Supreme Court. The State has 42 days to decide.

Since the law passed in April 2012, $59.1 million in deductions has been collected with the intent of being paid into the pension system, and the money will continue to be deducted according to the Department spokesperson.

Prior to the law passing, those state employees remaining in the defined benefit pension system contributed nothing to their retirement. The law provided employees in the defined pension systems with the option of contributing the 4 percent or joining the defined contribution system.

posted by PAA Online , 9:57 AM
LINK DIRECTLY TO THIS ARTICLE

July Unemployment Numbers Creep Upward

The Michigan Department of Technology, Management & Budget announced this week that the state’s seasonally adjusted unemployment rate moved up by one-tenth-of-one-percent in July to 8.8 percent.

With total employment holding essentially flat, the labor force increased by 9,000 and there were 10,000 new unemployed persons.

Although Michigan’s unemployment is a half-percent below the July 2012 rate of 9.3 percent, it still falls behind the national average of 7.4 percent. July is the second consecutive month of increase in the rate; however, economists point to the labor force continuing to advance. The labor force has increased by 1.5 percent, or 71,000 since July 2012 and has advanced every month in 2013.

posted by PAA Online , 9:57 AM
LINK DIRECTLY TO THIS ARTICLE

Senate Fiscal Agency Says July Revenues Down

The Senate Fiscal Agency stated that Corporate Income Tax revenue in July was down to the extent that it offset otherwise higher-than-expected revenues in several other areas, as compared to the May 2013 Consensus Revenue Estimating conference numbers. Corporate Income Tax (CIT) revenues were $74.9 million for July, $56.1 million below the estimated revenue level for the month.

Overall, July revenues were down $6.3 million dollars compared to expectations. General Fund revenues were $9.1 down while the School Aid Fund was up $3.9 million above expectations. The $1.8 billion total is a 1.2 percent increase from July 2012 numbers.

Revenues from sales tax, the now-repealed Michigan Business Tax (MBT), and the individual income tax were all above forecasted numbers.

Individual income tax collections from quarterly estimates have grown 9.2 percent over last year’s levels, netting $698 million in July 2013. The $6.2 billion collected year-to-date for the current fiscal year represents a 27 percent increase over the previous fiscal year.

Sales tax revenues totaled $681.6 million for July, a 9.9 percent increase over 2012 numbers. For the current fiscal year, total sales tax revenue is up 2.9 percent over last fiscal year, to $5.3 billion.

posted by PAA Online , 9:56 AM
LINK DIRECTLY TO THIS ARTICLE

August 9th Survey Results

In the August 9^th edition of PAAdvisory, readers were asked, now that the slate is set for the November General Election for Mayor of the City of Detroit, who do you believe will be the winner? 76 percent of readers believe former Detroit Medical Center CEO Mike Duggan will win the election, while 24 percent believe Wayne County Sheriff Benny Napoleon will be victorious.

posted by PAA Online , 9:55 AM
LINK DIRECTLY TO THIS ARTICLE

PAAdvisory Briefs

Hazel Park Schools Not in Financial Distress

Although state officials will continue to closely monitor the financial situation in Hazel Park Public Schools, the current situation does not rise to a level necessitating consideration of an emergency financial manager according to the Local Emergency Financial Assistance Loan Board. While the District’s budget deficit has become a larger percentage of overall budget in recent years, State Superintendent of Public Instruction Mike Flanagan determined the District’s deficit elimination plan will effectively eliminate the budget deficit by the 2014-2015 school year.

Financial Emergency Confirmed in Pontiac Schools

Governor Rick Snyder confirmed this week that a financial emergency exists in Pontiac Public Schools. This action gives local officials seven days to determine the next step: chose to have an emergency manager, agree to a consent agreement to resolve finances, seek a neutral evaluation process, or file for Chapter 9 bankruptcy protection. The review team found a nearly $38 million budget deficit for the 2011-2012 school year, a number that quadrupled in just three years.

Civil Rights Department Director Search Re-opened

Applications for Director of the Michigan Department of Civil Rights are again being accepted, until 5PM on Friday, August 23^rd. Some potential candidates were recently interviewed; however, the Civil Rights Commission did not make a hire.

Governor Appoints Three to Accountancy Board

Governor Rick Snyder announced three appointments to the State Board of Accountancy. Richard David of Bloomfield Hills was appointed to succeed Daniel Lord in a position representing the CPA profession. Ola Smith of Kalamazoo was appointed to a position representing academia, succeeding Thomas Weirich. Jennifer Kluge of Grosse Pointe Shores was appointed to succeed Steven Wolock in a position representing the public. All appointees are subject to the advice and consent of the Senate and expire June 30, 2017.

posted by PAA Online , 9:54 AM
LINK DIRECTLY TO THIS ARTICLE

Question of the Week 8/16/13

posted by PAA Online , 9:34 AM
LINK DIRECTLY TO THIS ARTICLE

This Week's Newsletter

Past Newsletters