State of the State Recap

Governor Rick Snyder focused on two main issues in his State of the State presentation on Tuesday: Flint and the Detroit Public Schools (DPS). In addition to those topics, the Governor discussed improvements to infrastructure and building a 21^st Century education and economy.

Flint

As expected, Mr. Snyder spent a considerable amount of time addressing the crisis in Flint. The governor was visibly emotional as he accepted the blame for the situation and expressed his desire to solve the problems. Highlights in his call for action are twofold: one, he sought approval from the Legislature for a $28 million supplemental appropriation for Flint (see below) and two, he disregarded his Michigan Freedom of Information Act right to exemption and released his emails regarding the situation to the public. Mr. Snyder acknowledges his part in the crisis, but feels the local and federal government failed as well. Specifically, he feels both the Department of Environmental Quality and the U.S. Environmental Protection Agency didn’t handle the situation properly. Governor Snyder sees a breakdown in communication in the chain of government to be an issue, and feels a united front is necessary to fix Flint. A long-term plan is expected in the Governor’s 2016-2017 fiscal year budget recommendation next month.

DPS

Governor Snyder proposed to split the Detroit Public Schools into one entity to handle the debt and the other leading the K12 educational programs. Moody’s released a report Friday stating that this would be a credit improvement. During his speech, Governor Snyder did not offer additional information on the situation regarding DPS, however actions have taken place since (see below).

Additional

Regarding infrastructure, Snyder spoke about creating a commission to make a report in September with recommendations regarding the state’s water lines, natural gas lines, sewage pipes, water pumps, electrical lines, etc. He also said he will be issuing an executive order for the Department of Treasury to collaborate with local officials and utilities on road projects. In the final portion of his speech, Governor Snyder recommended supporting the creation of a new center at the Willow Run Airport to test intelligent vehicles and supporting the building of a new lock built at Sault Ste. Marie.

Spectator reactions among spectators were mixed. Republicans praised the Governor and gave standing ovations while Democrats remained mostly silent during the speech. Republican leadership commended Snyder on his speech. Senate Majority Leader Arlan Meekhof (R-West Olive) regarded Governor Snyder as a “true leader” as he took blame for the situation and detailed ways to fix it. House Minority Leader Tim Greimel (D-Auburn Hills) did not share this opinion. Representative Greimel along with other Democrats felt the governor did not take enough responsibility for the situation. Meanwhile, during the speech roughly 1,000 protestors gathered outside the Capitol to protest the administration. Rally signs were displayed calling for the removal and arrest of the governor. The sentiment among the protestors was that Snyder was not doing enough with his $28 million supplement, referring to it as a “Band-Aid”. The protestors came with cowbells, horns, and others to draw attention. According to John Truscott, spokesperson for the Michigan State Capitol Commission, there was some damage to the Capitol building.

posted by PAA Online , Friday, January 22, 2016 12:08 PM
LINK DIRECTLY TO THIS ARTICLE

Flint Update

Following the State of the State address, Governor Snyder outlined his financial plan for Flint and requested additional funding in his budget proposal meeting. In response, the House has since passed a $28 million Flint water spending bill.

HB 5220 allocates this supplemental spending and is being described as the “next step” in addressing the Flint Water crisis. The bill now moves to the Senate, where Senate Appropriations Committee Chair Dave Hildenbrand (R-Lowell) intends to bring the bill up next week. This $28 million supplemental is in addition to $22 million in the General Fund allocated to the city of Flint. Spending items include: $2 million to support National Guard efforts, $935,000 to the Department of Education, $17 million for the Department of Heath and Human Services, $5.8 million to the Department of Environmental Quality, and $2 million to the Department of Licensing and Regulatory Affairs.

As steps are being made towards fixing Flint, Governor Snyder now faces two additional class-action lawsuits regarding the situation. The governor already has a lawsuit against him that was filed in November. These additional lawsuits are specifically targeting Snyder, the Department of Health and Human Services, and the Department of Environmental Quality and other government officials. These lawsuits seek compensation and damages for the legionella bacteria and lead-tainted water.

In the Legislature, Representative Ed McBroom (R-Vulcan) announced he would hold House Oversight and Ethics Committee hearings regarding the Flint water crisis. These hearings will likely begin in March following an audit of the Department of Environmental Quality’s Office of Drinking Water and Municipal Assistance as well as the final report from the Flint Water Task Force. Speaker Kevin Cotter (R-Mount Pleasant) commended Representative McBroom on holding these hearings, and believes these problems go beyond former DEQ Director Dan Wyant.

posted by PAA Online , 12:07 PM
LINK DIRECTLY TO THIS ARTICLE

Legislature Proposes DPS Bills

The Senate has introduced two bills aimed at reforming Detroit Public Schools, on the heels of State Budget Director John Roberts announcing the state will present it’s preferred method of paying off DPS’ debt at the governor’s budget presentation.

SB 710 and SB 711 do not identify a funding source in their language. SB 710 does, however, create a new community district to assume the operations of DPS, who would maintain a separate identity for levying taxes and paying debt. Once fully repaid, DPS would dissolve, but the current school board would be operational pending a newly elected board. An appropriation of $250,000 from the General Fund is included, but Senate officials said it is likely to be $250 million. There also is a provision regarding mandatory closures of certain schools if said schools are among the lowest 5 percent of all public schools in the state for three of the preceding five school terms.

SB 711 instead defines a “qualified school district” in the hopes of maintaining the old DPS to repay debts. It also establishes the financial review commission that will oversee the new Detroit Community Schools district. Both bills were sent to the Senate Government Operations Committee.

posted by PAA Online , 12:06 PM
LINK DIRECTLY TO THIS ARTICLE

Economic Update

The Senate Fiscal Agency reported that December tax collections were approximately $231.7 million below the estimate from the May consensus revenue estimating conference. Additionally, Michigan’s unemployment rate remains constant.

Tax collections remain lower mostly due to higher than expected Michigan Business Tax refunds and lower than expected sales tax collections. General Fund collections were $137.4 million below expected and School Aid Fund collections $83.1 million below. Net income tax revenue was 2.2 percent higher than last year, meaning a 3.3 percent increase in withholding payments. This reflected a 26.5 percent increase in income tax annual payments, however high income tax refunds, which were $17.5 million above prediction, offset these gains. The sales tax revenue decreased 8.4 percent and $109.8 million below expected levels in part due to a decline in vehicle sales and other taxable sales. Both the combined business tax collection from the Single Business Tax, MBT, and Corporate Business Income Tax, and the State Education Tax were below expected collections and real estate transfer tax collections were up.

The unemployment rate remained at 5.1 percent for December, down 1.3 percent from December 2014. Michigan’s labor force grew by 22,000 people and had 4.54 million people working. The number of unemployed was 246,000, up from November but down 60,000 from December 2014.

posted by PAA Online , 12:06 PM
LINK DIRECTLY TO THIS ARTICLE

PAAdvisory Briefs

Representative Glenn Diagnosed with Cancer

Representative Gary Glenn (R-Midland) announced he has been diagnosed with prostate cancer, but still will continue to serve in the Legislature. Physicians from the Mid-Michigan Medical Center in Midland have cleared Representative Glenn to continue working and give no medical reason for the representative to be unable to run in the next election. The filing deadline to seek reelection is in April. Representative Glenn has not announced if he plans to run.

Fire Marshal Secontine

Julie Secontine has been appointed as the fire marshal and director of the Bureau of Fire Services. Secontine has previously served as the Oakland County risk manager, a senior assistant corporation counsel for the county and a staff attorney to Oakland Circuit Court Chief Judge Barry Howard. Ms. Secontine earned degrees from Wayne State University and Michigan State University.

Commission Takes Over Education

A Commission for a 21^st Century Education has formed following the Governor’s recommendation in his State of the State Address. Superintendent of Public Instruction Brian Whiston and board President John Austin made the announcement that this commission will pick up where the Board of Education has left off. The commission is going to examine structure, governance and funding of education in Michigan, as well as examining the changes proposed to reform Detroit Public Schools.

posted by PAA Online , 12:05 PM
LINK DIRECTLY TO THIS ARTICLE

This Week's Newsletter

Past Newsletters