Capitol Chaos – Tuesday, Sept. 15

Budget Talks Heat Up

On Tuesday, in a radio interview, Majority Leader Mike Bishop announced that he and House Speaker Andy Dillon agreed to move forward with a 2009-10 fiscal year budget based on the Senate- passed cuts.

Under this plan, once the budget is completed, the House would consider tax increases to pay for the restoration of some spending. The Senate would consider any revenue proposals passed by the House. However, Mr. Bishop stated that there are no votes currently in the Senate Republican caucus to support a tax increase.

Later in the day, Senator Bishop clarified his morning comments by stating that there is no agreement on the budget. He did say, “We have an agreement on process and that is to get these conference committees moving and get some forward momentum on our ultimate goal. …All we’ve done is told our subcommittee chairs that they need to go out and negotiate using the cuts that we’ve put on the table.”

Mr. Bishop also said that he and Mr. Dillon agreed that if they are unable to complete a budget before October 1, they would pass a continuation budget to buy officials more time to craft a plan.

Appropriations subcommittee chairs planned to caucus today after session.

Our message remains to tell your legislator to say “no” to the disastrous Senate budget cuts.

Thank you to all members and staff who made calls to legislators today about the budget shortfall.

Just the Facts
Speaker Dillon’s Proposed Mandatory Government-run Health Plan

A mandatory state government-run health plan could actually make Michigan’s long-term structural budget deficits worse. Now is not the time to add billions more in financial liability at the state level. North Carolina’s $2.2 billion mandatory state health fund just needed a $658 million taxpayer bailout. As proposed in HB 5345, Michigan’s fund will be twice as large – making the financial risk twice as large as well. Other state government-run health funds are also in serious trouble. To keep funds solvent, New Jersey’s voluntary state health plan just increased premiums by 25 percent for participating school districts.

In addition to putting state taxpayers on the hook when the plan runs a deficit, Sec. 20 of HB 5345 also makes counties, cities, townships, universities, school districts and other local governments financially liable for any shortfalls. In testimony September 3 before the House, Speaker Dillon’s paid consultant said that when the state-run health plan ran a deficit, the state would bill local governments and school districts.

Committee Notice
Public Employee Health Care Reform Committee

More testimony is scheduled to be heard on HB 5345 on Thursday, September 17, 2009. The hearing will begin at 1 p.m. or after committees are given leave by the House to meet, whichever is later. The hearing will be held in room 519 of the House Office Building in Lansing.

Testimony will be given by the following:
Mike Flanagan, Superintend of Public Instruction, Michigan Department of Education
Brian Morris, Senior Consultant, Gabriel, Roeder, Smith & Co.
Richard Cauchi, Health Program Director, National Conference of State Legislatures
Wayne Cass, Chair of the Coalition of Labor Organization at Michigan State University