Lansing Update

Budget Update

Budget talks are moving very slowly with no evidence of progress.

· Senate Majority Leader Mike Bishop stands pat on his Senate-passed budget cuts (see attachment).
· Governor proposes an estimated $600 million in additional revenues.
· House is still sitting on its passed budget, which provides for a continuation budget for 2009-10, but lacks the revenues to fund it.

The stage is set for a repeat of 2007 with reforms being offered up for revenues in the dead of night. The question now is what those reforms might be. Possibilities include:

· Modification of PA 312 for police and fire.
· Modification of PERA.
· Failing schools reform.
· Creation of Neighborhood Public Schools
· Eliminate University charter caps.
· Certification changes.
· Changes to the Tenure Act.
· Public employee health care.

The attempt to gain additional revenue by the governor would provide an additional $200 million to the school aid fund, which would reduce the need to make cuts nearly in half.

The only good news is that August revenues were higher than anticipated. That means that only $75 million of the stimulus money padding that was placed into the 2008-09 budget will get used up instead of the prior projection of $134 million. While that helps, it will not cure the projected shortfall for 2010-11.

On the Reform Front

SB 336, SB 337, & SB 338 Awaiting Senate Action

The Senate Neighborhood Public Schools (NPS) package is on General Orders on the Senate floor awaiting action by the full Senate. The package includes SB 636, SB 637, and SB 638.

This package of bills allows for the creation of neighborhood public schools where a majority of parents and teachers agree to split the school away from the home district.

There is no limit to the number of NPS that can be created or chartered. Each of these schools would have less accountability, less transparency and more control than other charters. Teachers in an NPS school would be exempt from their bargaining unit and could not accrue tenure.

MEA opposes this package of bills.

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

Speaker Dillon’s idea is not a structural fix for the state budget. In fact, a state government takeover of all public employee health insurance would add about $4 billion in new financial liability for the health care of hundreds of thousands of local employees to the state’s long-term structural budget. Sec. 18 of HB 5345 creates a “MI health benefits fund” in the state treasury to collect premiums and pay plan expenses, putting the good faith and credit of state’s taxpayers on the line.