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Links to current Advocacy Campaigns
may be found in the Legislative Action Center
Michigan's Budget Crisis
Legislature Cuttings Education Budgets
Next Year's Education Budgets
Public Employees Health Benefit Act
Lobby Day 2007
Michigan's Budget Crisis
Governor Granholm is scheduled to issue a proration letter to Michigan school districts announcing a reduction in the per pupil foundation allowance of approximately $122 and a reduction in payments to intermediate school districts of approximately $8 million or 1.84 percent. By law, the Governor is required to issue this letter warning of cuts giving the State Legislature thirty days to fill a $213 million hole in the School Aid Fund.
Months ago Governor Granholm proposed a plan that included a combination of cuts, reforms, and new revenues and protected education and health care. However, the Legislature has so far refused to consider a responsible mix of solutions.
Although the Legislature agreed to some cost saving measures that reduce a portion of the School Aid Fund shortfall, new revenue estimates show that tax collections are coming up short of expectations again, creating an additional shortfall of $151 million or more. This means a total shortfall of $213 million which is a cut of $122 per student, starting June 20, if the Legislature fails to act by June 1.
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Legislature Cuttings Education Budgets
The House and Senate passed Senate Bills 220 and 221 reducing all budgets including K-12 School Aid, Higher Education, and Community College as a means of balancing the State Budget. Senate Bill 220 was referred to Conference Committee until a final "deal" is reached. On April 30, Governor Granholm signed Senate Bill 221 to become Public Act 6 of 2007.
Senate Bill 220 reduces operations funding to 15 state universities by an amount equal to enacted FY 2006-07 funding increases compared to FY 2005-06 appropriations. It also reduces appropriations to the Agricultural Experiment Station and Cooperative Extension Service by 2.0% each.
Senate Bill 220 delays the remaining 1/2 payment of 15 state universities and 28 community colleges for August 2007. (Executive Order 2007-3 enacted on March 23, 2007, already delayed 1/2 of their August payments until next year.)
Senate Bill 221 includes an accounting gimmick that refigures the state's contribution to the Michigan Public School Employees Retirement System (MPSERS) that will save $262 million.
Because the state is losing students, state officials estimate that the state will need to give $21 million less to school in regular per-pupil grants and another $20 million less in special education payments, a combined savings of $41.25 million. The state will also restructure the interest it pays on several bonds, saving $40 million now, but costing more in interest later.
Senate Bill 221 also cuts ten new programs that were supposed to start in Fiscal Year 2007. This bill also moves the May State School Aid Fund payment to school districts from Friday, May 19 to Monday, May 21. This is necessary due to a state cash flow problem.
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Action Needed: Please contact your Legislators and urge their support of a comprehensive stable revenue solution.
For your convenience, new pre-written letters are available on our website: http://aftmichigan.org. Phone, e-mail, fax, or write your State Representative and Senator TODAY!
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Next Year's Education Budgets
Early in April, the House K-12, Community College, and Higher Education Subcommittees moved budget bills for next year into the full Appropriations Committee.
While these budgets are adequate, they are not supported by sufficient tax revenue. We feel there is no point reporting details of these budgets until the Legislature moves legislation that will generate enough money to support these proposals.
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Public Employees Health Benefit Act
In an effort to provide public employees with quality health care while effectively addressing escalating health care costs, AFT Michigan and the International Union of Operating Engineers, Local 547, are again working with various legislators to develop a proposal to significantly improve the delivery of public employee health care.
On April 19, Senate Bills 418, 419, 420, and 421 were introduced. This package of bills is called the "Public Employees' Health Benefit Act" which includes the following provisions:
State Sponsored Catastrophic Stop Loss Coverage
- A voluntary, state-sponsored program to pool catastrophic claims across participating public employers.
- The program will be funded through premiums paid by participating public employers and will offer multiple coverage options.
- The program will save public employers an estimated 40% of catastrophic premiums through the reduction of commissions, expenses, risk charges, and profit/contribution to reserves.
Comprehensive Health Care Purchased Through Coalition/Regional Pools
- Public employers will be encouraged to join together to form regional purchasing pools or to participate in local purchasing pools consistent with maintaining existing collective bargaining rights.
- Purchasing pools offer the opportunity for public employers to leverage the purchasing power of a coalition to obtain improved pricing of administrative services and the savings that accrue from self-funding.
Transparent Health Care Cost Information for Public Employer and Employees
- Public employers will have access to detailed claims information at the hospital and physician level, subject to meeting HIPAA regulations.
- Public employees will have access to information on the cost of physician and hospital health care services.
Disclosure of Hospital and Physician Performance on Measures of Quality
- Public employees will be provided information from credible sources on the performance of health care providers on measures of quality.
State-of-the-Art Programs to Improve Member Health
- Public employers will be encouraged to have state-of-the-art programs, based on national best practices for health promotion and disease management.
- Incentives will be developed in the state-sponsored catastrophic program for public employers who offer health promotion and disease management programs that reflect national standards.
Efficient Administrative Services that Leverage Industry Standards and Information Technology within a Comprehensive Environment
- A common set of administrative performance standards will be developed using industry standards.
- Administrators of health care plans for public employees will be benchmarked annually against these standards.
- Greater competition among administrators of public health care plans will occur as public employers seek to contract with administrators who meet or exceed the standards.
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Action Needed: AFT Michigan supports this Health Care Proposal and urges our members to contact their Legislators to vote "YES" on Senate Bills 418, 419, 420, and 421.
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Talking Points:
- This proposal will save public employers and employees' money spent on health care.
- It will maintain collective bargaining rights and the ability to negotiate health care coverage at the local level.
- The state will not mandate participation in the local insurance pools, but we are convinced that if employees exercise the option through collective bargaining, there will be significant health care cost savings.
- Participation in this plan will be open to all school districts, public school academies, intermediate school districts, community and junior colleges, public universities, and other public employers.
- This legislative proposal will provide employees and employers with health care claim utilization and cost data which can be used to make informed decisions about health care benefits and costs through the collective bargaining process.
- In total, we estimate school health care savings of 8% without reducing employee coverage. These are real dollars that can be used for programs and services to students and communities.
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Lobby Day 2007
Thirty-eight AFT Michigan locals were represented at Lobby Day on April 18, with nearly 185 members attending. Over 100 Legislators or their staff joined us for lunch. Members were updated on legislative issues as well as School Aid, Higher Education, and Community College Budgets. In the afternoon they met with Legislators either during lunch or at the Capitol and reported back to the members on the results of their meetings.
We owe our members from the 37th Senatorial District and Senator Jason Allen a huge apology. His name was inadvertently left off the list of appointments, although he had arranged to meet with our members at 2:00 p.m. Fortunately, some of his constituents were able to meet with Senator Allen, but we are very sorry for the oversight.
We do want to thank our members for their support of Lobby Day and suggestions made on the evaluation forms. These are very helpful to us in trying to make Lobby Day interesting and effective for our members. Thanks again for coming!
Don't forget to contact any Legislators who were noncommital with follow-up information on our issues.
We have tentatively scheduled Lobby Day 2008 for Tuesday, April 22 at the Lansing Center. We look forward to seeing you then!
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