David Hecker
President

Lois Lofton Doniver Secretary-Treasurer

Louise Somalski
Legislative Coordinator

May, 2007

Links to current Advocacy Campaigns
may be found in the Legislative Action Center

Budget Agreement-No Solution

Months ago Governor Granholm proposed a plan to fix the state budget that included a combination of cuts, reforms, and new revenues; protecting education and health care. However, the only solutions moving are cuts and accounting gimmicks. NOW, MICHIGAN IS IN SERIOUS FINANCIAL TROUBLE.

Accounting gimmicks such as delaying payments and moving money from one fund to another may deal with the immediate cash flow problem, but it does not solve what is a structural deficit. A real resolution to the budget crisis means some cuts, some reform, and raising new revenues.

The Legislature has agreed on a plan to balance the $803 million hole in this year's budget by using cuts, payment deferments, fund shifts, and by selling Michigan's future tobacco settlement revenue at a reduced rate.

This deal appears to balance the FY 2007 budget without a tax increase, however, it pushes at least $112 million into next year's budget hole that, at last estimates, is well over $1.8 billion. Using so many one-time revenue solutions is very risky, especially since the state's economic forecast is very bleak.

Legislation (HB 4850) is moving to deposit $202.8 million of the tobacco settlement sale revenues into the School Aid Fund. This fills this year's School Aid Fund gap preventing the $122 per pupil proration, but WHAT ABOUT NEXT YEARS BUDGET!

The House passed House Resolution 123 stating LEGISLATIVE INTENT (not binding) that the $400 million in securitized tobacco money is a safety net in case another solution is not found since Wall Street will not look favorably on this solution.

House Resolution 124 was also passed, stating LEGISLATIVE INTENT (not binding) to tap into roughly $100 million of unrestricted Higher Education Loan Authority money to prevent cuts to education and public health.

It also spares the state from having to take emergency actions to balance the FY '07 budget. Had they not taken action to balance the budget before June 1, the Governor would have had to cut school foundation allowances by $122 per pupil and cut Medicaid provider rates by 6 percent. State employee layoffs and emergency loans from various state funds also were in the cards.

The House and Senate overwhelmingly approved Senate Bill 436 (Jelinek, R-Three Oaks), a $307.6 million budget-balancing bill, which does not touch revenue sharing to local units of government, but does use $30 million in uncommitted 21st Century Jobs Fund money.

Following is a brief summary of THE EDUCATION REDUCTIONS contained in Senate Bill 436:

Community Colleges
Payment Delay - Delays second half of the August 2007 payment to community colleges until FY 2007 - 2008. (The first half of the August 2007 payment was delayed in Executive Order 2007-3.) This funding delay equals $12.9 million.

Merit Award Trust Fund Revenue Reduction
Fund Transfer - Moves $69.6 million to Health Plan Services from Merit Award Trust Fund revenues.

Education
Central Support Requires - A reduction of $65.0 million.
Early Childhood Operations - A reduction of $25.4 million.

Higher Education
Payment Delay - Delays second half of the August 2007 payment to universities until FY 2007 - 2008. (The first half of the August 2007 payment was delayed in Executive Order 2007-3.) This funding delay equals $69.4 million.
Operations Reductions - A reduction of $25.9 million.
Tuition Grants - A reduction of $2.1 million.

Senate Bill 436 has been ordered enrolled. The agreement will take several pieces of legislation to become official. Talks are still ongoing and there's still a lot of work to be done.

Senate Bill 436 may get Michigan through the immediate crisis, however, it is still no solution. We will be faced with the same or worse problems with the 2007 - 2008 budget. These kinds of political games hurt our state and hurt our future. Republicans and Democrats must sit down at the table with the Governor and negotiate a comprehensive long-term tax solution to the State's fiscal crisis. And they must do it now! These delays and cuts are sending the wrong message to those companies looking to invest in the state.

We would like to thank our members, the students, and the communities of Cedarville (Les Cheneaux) and Rudyard for coming to Lansing from Michigan's Upper Peninsula for a rally at the Capitol on May 16 urging a budget agreement that will provide adequate funding for education.

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MPSERS Changes

House Bill 4530 (Gonzales, D-Flint) would make two changes to the Michigan Public School Employees' Retirement System (MPSERS) for fiscal year 2006-07.

1. The first change would revalue MPSERS assets according to their actual market value as of September 30, 2006, for the purposes of determining the required amount of employer contributions. (Assets are currently valued by a five- year smoothing process.)
   
2. The second change would allow for an interest-only payment on the unfunded actuarially accrued liability (UAAL) for FY 2006-07, deferring the remaining payments for this fiscal year. For FY 2006-07, the UAAL contribution is 4.5% of the UAAL.

The revaluation of MPSERS assets would save the School Aid Fund $175.6 million. Savings to community colleges and universities would reduce General Fund expenditures by $5.4 million and $1.3 million, respectively.

The interest-only payment would create savings of $86.4 million in the School Aid Fund and $13.7 in the General Fund ($10.9 million for community colleges and $2.8 million for universities).

House Bill 4530 has passed the House and Senate and presented to the Governor's for her signature on May 24. Provisions contained in this bill will help prevent bigger cuts to K-12, Community Colleges, and Higher Education.

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MPSERS Benefit Cuts

Senate Bills 546 and 547 (Kuipers, R-Holland) would do the following:

• Increase the required contribution to the Member Investment Plan from 4.3% to 6.4% for a person who first became a member of MPSERS on or after July 1, 2008.
  
  
• Require all members aged 60 or older to have at least 10 years of service credit before beingcentitled to a retirement allowance.
  
  
• Require a person who became a member on or after July 1, 2008, to have 10 years of service before purchasing service credit.
  
  
• Provide new employees with a graded scale premium for retirement health care benefits at 3% coverage earned per year, reaching 90% after 30 years of full-time service.
  
  
• Remove current limitations on the benefit amount that a retirant may receive annually, and instead provide that benefits could not exceed limitations set forth in Section 415 of the Internal Revenue Code (IRC).
  
  
• Provide that if any section of the Act were held to be invalid or unconstitutional for any reason, the holding would not affect the validity of the remainder of the Act or the Act in its entirety.

Senate Bill 546 is tie-barred to Senate Bill 547. These bills have been approved by the Senate Education Committee and are awaiting action on the floor of the Senate.

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Suspend Public School Pension if Retirant is Re-Employed

House Bill 4799 (Wenke, R-Richland) would freeze retirement allowance payments of a retired public school employee if the individual is re-employed directly or indirectly, including but not limited to employment through a contractual arrangement with other parties, on or after January 1, 2008. The retirement payments would remain suspended during the period of re-employment.

If the retirant is directly rehired by a reporting unit, the retirant's retirement allowance shall be reduced by the lesser of the amount that the earnings in a calendar year exceed the amount permitted without a reduction of benefits under the Social Security Act or 1/3 of the retirant's final average compensation. This pension suspension provision would begin on the effective date of this bill.

Under House Bill 4799, until July 1, 2009 school retirees can be re-employed by a school district as administrators and teachers for up to six years - without a reduction in the retirement allowance - in school districts where there are critical shortages of eligible personnel to fill those roles. The retirant is not eligible to use any service or compensation attributable to this employment for a recomputation of his or her retirement allowance.

House Bill 4799 has passed the House and is currently before the Senate Education Committee.

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Collective Bargaining for Non-Instructional Contracts

House Bill 4533 (Meisner, D-Ferndale) would repeal the portions of Public Act 112 of 1994 that prohibits a public school employer and a representative of its employees from bargaining over the contracting out for non-instructional support services.

This bill would allow public school employers to bargain with a representative of its employees on the decision on whether or not to contract with a third party for one or more non-instructional support services; or the procedure for obtaining the contract; or the identity of the third party; or the impact of the contract on individual employees of the bargaining unit.

We would like to thank Ruby Newbold, President of the Detroit Association of Education School Employees, Leonard Zabawski, member of the Detroit Federation of Teachers, and Tracie McKissic, member of the Detroit Federation of Teachers for coming to Lansing to testify before the House Labor Committee on this bill.

House Bill 4533 has been reported out of the House Labor Committee and is stuck on the floor of the House for this year.

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Consolidation of School District Services

House Bill 4592 (Melton, D-Auburn Hills), would require that school district officials throughout the state conduct a study to identify opportunities for sharing services. School districts would be required to submit a report on the results of its study to the intermediate school district, in a form prescribed by the Michigan Department of Education, not later than six months after this legislation is enacted into law.

A school district's study and report would have to address possibilities for sharing at least all of the following non-instructional services:

• Student transportation for all classes of students and all types of programs
  
• Procurement of supplies and other purchasing
  
• Technology support services, including, but not limited to, information technology
  
• Any other non-instructional services identified by the superintendent of public instruction
  
• Human resources administration
  
• Professional development
  
• Accounting and other financial services
  
• Legal services
  
• Food and child nutritional services
  
• Event management
  
• Production printing and graphics
  
• Shipping and receiving services
• Any other services described in the code

The bill specifies that education services could be shared with other providers of similar services - such as an intermediate school district, or one or more other school districts or intermediate school districts, or other units of local government, or other programs designed to achieve cost savings. In making its report, a school district would be required to include a detailed description of the school district's cost per pupil for each of the services listed.

Within three months of receiving the report, an intermediate school district would be required to compile the reports received from its constituent districts, and submit a summary report on service sharing to the Department of Education.

Within two months of receiving the report from the ISDs, the Department would be required to compile the information, and submit a summary to the standing committees of the legislature having responsibility for education legislation.

House Bill 4592 has passed the House and is currently awaiting action by the Senate Education Committee.

As introduced, AFT Michigan strongly opposed House Bill 4592. However, with our lobbing efforts and help from our membership and the education community, we were able to get this bill revised to its current workable form.

We would like to thank Virginia Cantrell, President of the Detroit Federation of Teachers, Toni Clover, Executive Vice President, Detroit Federation of Teachers, Ruby Newbold, President of the Detroit Association of Education School Employees, Max Boettger, Onaway Federation of Teachers, Bill Randall, Lake City Federation of Teachers, Dara Knill, President of East Detroit Federation of Teachers, and Ken Reid, President of the Macomb ISD Federation of Teachers for coming to Lansing to attend and lobby the House Education Committee on this bill.

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Campaign Finance Law Revisions

House Bill 4628 (Miller, D-Mt.Clemens) would amend 30 sections of the Michigan Campaign Finance Law to, among other things:

• Transfer the regulatory responsibility for campaign oversight from the Secretary of State to the Director of Elections (who heads the Bureau of Elections in the Department of State).
  
  
• Revise report-filing deadlines for all campaign and ballot question committees, specifying an electronic filing deadline of 11:59 p.m. on the days that reports must be filed.
  
  
• Prohibit a candidate committee from paying a candidate.
  
  
• Regulate automated telephone and electronic mail political ads.
  
  
• Prohibit honoraria for all state elected officials.

House Bill 4628 has passed the House and is currently before the Senate Committee on Campaign and Election Oversight.

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Federal Grants List Updated

All AFT Michigan school districts qualified for the following grants and allocations are revised or added to other grants listed on our website at: http://www.aftmichigan.org.

2006 - 2007 Individuals with Disabilities Education Act, Mandated Activities Projects, Part B - This federal grant program is authorized by the Individuals with Disabilities Education Act of 2004.

2006 - 2007 Title I, Part A - Improving Basic Programs(Revised 2/13/07) - This federal grant program is authorized by the No Child Left Behind Act of 2001.

2006 - 2007 Title I, Part A - Regional Assistance to High Priority Schools - This federal grant program is authorized by the No Child Left Behind Act of 2001.

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Public Hearing for Special Education Rules

The Michigan Department of Education, Office of Special Education and Early Intervention Services will conduct public hearings to receive public comment on the following proposed administrative rules:
Special Education Programs and Services Administrative Rules (2007-015 ED)

The proposed rules will bring the administrative rules into alignment with the reauthorized Individuals with Disabilities Education Act and update outdated language. These rules are published in the June 1, 2007, Michigan Register. The rules are proposed to take effect upon the filing with the Secretary of State.

In addition, the Michigan Department of Education, Office of Administrative Law and Federal Relations will also conduct public hearings to receive public comments on the following proposed administrative rule:
Teachers' Tenure (2007-016 ED)

The proposed rule would expand the current interpretation of the term teacher to include teachers of students with speech and language impairment who hold any Michigan teaching certificate with an endorsement in speech and language impairment who are not classroom teachers but provide services to speech and language impaired students. The rule is published in the June 1, 2007, Michigan Register. The rule is proposed to take effect upon the filing with the Secretary of State.

Public hearings for both rule sets will be held at the following sites:

Oral or written comment may be presented in person at the hearing or submitted in writing by mail, e-mail, or facsimile no later than 5:00, July 20, 2007. All comment will be reviewed and considered in the final version of the rules. Comments may be submitted to the following:

If special accommodations are needed to participate in the public hearings, contact Meredith Hines at (517) 373-0924 or email at hinesm@michigan.gov by June 1, 2007.

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