24 September 2010

Michigan Legislators compromise to get Retirement Deal Done

Detroit Free Press

LANSING -- For months, Democratic Gov. Jennifer Granholm and Republican lawmakers pushed for an early retirement plan for state workers, similar to what public school teachers were offered this year.

Labor unions warned Democrats not to go along with the state worker plan, calling it an affront to collective bargaining.

The stalemate threatened to push the Legislature once again to the brink of an Oct. 1 budget deadline, or even a government shutdown.

But after several false starts, the House and Senate came to terms late Thursday night and approved a retirement plan they said will save the state general fund $80 million next year.

The Democratic House voted 60-45 to approve the measure -- largely with support from 42 Republicans -- and the Senate moments later voted 20-14 in favor of it.

No Senate Democrats supported the bill. Only 18 Democrats did in the House.

Without Democratic support, the Senate failed to get the needed two-thirds majority to give the retirement plan immediate effect. That could happen next week, when the Legislature is expected to put finishing touches on the rest of the 2010-11 budgets and erase a looming $484-million deficit.

House Speaker Andy Dillon, D-Redford Township, said the retirement agreement will shake loose the votes for aid to state universities and revenue sharing for cities, townships and counties and human services. Those budgets were locked up in the politics of the retirement bill.

Dillon said limiting to three years the extra money remaining state employees would have to pay for their health insurance -- 3% of their wages -- broke the stalemate.

He said that idea was proposed by one labor union, which he would not name.

An earlier proposal to phase in the 3% health insurance copay was opposed by Republicans. Democrats would not accept a permanent copay. The Legislature could change the provision at any time to either eliminate it or make it permanent.

Dillon said he preferred to phase in the copay and let the next Legislature and governor deal with the issue.

Some House members remained at the Capitol after the vote to work on the five remaining budget bills. Lawmakers have been under pressure to enact a full state budget by Oct. 1, the start of the new fiscal year, and avoid the kind of stalemate that resulted in a brief government shutdown in 2007 and 2009.

Granholm signed six more budget bills Thursday, including money for the State Police and aid to 28 community colleges. The Legislature has approved most of the overall budget, including the big-ticket budgets for school aid, Medicaid and corrections.

The transportation department budget was mired in a dispute over whether to build a second, publicly financed bridge over the Detroit River. The second span is opposed by the owners of the Ambassador Bridge, who plan to build their own second span next to the existing bridge.

State aid to 15 public universities is on hold because of a Republican proposal to require those that do stem-cell research to make detailed annual reports of the research -- a requirement Granholm and fellow Democrats oppose.

Budgets for the Department of Natural Resources and Environment and the Department of Human Services also must be approved.

Earlier this week, the Legislature sent to Granholm final budget bills for state prisons and the Department of Community Health -- a $14-billion budget behemoth that includes Medicaid.

The community health bill benefited from $650 million in onetime federal stimulus money, which prevented $49 million in cuts to mental health programs and reinstated dental, vision and podiatry care for Medicaid patients.

That onetime federal infusion, along with federal money used for public schools, will create a budget hole of $1.5 billion or more in 2012, when the money runs out.

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