by Gongwer News Service
December 08, 2008

Anticipating that it will take at least three weeks in December to tackle the priorities left on their to-do list, lawmakers packed their schedules last week, hoping to wrap up in lame duck issues such as a ban on workplace smoking, a compromise on Blue Cross insurance deregulation, and building better transportation and schools in Southeast Michigan.

Then, of course, the whole schedule may have been tossed into the proverbial cocked hat when Senate Republicans said they would act only on budget cuts before taking up any other issues. How that will be resolved is as yet unknown, but until it is, some of the issues lawmakers could look at include:

• After nearly two years, a bill to mandate smoke-free workplaces in Michigan finally made some headway in the House last Wednesday as the chamber paved the way for legislation to go into conference committee in order to sort out differences between the House and Senate versions of the bill.While rumors have been swirling around the Capitol that the legislation will get a vote during lame-duck session, Senate Majority Leader Mike Bishop (R-Rochester) said on Wednesday that the House’s actions don’t change his stance on the bill or its chances of making it out of the Senate.

  His stance is in opposition to the House version of the legislation that allows exceptions for casinos and cigar bars.

  House members said that the exception would put those establishments on even playing ground with tribal gaming spots that wouldn’t be subject to the smoking ban and protect those for whom smoking is their business.

  While Mr. Bishop is standing firm against the compromise legislation, the state’s top health official, Department of Community Health Director Janet Olszewski, has relented. She said during a press conference last Tuesday that although she’d like a comprehensive ban on workplace smoking, she would take the compromise in the interest of getting legislation passed.

  The biggest priority, Ms. Olszewski said, is to get the governor to sign the ban into law before any more nonsmokers suffer the health consequences of second-hand smoke in the workplace or while patronizing smoky businesses.

  Meanwhile, opponents of the bill are hard at work gathering evidence that the ban would bring economic losses to the state, an assertion Ms. Olszewski said has been refuted by recent studies and other states’ experiences.

• On the health insurance front, Blue Cross Blue Shield of Michigan is still battling out deregulation legislation with Attorney General Mike Cox and consumer groups. Last week the feud was over whether the Blues would risk losing its franchise by disclosing its insurance rates at a public hearing and whether the insurer is losing as much money under current law as it claims.After an announcement on from the Blues that it didn’t want to disclose its full rating information, but that the company needed lawmakers to act swiftly on legislation to cut its losses, both the attorney general and the main group opposing the legislation fired back.

  Mr. Cox said that the insurer had to disclose its rates so that legislators could decide the necessity for and the exact impact of the deregulation bills.

  But Blue Cross Chief Financial Officer Mark Bartlett said rates are only one of the factors driving up the Blues’ losses in the individual market. Instead, he said, the real teeth of the legislation is that it would allow the Blues to implement rate changes more quickly, to attract more healthy customers and to have some market protection for being the insurer of last resort.

  Mr. Bartlett said changes are needed quickly to stem the tide of losses the Blues projects into the coming years.

  But while Blue Cross painted a picture of a massive hemorrhage of profits, opponents of the reform plan said that profit loss is more like a nosebleed.

  Members of the Put Michigan People First Coalition, which includes groups such as AARP and unions representing customers as well as for-profit insurance companies, said that the insurance company has overstated its losses and urged the legislature to hold off action on any changes in the Blues’ regulation until next session. And they said they support a final solution closer to legislation as it came from the Senate if something is passed.

  Meanwhile, Mr. Cox acknowledged there would have to be some changes to the current individual health insurance market, saying the state needs to preserve a strong Blue Cross but also cautioning legislators not to make a hasty vote on the bills.

  The attorney general joined opponent groups in asking lawmakers to hold off any action on HB 5282 and HB 5283, or any other Blue Cross bills, until his staff can complete its review of the financial information the insurer provided the previous week.

  Blue Cross wasn’t the only party to plead with the legislature this week to stave off economic catastrophe in the coming weeks.

• In two Senate committees, the Department of Transportation said that if it doesn’t see increased funding to deal with damaged roads, the state would lose out on its full share of federal-match dollars — up to $2 billion in four years — starting in 2010.The department endorsed the recommendations of the Transportation Funding Task Force for a revenue increase in the coming years. But the task force also said “transportation agencies should wring every possible efficiency from the resources already provided.”

  MDOT said that not only are the state’s roads — the funding for which is at its most abysmal level since 1997 — a hassle for drivers, but they are a deterrent for businesses that are considering setting up shop in Michigan.

• Senate committees did move along one package of transportation bills that proponents said would make the state a more attractive place to live and work with very little investment from tax dollars.The light rail system in Detroit would be paid for largely with private dollars and would be maintained by state and local money.

  The light rail package allows MDOT to establish a Transit Development Finance Zone for a street railway and amends the State Transportation Preservation Act to permit MDOT to provide financial assistance to a street railway to perform maintenance. Additionally, criminal procedure guidelines are created for causing the derailment of a light rail system.\

  Under one piece of the package, non-profit corporations would meet certain criteria to become a street railway in an area, but the company would need to pay the road authority for all of that authority’s costs incurred in construction of the street railway.

• The state of Detroit Public Schools also surfaced last week.After narrowly avoiding state takeover, the school system also got a break from House lawmakers who approved a bill in committee that would allow the schools to keep “first class” status despite heavy losses in student counts.

  The first-class designation allows Detroit to prevent the expansion of charter schools, among other things.

GRANHOLM/OBAMA: Governor Jennifer Granholm had a fruitful meeting last week with President-elect Barrack Obama, getting some assurance that the incoming leader would support auto industry loans and that he would follow up on a stimulus package for states. The package would likely shrink the amount the governor will cut from this year’s budget with an executive order, tentatively expected early this week.

The governor said a private exchange with Mr. Obama during a governors’ meeting in Philadelphia on the plans for the auto industry was encouraging. She urged him to support the plans of the Big Three to survive, and noted the president-elect said he was looking forward to reviewing the plans.

That exchange also apparently gave her faith that Mr. Obama’s promised stimulus package would bring a significant boost to Michigan’s economy. After meeting with him she announced that it would be foolish to make deep cuts in the current state budget with significant federal aid on the way.

The collapsed financial markets and deadly auto sales have radically altered the economic outlook for Michigan, and executive order cuts in the current-year budget are expected, perhaps as soon as Tuesday.

However, Ms. Granholm said cuts will not approach the $400-million or more level that some had projected as necessary to keep the 2008-09 budget in balance.

The National Governors Association is requesting $40 billion in new federal funds for Medicaid programs over two years and up to $136 billion in infrastructure projects.

Ms. Granholm said a specific dollar amount was not discussed, but the meeting showed strong support for a federal stimulus package, with the questions only being how to best configure it.

Ms. Granholm said she expects a stimulus package will impact how and when the executive order cuts go forward, and will affect her recommendations for the 2009-10 budget to be presented in February as well. She hoped Congress would make the package the first order of business when it convenes in January, with the possibility that Mr. Obama would have something to sign when he is sworn in on January 20.

What is known is that Michigan is looking at a 4-percent increase in the matching rates for the Medicaid program, which would bring in an additional $400 million–$500 million next year.

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