David Hecker
President

Lois Lofton Doniver Secretary-Treasurer

Louise Somalski
Legislative Coordinator

October 2008

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

Top

2008 Lame Duck Session

When the State Legislature reconvenes following the November general election, some of those lawmakers will not be returning in January. Hence, they are informally called "lame duck" members participating in a "lame duck" session.

When the state legislature adjourns for its final time this year (sine die), all bills currently before them will die and new legislation must be introduced next year. So the "lame duck" session is the last chance to pass any of the pending bills.

This can potentially be a very dangerous situation. Some pending legislation affecting education that could be addressed in this "lame duck" session include: school vouchers; expanding charter schools; high school curriculum; promise zones; changes in MPSERS for community college employees; reducing taxes for education; and the preservation of the First Class designation for the Detroit Public Schools.

Please be prepared to respond to our urgent request for assistance on any of these issues. The legislature could act quickly to move legislation during November and December.

Top

Detroit Schools Financial Review Team - Not a Takeover

Governor Jennifer Granholm, Senate Majority Leader Mike Bishop (R- Rochester) and House Speaker Andy Dillon (D-Redford Twp.) have named a review team to determine whether the Governor should appoint a financial manager for the financially troubled Detroit Public School District.

Superintendent of Public Instruction Mike Flanagan requested the review after rejecting the district's proposed deficit elimination plan.

Governor Granholm appointed State Superintendent Flanagan, Treasurer Robert Kleine and Management and Budget Director Lisa Webb Sharpe, as required by state law. House Speaker Dillon nominated Oscar King III, Pastor of Detroit Northwest Unity Baptist Church and President of the Council of Baptist Pastors of Detroit and Vicinity. Senate Majority Leader Bishop nominated Timotheus Weeks, Assistant Superintendent for Business Services for Bloomfield Public Schools.

The team has until November 5 to review the district's finances and report its findings to the Governor and the Superintendent as to whether a financial emergency exists in the district. To avoid a financial emergency from being declared, the Review Team and the local board of education can enter into an agreement that outlines direct actions the district must take to resolve the projected $400 - $460 million deficit.

If no agreement can be made, State Superintendent Flanagan has the power to declare a "financial emergency." He would then submit three names to the Governor from which to appoint an Emergency Financial Manager, who would assume authority over all fiscal matters of the school district.

The Governor and State Superintendent Flanagan have emphasized that if a money manager is put in place, it will not be a takeover. Superintendent Flanagan pointed out that the local school board would still have control over "education matters."

Top

Limit on Taxable Value Would Drastically Reduce School Aid Fund

House Joint Resolution III (Substitute H-1) (LeBlanc, D-Westland) would amend the State Constitution to specify that if the assessed property value (based on market value) decreases, the taxable value could not increase. It would also limit increases in taxable value when the assessed value increases to the lesser of the increase in assessed value, inflation, or five percent.

The constitutional amendment would require the Legislature to put those provisions into statute. HJR III requires the proposed amendment to be put before the voters at the next general election.

Since the imposition of a cap on property assessments with the passage of Proposal A in 1994, property taxes have been based on "taxable value" rather than state equalized value or assessed value. The SEV of a parcel of property is supposed to be set at 50 percent of market value. However, the value of property for tax purposes ("taxable value") cannot increase from one year to the next by more than the greater of inflation or five percent. Once property is sold, the taxable value "pops up" to the assessed value. Over time, the spread between assessed value and taxable value grows, assuming property values are increasing faster than inflation.

Currently, with the decline in property values, it is possible for the taxable value of property to continue to increase while the assessed value decreases in cases where property has been under the same ownership for a significant length of time. Because taxable value cannot exceed SEV, taxable value can also decrease if SEV declines by a substantial amount, particularly when property owners are relatively new owners.

If this version of HJR III is adopted, the State Education Tax, all of which is earmarked to the School Aid Fund, would be reduced by an estimated $19 million in FY 2011. In FY 2012, the decrease in the School Aid Fund (SAF) is estimated at $55 million.

HJR III passed the House on September 25, but has not been transmitted to the Senate. There is an identical version of this resolution in the Senate that has yet to be acted upon.

Top

Is Your State Retirement Safe?

In response to the many inquiries we have received, we are reprinting a letter from the Michigan Department of Treasury. We will keep you informed as more information becomes available.

Top

Michigan Colleges Get Money for Building Projects

Senate Bill 511 (Jelinek, R-Three Oaks) PUBLIC ACT 278 of 2008 uses only earmarked funds that contain placeholders for several potential higher education and community college building projects. Public Act 278 of 2008 does the following:

WCCC Project. Includes language providing that funds appropriated in Part 1 for the Wayne County Community College Northwest Campus replacement shall only be released upon approval of the planning documents and construction authorization request by the JCOS. The project may not move into final design until approved by JCOS. (Sec. 407)

Use and Finance Statements. Includes language that prohibits universities, community colleges, State agencies, and the MEDC from letting a contract for new construction unless the project is authorized by JCOS. This language was included in Capital Outlay Budgets prior to FY 2006-07. (Sec. 651)

Michigan Business Preference/Bid Documents Submitted to JCOS. Adds new language stating that a university or community college receiving use and finance project approvals shall give preference to competitively priced goods or services that are manufactured or provided by Michigan businesses.

University and Community College projects contained in Public Act 278 of 2008, pending approval by the Joint Capital Outlay Subcommittee of the Appropriations Committees, are listed below:

The Governor recommended $40 million each to Michigan State University, the University of Michigan, and Wayne State University, but funding for these projects was not included in the construction bill that passed the Legislature on September 25. That lack of funding put on hold a $146 million MSU project that included the expansion of the engineering and plant sciences building, a $175 million U of M biology building, and a $180 million Wayne State biomedical research building.

Top

Higher Education and Community College Appropriations

Senate Bill 1111 (Jelinek, R-Three Oaks) PUBLIC ACT 279 of 2008 provides for supplemental appropriations for fiscal years 2007-2008 and FY 2008-2009. The supplemental appropriations in the bill are based on requests submitted to the Legislature by the Office of the State Budget and budget target decisions agreed to by the Governor and Legislative Leadership on June 25, 2008. The following is a brief summary of the FY 2007-2008 Community College and Higher Education appropriations contained in the bill:

Community Colleges: The bill provides $10,000 of Gross and GF/GP appropriations to fully meet the statutorily required payments to reimburse community colleges for lost property tax revenue resulting from the creation of renaissance zones within a community college district.

Higher Education: The bill provides for a fund source switch in the existing appropriations for the State Competitive Scholarship Program, the Tuition Grant Program, and the Tuition Incentive Program. The fund source shift involves replacing $91.9 million of GF/GP funding and $15.9 million of Michigan Merit Award funding with Federal Temporary Assistance to Needy Families (TANF) funding. This fund shift relates to the State's effort to maximize available TANF contingency funding. It has no impact on the funding level of these financial aid programs in FY 2007- 2008.

Top

Community Colleges: Job Training

Senate Bills 1342 and 1343 (Jansen, R-Grand Rapids) have passed the Senate and are currently before the House Commerce Committee.

Senate Bill 1342 would add Chapter 13 (New Jobs Training Programs) to the Community College Act, to do all of the following:

• Allow a community college district to enter into an agreement with an employer, until December 31, 2018, to provide training for new jobs.
  
  
• Allow training program costs to be paid to the community college from income taxes withheld by employers on the new jobs created.
  
  
• Specify the requirements for an agreement, including that the employer provide money to the community college if the withholding amount is insufficient to pay program costs, and pay an administrative fee to the community college district of 15% of the aggregate amount to be paid under the agreement.
  
  
• If program cost is to be paid from income tax withholding, require the employer to pay the amount to be withheld to the community college in the same manner it paid income tax withholding to the Department of Treasury.
  
  
• Allow a community college district, by resolution of its board of trustees, to sell revenue bonds to finance costs of the new jobs training programs, in anticipation of payments under an agreement with an employer.
  
  
• Allow a community college district to pay for a new jobs training program out of the district's funds, including self-funding methods.
  
  
• Provide that bonds and notes issued under Chapter 13 would be tax exempt.
  
  
• Set a limit of $50.0 million per year on the aggregate outstanding obligation of all agreements under Chapter 13.

Senate Bill 1343 would amend the Income Tax Act to provide for income taxes withheld pursuant to an agreement entered into under Senate Bill 1342 to be paid to community colleges. It would also require the Department of Treasury to make an annual report concerning the operation and effectiveness of new jobs training programs and the corresponding income tax withholding requirements.

Although these bills sound good, it is not possible to provide a meaningful estimate of the impact the bills would have on income tax revenue because there is no way to know how many job training programs actually would be created, the size and cost of the programs, the number of jobs that would be created, or how many of these jobs would be created only because of the job training programs.

Any loss of income tax revenue under these bills would reduce the General Fund and the School Aid Fund.

Top

Michigan Schools to Receive Federal Infrastructure Money

Forty-one Michigan elementary and middle schools, including Detroit, Hamtramck and Highland Park, will receive more than $8.7 million in federal Safe Routes to School funding. The Safe Routes to School program encourages parents, teachers, neighborhoods and schools to work together to improve safety for children who walk and bike to school.

The schools will implement safety improvements and education programs aimed at encouraging healthy lifestyles, and also improve opportunities for students to travel safely between home and school. The schools receiving funding will implement education and encouragement programs during the 2008-2009 school year, and complete infrastructure work, such as sidewalks and crosswalks, in 2009.

Top

2008 - 2009 Michigan Department of Education Grants

The AFT Michigan website has been updated to include state and federal grant allocations to our locals for the 2007 - 2008, 2008 - 2009, and 2009 - 2010 school years. Please download the most recent grant report at http://www.aftmichigan.org/files/grants06.pdf to see if your school qualified for any the grants listed below.

2007 - 2008 Section 57 Advanced and Accelerated Summer Institutes
2008 - 2009 Great Parents, Great Start Program
2008 - 2009 IDEA, Part B, Mandated Activities Projects
2008 - 2009 IDEA, Part B Formula Grants
2008 - 2009 Title I - School-Wide Program Planning Grant
2008 - 2009 Middle College High School Health Partnership Grant
2008 - 2009 Pre-College Engineering Grants
2009 - 2010 Mathematics and Science Partnership Grant

Top

Please Spread-The-Word

The Capitol Report does not go out to all AFT Michigan members. It is mailed monthly to AFT Administrative Board Members, Local Presidents, Standing Committee Members, Local PAC Representatives, Detroit Federation of Teachers Building Representatives, AFT Staff Members, and members who have attended Lobby Day. Please pass along the Capitol Report to your other members and retirees. Copy it, fax it, e-mail it or post it to Spread-The-Word. For your convenience the Capitol Report is posted each month on our website at: http://www.aftmichigan.org/takeaction/capitol/capitol.html. Previous Capitol Reports back to 2000 are also archived on our website.

bk:opeiu42aflcio

Top