Thursday, January 17, 2013

Legislative Update Week of January 14th

With the new session still in its infancy, the Legislature has not been able to get up to working at full speed yet. They awaited two crucial pieces of information: one, how much money they would have to budget with, and secondly the agenda and direction the Governor wanted to go in, Over the past week the Legislature received that information, let’s review:

Consensus Revenue Estimating Conference

Before the start of the new legislative session the House and Senate Fiscal Agencies along with the State Treasurer came together to discuss the estimated revenue that the state would have in the coming fiscal year at the Consensus Revenue Estimating Conference. This conference meets twice a year, in January and in May. The conference heard from both of the fiscal agencies along with the Department of Treasury. The University of Michigan was also invited to provide an economic outlook for the state in the coming years ahead. Let’s break down the numbers:

Unemployment:
The outlook for Michigan unemployment picture is slowly brightening up. With a current rate for 2012 at 8.9%, economists forecast that the overall rate for the coming year will drop a point to 8.8%; drop to 8.2% in 2014 and 7.6% in 2015.

Personal Income:
With the drop in unemployment forecasted and second positive is the forecast of increasing personal income for those working. For 2013 it has been forecasted to increase 2.6% with a 4.3% increase in 2014 from 2013 and 4.4% increase in 2015. A direction the Governor has been advocating for since his election two years ago.

State Budget:
What does that mean for Michigan? One could extrapolate that with the increase in income over the coming year that revenues for the State will be increasing. With FY 2013 though, that isn't the case. The General Fund General Purpose monies, that fund programs like Medicaid, will actually see a decrease from FY 2012 of $472.9 Million or a change of 5.1%. The School Aid fund is expected to add an additional $249 Million than what was estimated May 2012. We could see some cuts coming in programs in Michigan for FY 13 but expected an increase in revenue of $472.2 Million for FY 14. Now the Governor will present his budget proposal to the Legislature on February 7th, so we wait and see how programs will be affected.

State of the State Address

The Governor's State of the State address was just like the other he has delivered, using an outline to rather than providing an actual written speech when he delivered it. The Governor started by providing a review of where the State was with his dashboards that he has made famous over his term has Governor. The dashboard can be view by clicking the link above. The Governor reported that with the changes that Michigan has seen over the past two years, the economy in Michigan was growing and Michigan was putting people back to work.

The road ahead for the Governor looks to continue the same success that has had over the past two years. There were three major messages that Governor Snyder conveyed to the lawmakers this past Wednesday night: one an increase in funding for roads is needed and needed now. The Governor is looking to raise 1.2 Billion each year for 10 years to cover the costs of repairing Michigan's crumbling roads. This was met with hesitation by many from his own party since the plan included a large fee increase to automobile registration. Time will tell on whether this proposal will make it out of the legislature or not.

The second major proposal was educational and the increase efforts to pass an Education Achievement Authority. Fifteen schools in the Detroit area are already operating under the premise of an Authority that provides a different look at education than what is considered typical in Michigan. Students are taught to master skills without the fear of receiving failing grades and worried about whether or not they will make it to the next grade. The Governor would like to have the opportunity to bring this proposal state wide to all of the schools that are struggling in Michigan.

Finally, the third biggest topic was insurance reform. The Governor vetoed the last efforts by the legislature to reform Blue Cross Blue Shield due to the abortion amendments that were tacked on by the House in the final days of the last session. The Governor now asked the legislature to go back to the drawing board and bring legislation forward that would move the Blues in a world that had a health insurance marketplace. Auto no fault insurance was the other insurance reform topic of his speech. He wants reforms done this year to provide protection to the insurance companies on their liability and legacy costs for those involved in an auto accident. It is inevitable that this will be on the agenda of this legislature.

To get more details on the Governor's State of the State address click here.

Stay with MSMS to receive all of the up to date information at http://www.msms.org/advocacy.

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