EDITORIAL: Michigan lawmakers’ priorities and how donors could influence them

Jan. 08--Want to forecast the Michigan Legislature's priorities for the year ahead?

Look first at the state's campaign finance disclosure database.

In the last cycle alone, tens of millions flowed from powerful interests to lawmakers in a long-standing ritual that's unseemly, but legal.

What are they buying? Access, surely. But also action -- big donors give money to bend the Legislature's attention and focus to the issues those donors are concerned with.

So what's on tap for Michigan lawmakers this year has a lot to do with what's on the minds of the state's biggest campaign financiers -- interests that may or may not align with the most pressing needs of Michiganders.

That starts with the leadership in both the House of Representatives and the Senate.

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In the last election cycle alone, the Blue Cross Blue Shield of Michigan Political Action Committee took in $1.1 million in contributions, dollars it paid out to candidates, sitting legislators and parties the PAC hopes to influence, according to a Michigan Campaign Finance Network analysis of PAC spending. Among them are Senate Majority Leader Arlan Meekhof, R-West Olive, and new House Speaker Tom Leonard, R-DeWitt Township. Over the last five years, that PAC has contributed $48,000 to Meekhof and $24,550 to Leonard.

Meekhof's other donors include the DeVos family of west Michigan (one of the biggest spenders in Michigan politics), Business Leaders for Michigan and the Michigan Chamber of Commerce Political Action Committee.

Leonard, the former chair of the chamber's insurance committee, has become practiced at stacking insurance contributions: Blue Cross, the Automobile Club of Michigan, Molina Healthcare, the Michigan Insurance Coalition, the Health Alliance Plan PAC and the Friends of Farmers Insurance PAC.

And look at what's expected to top the Legislature's list.

The debate over the future of no-fault insurance? Of concern to both the hospital and insurance lobbies. Economic development incentives? That's Business Leaders for Michigan. Education reform, and pension-busting? Try the omnipresent DeVos family.

For Blue Cross, or other big donors, this is just good business. For Meekhof and Leonard -- and the dozens of other legislators from both parties such PACs support -- it's something else.

As legislative leaders, Meekhof and Leonard serve as gatekeepers, in many ways choosing which bills will move forward and which will die in committee. (And while most big donors fund both Republicans and Democrats, the Dems' minority in Lansing means even legislative leadership on that side of the aisle has little chance of advancing its priorities.) Our lawmakers' legislative agenda should be set by the public interest -- the subjects our Legislature takes up should be those most crucial to Michiganders' health and welfare.

That's not always how it happens. Public interest must jostle with donors for primacy, and too often, public interest loses.

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It's a nuance often lost in indictments of the campaign finance system that grants big money, donated by a handful of industries and wealthy individuals, an outsized influence in our politics.

Money doesn't buy ideology. A lawmaker who supports abortion rights won't vote against them, , no matter how many much money is in play, and every lawmaker has core issues on which he or she just won't budge. But there are a much larger array of issues that don't attract that kind of solid fervor, and there's where big money buys influence.

It also buys urgency.

And Lansing's most urgent business this year is framed largely along the lines of the moneyed interests that fund lawmakers' campaigns.

Ideal democracy it is not. But until the people themselves demand change -- through modest campaign restrictions and much more visible transparency for the relationships between lawmakers and donors -- this is the way it will be.

No-fault auto insurance

Here's a dubious proposition, on its face.

In exchange for the unlimited medical protections provided by Michigan's no-fault insurance scheme, let's have a system that caps medical reimbursements and saves customers -- wait for it -- $8 a month.

Yes -- for a little less than $100 a year, insurance companies want you to give up on the idea that you'll be taken care of in the wake of a catastrophic injury in a car accident.

Why?

The simplest answer is insurance company bottom lines. By lowering the fee schedule for hospitals that care for accident patients, they'd be able to limit their own liabilities. And the insurance industry gives a lot of money to our lawmakers -- enough, in some cases, to essentially fund individual lawmakers' campaigns.

But this is where the Legislature has to come in with an assertion about whom they serve.

There's nothing wrong with trying to gain control of accident-related medical costs, especially to the extent they are manipulated by predators in the market. Think of the law firms that advertise constantly, looking for victims they can use to exploit the no-limit nature of no-fault insurance.

But the primary interest here should be consumers, and the insurance industry should come second.

Lower premiums make a lot of sense, particularly in urban areas like Detroit, where it has always been unclear why rates are so high. Even with the city's car-theft problem, unusually high number of uninsured drivers and high medical claims, the triplicate nature of rates in comparison to many suburbs is usury.

But the trade-off of protection for lower premiums is a fairly dangerous one.

And the trade-off of protection for premiums that barely drop? Well, that's just preposterous.

Lawmakers need to think of their constituents more than their donors on this issue.

Tax breaks for mega-developers

Weaning Michigan from the tax breaks his Republican and Democratic predecessors relied on to lure employers and development projects to the state was a prominent feature of Gov. Rick Snyder's first-term fiscal agenda. But Detroit real estate magnate Dan Gilbert, other developers and business advocates convinced Snyder late last year that potentially "transformational" development projects they want to undertake in Detroit and other cities simply won't get done without the targeted incentives Snyder and other free-market Republicans find distasteful.

After it easily cleared the Senate with bipartisan support late last year, Gilbert won Snyder's blessing for legislation that would have allowed developers to recapture $50 million in state tax revenue for up to five such projects a year. But the package stalled when former House Speaker Kevin Cotter, R-Mt. Pleasant, and a simpatico committee chair blocked it from coming to a vote in the lower chamber.

The new Republican majority in the House is arguably even more conservative than the free-market ideologues who derailed the incentive package, known as "TIF (for tax-increment financing) on steroids" in lame duck. Still, the bipartisan alliance that now includes Snyder and economic development executives in other Michigan cities as well as big-league developers like Gilbert is likely to press the issue in the new session. We'll also note that the groups invested in this legislation have also invested in the Legislature -- a Michigan Campaign Finance Network analysis found that groups promoting the measure donated thousands to the senators who voted on it in the last legislative session.

The longer significant parcels in Detroit and other urban centers lie fallow, the more pressure for more generous tax incentives will increase. Conservatives are right to be skeptical of new corporate-welfare initiatives. But their reflexive aversion to anything that smacks of government intervention shouldn't be allowed to derail carefully targeted tax incentives that are in the long-term interest of Michigan and its taxpayers.

Michigan's Medicaid expansion

If the U.S. Congress repeals the Affordable Care Act, more than 640,000 Michiganders could be in jeopardy.

Those Michiganders are enrolled in Healthy Michigan, a hybrid Medicaid extension program adopted by the state Legislature in 2013 as part of the Affordable Care Act, which offered states federal funding to expand Medicaid eligibility criteria. To date, the federal government has picked up nearly all of the costs. That will change this year, when federal funding drops to 95% of the program's costs. By 2020, federal funding will drop to 90%; Michigan will be on the hook for around $400 million, a sum that, according to a new University of Michigan study, is offset by savings generated by the plan. Healthy Michigan, the study found, increased state funds by about $554 million, the result of decreased state health care spending and increased tax revenue.

All of that could change.

The GOP-promised ACA repeal could lower the Medicaid match rate, putting Michigan on the hook for more of the program's costs. President-elect Donald Trump wants to transform Medicaid into a block grant program, which would give the state more latitude over allocation of those funds, but likely lag true costs, a plan supported by U.S. Speaker of the House Paul Ryan, R-Wis.

Even if Washington doesn't change the ACA, some members of the GOP caucus are balking at the increased costs Michigan will face in the years ahead.

Here's the bottom line: When more Michiganders are healthy, when more Michiganders have access to health care, the state benefits. We can't afford to allow more than 640,000 Michiganders to become uninsured. The costs of uncompensated care increase costs for Michiganders with insurance, through our tax bills or our own insurance premiums. Business benefits from a healthy workforce. And it's the right thing to do. If Washington falters, Lansing has to pick up the slack.

Pension reform

The interests that hate unions in Michigan -- the ones that pushed for right-to-work a few years ago, for instance -- are not wrong to be frustrated with the financial troubles that threaten to befall pension and other retirement benefits for public workers.

It's that their animus is aimed incorrectly.

People who spent their lives working for state or local governments, or for schools in our state, and who spent their lives planning for retirement based on promises made by their employers are not the problem.

The problem is that the caretakers of those promises -- government officials at nearly every level -- didn't keep up with their obligations. Priorities shifted. Investments weren't made consistently or wisely. And more promises were piled on old ones, bringing the demand for resources even higher.

So now, the bill for unfunded retirement promises stretches into the billions in Michigan. And it's true that something must be done.

Lawmakers, under pressure from big donors like the DeVos family (Richard DeVos announced in a speech last fall that this was his No.1 priority), took an ill-advised run at a cruel solution in the November to December lame-duck legislative session: eliminate the hybrid pension plan for new teachers and use only 401(k)-style investments; get rid of employer-provided retiree health care for new workers in favor of health savings accounts.

Yes, indeed. Let's fix the problem by making things tougher for government employees. Right? They're vulnerable, generally underpaid and definitely undervalued. Let's make all of that worse, in the name of saving taxpayer bucks.

Except ... if you remove incentives to do the crucial work of public employees -- teachers, cops, firefighters, water-quality specialists -- then who'll do it? Or more to the point, how will we get the most qualified people to even be interested?

A better approach is to figure out how to invest more in local and state retirement benefits, to sustain the promises made and be sure they're intact to attract high-quality employees in the future.

That's not the Republican way. It's not the DeVos way. And that's one of the reasons Michigan's government services -- schools, public safety, water protection -- are becoming a joke.

We can do better -- but only if the state's citizens push back, and demand more reasonable solutions.

Pub-private partnerships

Strapped for cash as the state's infrastructure deteriorates, Snyder is casting about for inventive solutions to the problem. The latest? Public-private partnerships to generate funds to repair roads and bridges.

Thirty-three other states have adopted such partnerships, MIRS reports, but what's holding Snyder's proposal back is fears that infrastructure repaired by private entities will be repurposed for private profit. (Think toll roads.) But if Snyder's proposal barred toll roads, MIRS writes, "the measure should pass fairly easily."

The logic behind the idea makes sense -- business benefits when public infrastructure is sound, so it's reasonable to ask business to contribute toward infrastructure's upkeep.

It's too bad there's not already a mechanism that would allow business to contribute to state coffers ... hmm ... we think there may be something. Oh, right -- those things called "taxes."

In 2011, Snyder's signature policy reform slashed business taxes, transferring the cost of running government from business to individuals, promising that lower taxes would result in a jobs boom.

The only problem is, the math doesn't check out. Six years later, the state is stretched in nearly every direction: Schools need more money. The federal government is prepared to slash Medicaid. Cities are still struggling. You might think the fix was obvious -- time to revisit that $1.7-billion business tax cut. Instead, Snyder et al are preparing to circumvent what would certainly be a politically unpopular tax increase by creating a secondary system for de facto business taxation, constructed in an exceedingly hinky manner. Just another day in Lansing.

Juvenile justice

Trying teenage criminal defendants as adults is one of those tough-sounding initiatives that has largely backfired in the real world. Michigan is one of just seven states that still permit offenders younger than 18 to be tried in adult courts and housed in adult prisons; the vast majority of states that have rescinded that practice report consistent success in reducing juvenile recidivism and corrections costs.

Happily, Michigan legislators on both sides of the aisle seem increasingly amenable to evidence-based corrections reform. Legislation that would have forbidden prosecutors from charging or sentencing defendants younger than 18 as adults won easy bipartisan approval in the House last year. It ran aground in the state Senate only after local elected officials expressed concern that the change would shift tens of millions in expenses from the state Department of Corrections to underfunded county jails.

The counties' fiscal concerns are legitimate, but they are also easy to address if Michigan can replicate the overall cost savings achieved in other states that treat those younger than 18 as juveniles. But it's uncertain whether state lawmakers will rejoin the issue with any urgency in the new session, if only because no deep-pocketed interest group has made it a priority.

It would be tragic if what is recognized almost universally as an overdue correction in juvenile justice policy were further delayed by intramural turf wars. Corrections reform remains a prime opportunity for bipartisan cooperation, and lawmakers who want to prove the Legislature's capacity for constructive, evidence-based reform would be foolish not to exploit it.

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