Big issues left undone by Michigan Legislature

The Michigan Legislature has passed plenty of bills in the first six months of the legislative session.

From a $54.5-billion budget completed four months before the fiscal year begins to bills that end incentives to the film industry and ban local governments from enacting ordinances that affect wages and benefits offered by employers in their towns, legislators have tackled issues both mundane and controversial.

But they’ve also left some big and pressing issues on the table, either unable to come up with enough votes to pass both the House of Representatives and Senate or encountering significant opposition from Gov. Rick Snyder on a couple of key agenda items.

Roads

After Michigan voters trashed Proposal 1 by an 80% to 20% margin on May 5 that would have addressed funding for the state’s crumbling roads and bridges, the House of Representatives passed a package of bills that would shift existing state revenues; raise the tax on diesel fuel from $.15 cents per gallon to match the $.19 cents per gallon tax on regular fuel; raise registration fees on hybrid and electric vehicles, and eliminate the Earned Income Tax Credit available to working poor families.

But Gov. Rick Snyder and members of the Senate have said more new revenue is needed to raise at least $1.2 billion a year for the next 10 years to get the roads in good shape.

Related: Snyder signs $54.5-billion budget that lacks road fix

So Senate Republicans, who hold a 27-11 majority in the chamber, have decided not to take up the House bills yet and are embarking on their own path to a solution for Michigan’s roads. They will meet Tuesday for a fourth and final time in a behind-closed-doors retreat to finalize the details of the plan they intend to introduce early next month.

Senate Majority Leader Arlan Meekhof said in a WKAR radio interview Monday that at the very least, the gas tax has to be indexed to cost of living factors. As for the House plan to shift more than $130 million from the Michigan Economic Development Corporation into roads, “That would be a difficult sell in my caucus.”

Prospects: Expect Senate action on road bills this summer, with a final solution completed by early fall.

No-fault auto insurance

A plan that would change Michigan’s unique no-fault auto insurance system started strong and fast in the Senate this spring, passing in two days without any significant hearings.

But the bills have stalled in the House of Representatives, where the plan has passed out of committee but has been unable to gain enough support to pass the full House.

Currently, insurance companies pay for the first $535,000 of care for severely injured accident victims. The Michigan Catastrophic Claims Association — fueled by an annual fee on car owners — takes over and pays costs for the rest of the lifetime care for those critically injured people. Nearly 15,000 people are still receiving benefits under the MCCA.

The bill provides for:

Phasing out the old MCCA, which is run by the insurance industry, and setting up a new catastrophic fund run by gubernatorial appointees. The old MCCA would continue providing care for about 15,000 current accident victims for the rest of their lives.

Imposing a set fee schedule for all accident victims — 150% of rates charged for Medicare — that health care providers could charge for services to critically injured people.

Capping rates for home health care providers at $15 per hour for family members, unless they are trained health care professionals.

Requiring auto insurance companies to guarantee rate relief of $100 per vehicle for two years.

Health care providers and accident victims have said that the schedule shouldn’t apply because accident victims need such specialized and intensive care that is far more expensive.

Supporters say Michigan has become an uncompetitive place to do business because insurance costs are among the highest in the nation.

Prospects: Uncertain. If the House had the votes for the plan that came out of committee, they would have voted on it already. But Republican leadership in both the House and Senate, as well as Snyder, have said that no-fault reform is a top priority.

D-Insurance

As part of the no-fault discussion, Detroit Mayor Mike Duggan offered his own plan to reduce sky-high auto insurance rates for city drivers.

The plan has passed through the Senate Insurance Committee, but hasn’t been taken up in the full Senate. In the House, the Democratic caucus is united in its opposition to the plan because insurance costs would still be high for Detroiters, but coverage would be distinctly less generous than what others in the state get.

Duggan’s plan would give Detroit and other cities with high populations of uninsured drivers the option to opt out of the unlimited medical coverage provided by Michigan’s no-fault auto insurance plan and buy reduced coverage at a reduced rate. Duggan proposes a policy that would provide $250,000 of hospital coverage and another $25,000 of outpatient coverage.

Prospects: Uncertain. There is united opposition to the plan from Democrats and some Republicans in the House.

Prevailing wage

The Senate narrowly passed a bill that would repeal Michigan’s prevailing wage law, which requires that union-scale wages are paid on construction projects that use state taxpayer dollars. That covers mostly schools and governmental building projects.

The issue also is a priority for Republican leadership in the House, but Snyder has repeatedly said it’s bad public policy in a state that is trying to encourage workers to go into skilled trades.

While many business organizations support the repeal as a way to bring down construction costs on publicly funded building projects, unions and some construction companies oppose the bill, saying it will hamper safety, training and good-paying jobs for middle class workers.

Prospects: The House will hold off on voting on prevailing wage until a citizen-led petition drive proves it can get enough signatures to either put the issue to a simple majority vote of the Legislature or on the 2016 ballot.

Energy policy

Significant changes to Michigan’s energy policy were introduced amid great fanfare and multiple hearings in the House Energy Policy Committee during the spring. But legislators have not been able to come up with a consensus on how to regulate the state’s utilities.

State Rep. Aric Nesbitt, R-Lawton, offered a plan that goes back to a fully regulated market for electricity and maintains — but does not increase — a mandate that utilities get 10% of their energy from renewable sources, like wind and solar. His plan also does away with mandates to increase energy efficiencies.

While the state’s largest utilities — DTE Energy and Consumers Energy — enthusiastically support such a plan, the businesses, school districts and local units of government that are buying from alternative energy suppliers say more choice is the best and less expensive option for them.

Other lawmakers have introduced legislation that would either open up the electricity market to competition or maintain a program started in 2008 that allowed 10% of the electricity customers in the state to leave the established big utilities and choose their own energy supply.

Snyder falls somewhere in between, saying the choice market should be maintained, but with stricter oversight that the smaller suppliers will stay and invest in the state.

Prospects: In flux until some compromise can be reached between wildly different versions of energy policy.

The Senate has tentatively scheduled session days throughout the summer, but that doesn’t necessarily mean they will happen. The House of Representatives has three session days scheduled in July and in August.

Contact Kathleen Gray: 517-372-8661, kgray99@freepress.com or on Twitter @michpoligal