UPDATED (10 a.m., Dec. 6, 2017): The League has been told to expect substitute versions for the 16-bill OPEB reform package sometime this morning or later today. The original package of bills, as introduced Nov. 30, was approved without support from Democrats in House and Senate committees Tuesday and have been tentatively scheduled for action on today’s House and Senate agendas. The League continues to actively press for amendments to the bills that would address our concerns. Please stay tuned as the League may ask you – our members – to contact your lawmakers to support or oppose the forthcoming revisions.
FROM 4:30 p.m. Dec. 5, 2017: The League’s Chris Hackbarth and Anthony Minghine testified this morning and this afternoon in opposition to the introduced versions of the identical OPEB (Other Post Employment Benefit) bill packages in the Michigan Senate and House committees. Negotiation on these bills is ongoing and we are working diligently with the Governor’s Administration and House and Senate leadership staff to address our concerns. They have been receptive to our input so far and we are waiting for revisions that should reflect the input we have provided.
We testified Tuesday in both committees alongside officials from the Michigan Association of Counties and Michigan Townships Association. League member and Port Huron City Manager James Freed also testified. We continue to work and propose changes to the complex 16-bill package. The Senate Michigan Competitiveness Committee approved each of the bills, along with a related technical amendment, along party lines in 4-1 votes and sent them to the full Senate for a vote. The Senate adjourned for the day and may take up the package possibly later this week or next.
As most League members are probably aware, the League has been working for nearly two years on major municipal finance reform through our SaveMiCity initiative (go to saveMicity.org for details). The SaveMICity efforts has been looking for revenue, structure, and cost solutions to make our municipalities more fiscally sustainable. OPEB has been identified as our most significant budget cost driver in need of reform. Therefore the OPEB discussion happening now in the state Legislature is extremely important. For many months, League staff have been working with the legislature and governor’s office to help craft solutions to the OPEB problem.
The 16-bill package (House Bills 5298-5313 and duplicate Senate Bills 686-701) has pros and cons that League staff continue to assess to determine if these reform bills will provide necessary tools for communities to better manage these costs while remaining true to our fundamental beliefs – that communities need the ability to provide reasonable benefits to their employees and retirees without crowding out essential city services.
There are many parts of the bill package that the League supports, but we are also working to address a number of concerns that exist within the bills as introduced. Chief among them is the use of the Emergency Management (EM) law as the enforcement mechanism to address any impasse situation in the OPEB reform process. The League’s Anthony Minghine, deputy executive director and chief operating officer, testified that the use of the EM law is a “broad overstep” to the problem. Specifically, the League has raised concerns over the inclusion of language in this package that opens PA 436, the Emergency Manager law to add in a new provision for an emergency management team to be appointed in communities where the community and its bargaining units are unable to come to agreement on a local corrective action plans designed to address an OPEB or pension funding situation that exceeds specified funding and budget spending thresholds.
View details about the OPEB bills in a previous blog that the League’s Chris Hackbarth, director of state and federal affairs, posted Thursday, Nov. 30, and updated yesterday here.
While it appears that both committees will be moving their respective bill packages to the floor today we anticipate changes to these bills before any further action and continue to actively press for amendments to the bills that would address our concerns.
Matt Bach is director of communications for the Michigan Municipal League. He can be reached at firstname.lastname@example.org.