THE NEW GILDED AGE (Part 2)
THE NEW GILDED AGE (Part 2)
19th December, 2013 0
“Politics is the Entertainment Branch of Industry” – Frank Zappa
It’s a Barnum & Bailey world again this year; and Review Magazine offers its annual perspective on the paper moon of politics in 2013. As usual, it is mostly a story of corrupt people who squander your money and the credibility of our government.
Supreme Court Justice Diane Hathaway resigned January 7th, 2013. The judicial tenure commission described the Democrat’s conduct as a “blatant and brazen violation” of the cannons of judicial conduct, “…unprecedented in Michigan judicial disciplinary history.” Governor Snyder appointed David Viviano to replace Hathaway in February, and now Republicans have a 5-2 hold on the state’s highest court.
On May 29th she was sentenced to a year and a day in prison for concealing assets while claiming hardship, in order to induce the bank to approve a short sale on her distressed home, but she will likely be home for Christmas.
For the supreme arrogance of telling demonstrable lies where a straight answer would do, for selling herself so cheap, for betraying her party for pennies, and for squandering the credibility of Michigan Judges everywhere, Diane Hathaway finds her political and professional life at an end. RIP
Michigan Right to Work laws takes effect. On March 28, 2013, Michigan became the 24th right-to-work state in the nation. Now Michigan workers are free to choose whether to financially support a union or not. Workers and unions will still bargain over wages, hours and working conditions. The difference in collective bargaining is that in a right-to-work state a worker cannot be fired for declining to pay union dues or agency fees.
The right to work law grandfathers in current government union contracts, so many government employees may be forced to pay agency fees until new contracts are put in place, but they won’t be forced to pay agency fees or dues under new collective bargaining agreements in the future.
Union dues “check-offs” promise endless litigation, as union bosses desperately cling to their financial power, but ultimately government employees will enjoy good wages and secure jobs without having to pay off their union bosses. With all three branches of Michigan government firmly in control of republicans who passed the bill, a worker who disagrees with the way their union works, or the politics a union supports on the employee’s dime, can feel confident in becoming an independent.
Michigan gives local governments a way to address unfunded Accrued Actuarial Liabilities. Act 329 lets them issue one-time bonds to prop up their pension and benefit systems, and creates a metaphorical lock box for half the money. More of a reboot for cities, who’s leaders inflated the actual value of these systems with unrealistic investment return assumptions, only to see solvency slide through their fingers, but at least the municipalities must make an irrevocable election to bar the expansion of Defined Benefit options in the future, and that future employees participate in Defined Benefit plans.
As public pension reform goes, Michigan came way ahead of its time, years ago. This flawed “bailout” approach at least lets the actuarial healing begin sooner rather than later. Starting early should save money over the long run, but it rewards bad investment behavior.
Medical Marijuana law changes muddy the waters. The legislature meddled with the voter-initiated law by mustering the required ¾ vote needed to amend the MMMA. Mostly what the legislature accomplished was to prove that the considered legislative process produced statutory language far more vague than the much-maligned MMMA, a voter initiated law, which was approved by 63% of voters.
For example, they specified that marijuana must be kept in a container in the trunk of a car, but if there is no trunk the marijuana must be “Enclosed in a container that is not readily accessible from the interior of the vehicle.” Where might that place be? “Readily accessible from the interior” established no reliable legal standard for lawyers to work with, and is reckless wording that invites a result-oriented analysis by judges based on their own policy desires.
The legislature also “clarified” that plants grown outdoors must be “grown within a stationary structure that is enclosed on all sides, except for the base, by chain-link fencing, wooden slats, or a similar material…” So does that mean the overhead area of a fenced marijuana patch must be covered too, since the top is technically a “side” of a box, just as the exempted “base” would be? Where’s the photosynthesis in that?
Finally, the legislature established rules to ensure the authenticity of patient/physician relationships during the certification process. Doctors who certify patients must establish a bona fide relationship, follow established medical practices and record keeping, and must establish an expectation of a continued patient-physician relationship for care and monitoring the patient’s condition and effectiveness of the cannabis treatments. The voters voted to create a simple law to allow sick people to use marijuana, and the voters chose to make licensed doctors, already regulated under state laws, as the “gatekeepers.” The amendment did not work; it only increased paperwork. But it did send a powerful message of deterrence to liability weary doctors, and it proved a point; the government does not concede the point that the responsible marijuana user is not a danger, and that marijuana is actually a benefit, with far fewer side effects than other drugs like alcohol.
Legislators chickened out when they had the opportunity to pass a medical marijuana law, maligned as rank amateurs the people who used the initiative power to pass laws they dared not touch, and then they passed legislative fixes to the MMMA which created more questions than answers, doing more harm than good.
Now a proposed state law, sponsored by a Canadian business concern, makes a bold but empty gesture to the public by setting up a distribution system which is subject to a precondition that will likely not take place; the rescheduling of Marijuana at the federal level. This feel good legislation is modern rehash of the original Michigan Medical Marijuana law enacted 4 decades ago, which was enacted but never became operative due to the failure of the very same precondition that is in the new proposal. The obstructionist tactics of the government in blocking the liberal implementation of the MMMA has only led to majority public support for full legalization reform. Just in time, since laws that don’t respect people breed people who don’t respect laws.
Medicaid expansion. Governor Snyder signed his Healthy Michigan Plan into law in September. The plan paves the way for Affordable Care Act implementation in Michigan, and opens up Michigan Medicaid eligibility in 2014 to adults with incomes up to 133% of the federal poverty level ($15,500 for a single adult in 2014). When the law takes effect in spring 2014, estimates are that Michigan coverage will expand to 320,000 people the first year, and 470,000 will be covered by 2021, and that Michigan’s uninsured population will drop by about 46%.
With the Medicaid expansion, the federal government is supposed to cover expenses Michigan pays out now, saving the state $206 million in General Fund costs in 2014 alone. The proposed budget would deposit $103 million of those “saving’s into a new health savings fund to cover Michigan’s future health care liabilities. Medicaid recipients would pay income-based premiums that can be reduced through healthy lifestyle choices or increased if they choose to stay on Medicaid for more than four years.
Mackinac Center for Public policy points out that, “Recent studies have shown that those on Medicaid have no better, and often worse, health outcomes than those who are uninsured. Furthermore, with the increased demand for health care without the needed influx of doctors, it will likely take even longer for those on Medicaid to receive care. Michigan could still "opt out" of expansion if the federal government denies specified waivers or if long-term costs exceed early year general fund savings, which the Senate Fiscal Agency expects would happen in 2027-28.
"One of these days, Kwame ... ZOOM! Straight to the moon!" A 2007 whistle blower trial exposed the criminal underbelly of the Detroit political machine. Mayor Kilpatrick committed the crimes of perjury and obstruction of justice during that trial, in order to cover up salacious text messages between himself and his chief of staff, with whom he was having an adulterous affair using city-issued SkyTel pagers.
Ultimately he was convicted in 2008, received a light sentence of 99 days, and then broke probation and served state prison time. In the process he resigned in disgrace, and then faced additional federal charges. A jury convicted the former mayor and in October 2013 he was rocketed to a 28 year bit in federal prison for racketeering and extortion. That’s a lifetime.
Few will shed a tear for this charismatic mayor, who squandered the future of the once great city of Detroit, but it is just hard to watch a human being fall so very far for so many sins and sinners in big government. After a long term corrupt career and a 7-year fall from grace, the story of Kwame finally ends as a cautionary tale to demagogues and their fools. Sic semper tyrannis.
Panic in Detroit. A declaration of financial emergency in March 2013 made Attorney Kevyn Orr the Emergency Manager of Detroit, vested with unbridled power over all city government. Orr precipitated the insolvency when he exercised his discretion to redirect millions that were to pay unsecured bond debt, and pension payments. Detroit's “restructuring” initiatives were funded instead, and the city defaulted on bond payments in June 2013.
On July 18 city lawyers raced to the bankruptcy court to file the largest municipal bankruptcy in history, just before a [democrat] Ingham County Judge ruled they could not do so. Detroit’s estimated long-term debt was more than USD $14 billion and could be between $18 and $20 billion. This December Judge Rhodes ruled that Detroit is eligible for Bankruptcy. This came as no surprise to lawyers. He ruled that Detroit is insolvent, and that the hopelessness of the city’s financial condition made it impractical to seek a negotiated resolution on a plan of adjustment pre-bankruptcy with its thousands of creditors in a short time frame.
The court’s threshold ruling of eligibility is being appealed, but no stay has been put in place, and the court will allow the case to proceed for now. This clears the way for the city to propose a unilateral write-down of city obligations, subject to court approval. This story will not have a happy ending for the retired government employees of Detroit, who lose all the protections afforded them in the Michigan Constitution. Michigan constitutional protections for government pensions are trumped by the supremacy of the federal bankruptcy court, and so are ineffectual in Bankruptcy.
Meanwhile, since the Bankruptcy filing, the city has elected Mike Duggan as mayor, who has said “The only authority I’m going to have is the authority I can convince the governor and emergency manager to assign me.” That shows the new Detroit Mayor to have a tight grasp of reality, and that is a step in the right direction for Detroit politics. Stay Tuned…..
Dismissal of Ballot Initiatives. 2013 was an off election year, with little ballot activity at the State level. One trend worth noting, however, is the apparent public disinterest in making policy through ballot initiatives. 2012 saw a sweeping dismissal of ballot proposals ranging from alternative energy targets to protection of collective bargaining rights.
This campaign season saw the Committee to Ban Fracking fail in their attempt to place an initiative on the November ballot to ban the practice of hydro-fracking in Michigan. In failing to gather the necessary number of voter signatures to place the question on the ballot the group may have actually emboldened Lansing lawmakers to expand the practice, as evidenced by the approval by the DNR for petrochemical companies to establish subsurface exploration and production of natural gas at the “Holy Waters” head of the AuSable River.
Dismal news, indeed, for those that care about the future of the Great Lakes State.
Politics of gender and sexuality continued to grab headlines throughout the year. An October ruling by US District Judge Bernard Friedman deemed unconstitutional Michigan’s ban on same sex marriage. Indications are this ruling will be extended to include overturning the State’s ban on same sex adoptions. With Attorney General Bill Schuette vowing to defend the State constitution on the matter, the issue is headed for the Supreme Court. Given the Court’s recent track record on the matter, however, it is probably only a matter of time before same sex couples will be able to share in the benefits, trials and tribulations of legally recognized marriages in Michigan.
Affordable Health Care & Abortion in Michigan. As the year ended, the Affordable Healthcare Act (or Obamacare to most) dominated both water cooler conversations and the agate typed headlines in Michigan and nationally. While much of the discussion centers around accessibility, technology, cost and “who gets to keep what,” Michigan lawmakers put their own twist on the issue by enacting a ban on coverage of most abortion procedures under basic health plans. Women would need to purchase a separate rider - salaciously coined “rape insurance’ in the press - to cover the cost of family planning procedures.
True to its hot button status, the addition of abortion to the discussion has inflamed the dialog surrounding an already controversial policy implementation. The Supreme Court will likely hear this one, too, as Women’s groups have already begun the wagon circling and saber rattling that always proceeds a battle over a core issue in gender politics, the “Right to Life’ versus a “Woman’s Right to choose.
And on the Local Side of Politics:
If you were going to pick one word to describe Bay City in 2013 it would be “transition.” Between physical and personnel changes, the City is in the process of developing a new landscape, most of which will be unveiled over the course of 2014.
The biggest story in Bay City in 2013 has been the public / private partnership that has resulted in the Uptown Rivers Edge development on the east bank of the Saginaw River. Boasting corporate tenants like Dow Corning and McLaren Health, the new de facto city center will offer a mixture of professional, retail and restaurant businesses. Highlighted by the construction of upscale apartments on the old Mill End site, new and revitalized residential units are also part of the plan for downtown. It is a big undertaking – certainly the biggest pair of projects in the city in several decades – and the combined developments will completely change its face.
Change was also the headline when it came to both elected and appointed City officials. Embattled City Manager Robert Belleman left in the first quarter for a new role as the Saginaw County Controller. While Belleman’s tenure coincided with many successes, from a string of balanced budgets to the announcement of the Uptown development, he was often the target of local ire. Much of the concern vocalized by his detractors was over increases in taxes and utility costs, with Belleman – fairly or unfairly – serving as the face of those debates.
A new City Manager has yet to be hired, as a dearth of candidates in an initial pool and the complication of the November election resulted in a slower than anticipated pace in filling the role. As this issue went to press the Bay City Commission was in the process of interviewing five potential candidates. The hope is to have a new manager in place near the beginning of the year. Whoever is chosen will have a full plate.
Approved late in 2012, the Bay City Police Department and the Fire Department merged into one entity in 2013. The new Public Safety model is headed by Michael Checchini, who was formerly Chief of Police. Under the new model, police officers are cross training as first responders and firefighters. Approximately a dozen full time fire fighters were laid off in the change.
While there has not been sufficient time to fully implement the Public Safety model nor to assess its effectiveness and cost when compared to the previous organizational structure, Bay City is being held up as an example of innovative methods to consolidate its public workforce in the press and journals of municipal management.
Unfortunately, the Bay City Police force was once again embroiled in controversy this year, as a confrontation between three officers and a Bay City resident resulted in three officers losing their jobs.
The officers in question, Keath Bartynski, Brain Aldrich and Don Aldrich, were relieved of their duties after an investigation into an altercation with City resident Joshua Elzinga at Steamer’s Pub in May. Allegations, substantiated in the internal investigation, included assault, false imprisonment and theft of a cell phone, which likely contained pictures of the confrontation.
With apologies to the victim, this scandal is relatively small compared to those that have impacted law enforcement in other municipalities. It is, however, an embarrassing incident that – once again – calls into question the management and decorum of the city police force. With the likelihood of a large civil settlement with the victim and the possibility one or all of the ex-cops many face criminal charges means the discussion of this case is far from over.
While most of 2013 was about change, late December saw a return to familiar turf, as City employees moved back into historic City Hall. The newly renovated building has been closed since experiencing fire and water damage, which occurred during a re-roofing project. Over the last year City employees have been working in a collection of temporary offices scattered around the downtown. Whether the building represents the revitalization of the downtown and hope for a new and more prosperous era in Bay City or a historical albatross, representative of an era we can no longer afford, it is undeniably a beautiful building. With new management, new development and new ideas abounding in the City, there is a small satisfaction that it is centered around a structure with so much history.
As for Saginaw, a string of important developments and moves helped improve many of the city’s core areas. The awarding of $11.2 million dollars in federal Hardest Hit funds to the city helped tear down blighted houses and will benefit Saginaw in a positive way. The allocation will pay for the demolition or acquisition of 950 houses on the City’s dangerous buildings ordinance list.
The most visual improvements happened in Downtown Saginaw, with the development of a medical school, the increase in AT&T employees, and renovations of the Bancroft & Eddy apartments. And the unveiling of the new FirstMerit Event Park are all exciting indicators that businesses believe Saginaw a viable place to be.
The former North School was closed in 2008 as part of the Saginaw Public School District consolidation plan, and became identified as a neighborhood nuisance. The building will be acquired by Covenant HealthCare and demolished using State funds. The property will expand the Covenant Main Campus to further accommodate the construction of the CMU College of Medicine.
FALL IN Art & Sol was the inaugural event and a month-long celebration that was coordinated by the Great Lakes Bay Regional Arts Alliance and drew a plethora of arts organizations together, all crowned by one of the largest Solar Art Exhibitions ever staged in North America. Organizers hope to use this as a fulcrum to draw greater attention and more visitors to the incredible riches of artistic endeavor that we have populating our GLBA region.
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THE NEW GILDED AGE (Part 2)