Michigan Senate moves to strip domestic partner benefits
LANSING — The Senate Committee on Reforms, Restructuring and Reinventing approved a resolution Wednesday morning that starts the process to revoke partner benefits for unmarried state workers.
The benefit plan was approved by the Michigan Civil Service Commission in January.
Republicans, led by Sen. Rick Jones (R-Grand Ledge), have criticized the plan as being too expensive at a time when the state is facing a nearly $2 billion budget deficit.
Grand Rapids Republican Mark Jansen chairs the committee and introduced the resolution, which was approved on a party line vote of 4 in favor and 2 against. Democratic Sens. Rebekah Warren (D-Ann Arbor) and Coleman Young, Jr. (D-Detroit) opposed the measure.
Opponents argued the resolution to eliminate the benefit program was about financial management of the state, not about social issues.
“Some people will say this is a social issue,” said Jan Winters, who runs the Office of the State Employer. “This is about cost… We don’t have the funds to cover a benefit that could be in the tens of millions of dollars.”
The total projected cost of the unmarried partner benefit is approximately .003 percent (three one-thousandths of a percent) of this year’s estimated deficit.
Winters delivered a letter to the committee from Gov. Rick Snyder saying, “I urge the legislature…[to] reject the extension of health care benefits to the unrelated live-in companions of state employees and their dependents,” Snyder wrote in his letter.
Winters said in January the program was estimated to cost $6 million, but Wednesday, said because the program was so broadly written, the program was expected to cost the state $8 million in the first year. The program is slated to go into effect Oct. 1, the beginning of the state’s new fiscal year. It would be available to an estimated 22,000 members of the United Auto Workers Local 6000 and the Service Employees International Union Local 517M, as well as 13,700 non-union employees.
Benefits such as this are considered cash income by the IRS and the state treasury, and are taxed as such. Winters said she was unsure if the cost offsets from the increased tax revenues from the benefit extension was included in the estimates, but she said the increased tax liability for the state as an employer was factored into the cost. Employers pay a portion of employment taxes.
Under the state constitution, lawmakers can override a decision by the Michigan Civil Service Commission. The Commission determines the pay schedules and benefits for employees of the state. But in order for the legislature to overrule a decision by the commission, two-thirds of both chambers must vote to do so 60 calendar days after the recommendation is submitted as part of the budget proposal by the governor’s office.
The resolution is expected to have no issues passing in the Senate, where the GOP has a super majority. But it will face an uphill climb in the House, where the GOP is the majority but need to get 74 votes to pass the resolution. The GOP majority is 63 Republicans to 47 Democrats. That means the GOP will have to peel away 11 Democrats to garner the necessary two-thirds majority to overrule the MSCS decision.
If the legislature approves the resolution with the required two-thirds vote, it will be the first time such a move has occurred in the state.
Democrats challenged the resolution and the attacks on the plan during the hearing. Young challenged the constitutionality of the resolution, while Warren raised questions as to whether this was an appropriate business decision.
“If we’re going to run it like a business, why not run it like other businesses in the state?” Warren asked Winters in the hearing.
At least one union official has questioned the move. Ray Holman, legislative liaison for UAW 6000, says he is confused as to why the legislature is undertaking the action. He tells the Lansing State Journal that the issue should be dealt with at the bargaining table — not in the legislature.
Advocates in favor of the plan expressed concern about committee’s action and the resolution.
Emily Dievendorf, policy director for Equality Michigan, a statewide organization which advocates for lesbian, gay, bisexual and transgender rights, issued the following statement following the hearing Wednesday morning:
Representative Warren raised valid concerns with today’s challenge to the Michigan Civil Service Commission decision. As she stated, Snyder’s foundation for his proposal to turn Michigan around is rooted in his claim that we need to run Michigan like a business. The fact is that more than half of Fortune 500 companies consider it a priority to offer Other Eligible Individual benefit programs to their employees. Successful, growing businesses consider their bottom line and in doing so don’t deny their employees the support they need to have a healthy stable household because social instability equates to economic liability.
Unfortunately, Jan Winters, Director of the Office of State Employer, could not address this contradiction in Michigan’s approach to our economic revival, nor could she explain where the new inflated cost estimate for the extension of benefits came from. It is a convenient oversight in her presentation that all figures being released to defend the reversal of the Civil Service Commission’s decision are worst case scenario estimates that assume everyone eligible for the benefits would take advantage of them. We know that the actual likely participation rate is below 2 percent. Furthermore, support for the MCSC’s decision reversal ignores the reality that not providing health benefits is always more expensive than providing benefits and would suck money out of the budget that Michigan doesn’t have.
The issue has drawn the attention of national LGBT groups.
“Providing employment benefits, including health insurance, to the adult partners of state employees is an issue of fundamental fairness,” said Sarah Warbelow, state legislative director for the Human Rights Campaign which is a national group advocating for LGBT rights based in Washington D.C. “It is critical for employees to provide for the best possible future for their families, and if Michigan fails to provide equal benefits, the state risks losing a notable segment of its committed, talented workforce. The Legislature must make Michigan more competitive to retain and attract workers, and ultimately private industry as well.”