Rick Pluta

A legislative watchdog says Michigan’s unemployment office failed to catch overpayments and cases of fraud as the agency was hammered with jobless claims during the Great Recession.

The Michigan Auditor General says the mistakes cost taxpayers an estimated $260 million.

Like many states, Michigan’s been forced to borrow money from the federal government – almost $4 billion - to cover its jobless claims as unemployment reached peaks not seen in three decades (higher than 14%).

The Auditor General report found the agency ran into trouble handling all those claims.

The auditor’s sample found thousands of cases where the state accidentally overpaid benefits that were never recovered.

The audit also found instances where the state failed to detect cases of fraud that would have also been punished with big fines.

The unemployment agency is disputing some of the findings where the auditor determined there was fraud. The agency says in the other cases, it’s taking steps to fix the problems uncovered by the Auditor General.

Governor Rick Snyder has outlined a plan to withhold some state aid to local governments unless they make plans to consolidate services and make their finances more open. The governor says he wants to create new incentives for communities to save money and become more efficient.

He would revamp how the state shares tax revenues with cities and townships to reward those that come up with cost-savings. 

There was another protest today at the state Capitol – the third rally this week.  Hundreds of Lansing high school students walked out of class to march on the Capitol. 

Some of the students sunned themselves on the Capitol steps, took pictures, laughed, and chatted on their phones, while others stood by the road and waved signs. They called out to passing drivers to honk if they opposed budget cuts called for by Governor Rick Snyder.

Governor Rick Snyder says he expects teams of financial experts will soon start visiting cities and school districts showing early signs of financial stress. That’s part of the new state’s new fiscal emergency law he just signed.

Critics say the law gives too much authority to emergency managers appointed to run local governments that can no longer pay their bills. But the governor says too little attention has been paid to the early assistance the state is offering to local governments. 

Hundreds of senior citizens gathered in front of the state Capitol today to protest Governor Rick Snyder’s proposal to tax pensions.

Michigan is one of four states that does not collect an income on pensions. Snyder’s proposal would change that.

Connie Cole Burland, a retired Battle Creek school teacher, says it’s not fair to ask her to pay more if Snyder follows through on his plan to cut taxes for most businesses.

 "We gave them 40-plus years of service. We had a deal when we retired, and this is tax hike. You can call it whatever you want, but this is a tax hike. We had a deal."

Governor Snyder says it’s reasonable to ask retirees with good pensions to pay the income tax when younger people with smaller incomes have to pay it.

He says it is part of the “shared sacrifice” necessary to fix Michigan’s budget troubles.

Some Republican lawmakers are looking for an alternative to taxing pensions.

Senior citizens and union members are expected to rally tomorrow at the state Capitol to protest Governor Rick Snyder’s budget plans.

Seniors are taking aim at the governor’s proposal to start levying the income tax on pensions.

Michigan is one of four states that does not tax pensions.

Seniors say it’s not fair to tax pensions at the same time Snyder wants to reduce taxes overall on businesses.

But the governor says seniors who use state services and can afford to pay should share the tax burden:

"Because our population is continuing to age and we want a simple, fair tax system.

The idea here is lower-income people, whether you’re a senior or not, hopefully you’re not going to pay any income tax and we’ve structured the system to do that.

For people with higher incomes, we want something that’s simple, fair, and efficient," says Snyder.

The governor says he is open to compromise on details of his budget, but overall he stands by his plan. 

Governor Snyder has also called for cuts to public schools, local governments and state employee compensation.

State employee unions say budget plans that require them to take cuts while Governor Snyder’s department directors earn as much as $250,000 a year are not fair (that's how much Snyder's Budget Director, John Nixon, makes).

Stephen Reck is with SEIU Local 517M – a union that represents state workers:

"Now, I’m not saying the new director isn’t worth $250,000.

If you’re going to attract and retain good people, you’ve got to pay them a fair wage, and that goes for state employees whether an engineer, a scientist, a clerical worker, or a budget director, but be consistent and that’s all we’re asking."

In addition to the seniors and unions expected to protest tomorrow, another rally is planned for Wednesday by a group calling itself  "Working Michigan."

More protests are expected this week at the state Capitol as lawmakers continue to debate new rules for cities and school districts that run into trouble paying their bills.

The controversy is one of the first big showdowns between Republicans and Democrats this year over government reforms.

Unions and Democrats have pretty much given up on trying to stop the measures. They’ve turned their efforts to limiting its scope to protect bargaining rights, as well as cap emergency manager salaries, and require them to periodically meet with the public – so far without any luck.

Doug Withey is a Teamsters bargainer.

“Every community in the state, every governing body has an open meeting. Have the public involved with that. Nope. Not reasonable. Vote it down.”

But Republicans like Senate Majority Leader Randy Richardville say an emergency takeover would be the last option after all else has failed.

“The intent of the legislation is to get into an emergency situation and fix it before it becomes a catastrophe.”

Governor Rick Snyder says his goal is not more state takeovers.

 “Anytime you have an emergency manager come in, that’s a failure point. The best answer is to put in a better early-warning system – to figure out how to work with communities before they reach the point of needing a financial manager because a lot of things can be done in those earlier stages to avoid the issue and that’s the best answer.”

Right now, Richardville, Governor Snyder and Republicans have the numbers they need in the Legislature to prevail.

Governor Rick Snyder says agriculture is a key part of his strategy to focus economic development efforts on small businesses.

The governor spoke today to the Future Farmers of America state convention. He says there’s lots of room to grow small businesses processing farm products in rural areas of the state.

"There’s an opportunity there to do more economic development in our smaller towns and our villages, and one of those connections is if you look at it, we’re producing all these great commodity products, and if we can do more and more to say let’s continue the processing of these products right where they are being produced, that’s an opportunity to create jobs in these smaller communities. "

At the same time, Snyder says he wants to rely less on tax breaks and other industry-specific incentives to create jobs.

Michigan has the strictest retail pricing law in the nation. But now the state is poised to repeal the law that requires individual price tags on everything from canned food to lumber.

Retailers have been trying to get rid of the law since it was passed 30 years ago to try to protect consumers from being overcharged in checkout lines.

Michigan’s item pricing law was enacted in the 1970s just as electronic scanners were becoming commonplace. No other state has a law this expansive. Massachusetts requires item pricing for groceries.

Consumers like this law, and it was once-considered untouchable. But now with a new Republican governor and emboldened GOP majorities in the Legislature, Michigan is on the verge of repealing it.

Retired construction supervisor John McKenzie isn’t happy about that. He says price tags ensure that he knows the cost of something before he buys it, and that he’s being charged the correct price in the checkout line.

McKenzie says he also double checks the price against his store receipt when he gets home:

“If you don’t have that price tag on there, how do you know what that item was priced at back at the store? I mean, we’ve all picked an item off the shelf and when we get up there the item rings up differently.”

Michigan’s pricing law allows consumers who find a mistake to collect a bounty of up to $5 per error.

Retailers also face fines for not putting price tags on items. Five years ago, Wal-Mart paid a record fine of $1.5 million here.

Big retailers say the law is expensive for stores and for shoppers – although no one can say how much consumers might save if the law is repealed.  Smaller stores say it fails to take their needs into account.

Musician Mike Daniels shows off a guitar on the showroom floor of Marshall Music.

Owner Dan Marshall says his store complies with the law – mostly. There are some things, small or thin items like woodwind reeds, guitar picks, and drumsticks, that it makes no sense to price individually:

“We’ve got an entire display of drumsticks and in each bin, the price is clearly marked, but on each individual stick, they’re not.”

Marshall says, in some cases, labels would cover up package information that customers care about:

“Truth be known, practicality trumps law in some cases, and we’re in violation of the item pricing. Not maliciously, simply because it’s so impractical and unnecessary."

Marshall’s not alone. In Michigan, the price tag law may be the most widely ignored law since the 55 mile per hour speed limit.

Retailers think they’ve made their sale to the state’s political leaders that’s it’s time to close the books on Michigan’s one-of-a-kind price tag law.

The Michigan Senate has voted by a super-majority to reverse a state Civil Service Commission decision that would allow unmarried state employees to claim domestic partners on their health insurance.

Earlier this year, a state employment panel approved unmarried partner benefits that would include people in same-sex relationships and their dependents.

Republican state Senator Mark Jansen says the state can’t afford it – and voters have already spoken about domestic partner benefits by refusing to recognize same-sex marriages or civil unions.

“This is about economics. This is about our budget. This is about getting Michigan back on track."

But, Democratic state Senator Rebekah Warren says rejecting domestic partner benefits would hurt children.

“Families are always stronger when health insurance is accessible to everyone in the household.”

The measure now goes to the state House, where Republicans will have to muster a two-thirds majority vote to reverse the policy. Otherwise, state employees will be able to claim unmarried partners on their benefits starting October first.

Teachers, police, firefighters and other public employees plan to march on the state Capitol tomorrow.

They oppose a measure in the Senate that expands the authority of emergency managers named to run troubled local governments and  school districts.

Unions say the measures strike at their bargaining rights.

Union leaders hope for a big enough turnout to persuade Senate Republicans to delay a vote.

Unions are particularly opposed to a part of the legislation that would allow emergency managers to vacate bargained contracts.

Mark Gaffney, president of the AFL-CIO of Michigan, says that’s unfair when the state is also looking to cut money for schools and local governments:

“You’re saying to a city that it’s easy to get a dictator and you’re taking money away from that city that puts you at the point where you might need him or her.”

Republicans say the measures offer local governments early help to avert a financial takeover, but once it happens, emergency managers need crisis tools to set things right.

Scott Kincaid, a member of Flint City Council, favors keeping the law and the authority it grants emergency managers.

"These bills give them unlimited authority to do certain things that, currently, we were able to solve our problems without doing those things. The system works right now, and I’ve experienced it. And it worked very well. We had financial problems in our community and we turned them around in 18 months."

Flint was placed under an emergency manager in 2002. The city recently asked the state for the authority to sell bonds to cover a $17 million budget shortfall and meet its payroll.

The state Senate is expected to vote on the emergency management bills as soon as tomorrow.

A former Grand Rapids judge is the first Republican to formally launch a campaign for the U.S. Senate seat held by Democrat Debbie Stabenow.

This opens the campaign for a Republican primary that’s still more than a year away.

Former probate judge and conservative activist Randy Hekman is the first but by no means the last Republican to launch a primary campaign.

Big political names including former Congressman Pete Hoekstra, former Secretary of State Terri Lynn Land, and Republican National Committeeman Saul Anuzis are among those eyeing the race.

Hekman says he intends to run on reducing the national debt and getting more people to support hometown churches and charities.

“You’ve got to change hearts of people because they’re core of our problem – the problem beneath the problem is in my opinion this self-centeredness.”

"I believe that we need local charity. I believe, for example, if every man, woman, and child that has an income in our country could tithe 10 percent of their gross income, that would be one-point-four trillion dollars that could go to charity that could meet this need in a much more efficient and human-based and human-centered way than currently."

The winner of the Republican primary in 17 months will face two-term incumbent Democratic Senator Debbie Stabenow on the November 2012 ballot.

Several university presidents visited the state Capitol to testify on the higher education budget.

Governor Rick Snyder has called for double-digit cuts to universities, but he says universities can recoup some of that if they find innovative ways to save taxpayers money.

Thomas Haas, president of Grand Valley State University, told lawmakers that universities have limited options when it comes to funding.

He says keeping tuition rates low also helps makes college more accessible to low-income students:

"Please remember there is a direct relationship between state aid and tuition. When there is more of one, we need less of the other," said Haas.

"In the long run, the best way for you to hold down tuition is to put all you can into higher education appropriations, permitting us to find financial aid for our neediest students."

University of Michigan President Mary Sue Coleman said higher education institutions understand the budget challenges the state faces, but she also could not promise to keep down tuition increases if there are big cuts in state aid to universities.

Republicans in the Michigan Senate have begun the process of reversing the policy of extending benefits to the unmarried live-in partners of state workers – including those in same-sex relationships.

A vote on the Senate floor is expected next week.

A Senate budget subcommittee voted along party lines to reject the new benefits policy. Now, Republicans must muster super-majorities in the Senate and the House to reverse the decision by the independent Civil Service Commission to allow unmarried partner benefits.

The Granholm administration spent years negotiating the agreement with employee unions in an effort to ensure coverage for people in same-sex relationships.

But Governor Rick Snyder says that would cost too much money as the state faces a budget crisis.  

Senator Mark Jansen chairs a budget subcommittee. He says adding new benefits to cover unmarried partners could force additional costs onto other state employees who are already being asked to pay more for their health care.

Jansen says the Civil Service Commission made the wrong decision as the state faces a budget crisis.

“I do respect it, but we’re broke, and so now it literally is adding eight million dollars at least to my bottom line. I can’t afford to add anything anymore. So it’s time to take a breath and say, let’s help those that we have right now.”

Ray Holman is with U-A-W Local Six Thousand, which represents thousands of state workers. He says the Legislature should not renege on a deal that took years to negotiate.

“This was negotiated back in 2004 and the appropriate place to deal with this stuff is the bargaining table, and to respect the agreements that have been made. So this should be handled by the Civil Service Commission and we obviously deal with the office of the State Employer on these matters.”

If the Senate and the House don’t reverse the policy, it will take effect October first.

The Michigan House could vote on a bill this week that protects doctors who say “I’m sorry” from having the comment used against them in a lawsuit.  

Rick Boothman is the chief risk officer for the University of Michigan Health System. The U-of-M adopted a policy 10 years ago to encourage doctors to show compassion and sympathy when a medical procedure goes wrong.

“The practice of medicine is inherently very risky and when things go badly, it can feel very punitive. Historically, we have chilled the communication between patients and physicians because physicians are afraid of saying anything that’s going to get them into trouble.”

Boothman says it’s impossible to tell if the policy is the cause, but the number of malpractice lawsuits against his hospital has gone down in the past decade.

The bill before the Legislature would not shield doctors from liability if they admit a mistake.