Archive for the ‘Updates’ Category

Dear Colleagues:
I thought you might like to know the latest on whom is doing what as it develops daily at the Capitol.  As you know the Governor-elect (R.Snyder) is slowly putting a Cadre together with which he hopes to reinvent Michigan!  I have contacted many of the individuals to congratulate them and let them know we look forward to working with them in the Future.
Most all of these folks we have worked with and known for many years.  All of whom are good people and persons with integrity.
I am sure you will read about them in the Newspapers, as time goes on and the Inauguration approaches.
Their names and titles are as follows:
Dennis Muchmore…  CHIEF of STAFF…Sold his Lobby-firm, retired
Dick Posthumus……   LEGISLATIVE LIAISON…Legislator, Leader
Mike Gadola…………   LEGAL AFFAIRS…… Lawyer,Sup/Court Wkr.
William Rustem…….   Director Strategy..Pres. Public Sector Cons.
Geralyn Lasher…….   COMMUNICATIONS Dir.DCHCommunication
Michael Finney……..Economic Development…Ann Arbor Business
Stephanie Comai…..State Management Issues..Govt Affairs, Engler
Doug Rothwell………Transition Team Chair..MEDC President
Sharon Rothwell……Aide to Doug…..worked for Engler Campaign
Nancy Vreibel………..Former DCH Budget, Aide to Senate Aprops.
Mark Murray………….Former Budget Director, Meijer’s Store Exec.
Linda Gobler…………Michigan Groceres Assoc.  Inauguration Chair
Patricia Morradian….Henry Ford Director, Co-Chair Inauguration
TRANSITION TEAM–Mental/Community Health
Nancy Vreibel………..Former DCH Employee, Senate Approps Aide
Lisa Truscott…………
Geralyn Lasher……..DCH Communications
Carol Isaacs………….Deputy Director for Attorney General Cox
Lynn Alexander……..
We will keep you apprised as things develop further.  The Senate meets the First week in December and might possibly take up the Mental Health Parody Legislation, if the House kicks it over to them.  It is looking more and more remote however.
See you all Friday,

Dear Colleagues:

Targets have been released and the Budgets are moving! The Governor and her Department of Management & Budget Director and Treasurer Robert Kleine, met with House and Senate Leadership; and Budget Targets were presented, agreed upon, and officially released!

Meetings are being quickly scheduled for Conference Committees to gather and work out the details on Departmental Budgets. I am told that a preliminary meeting between Senate DCH Budget Chairman Kahn and House DCH Budget Chairman McDowell is set for next Tuesday, September 14th. The Full Conference Committee meeting will follow Wednesday, and the DCH Budget will pass both Houses by September 23rd.

At first blush, it appears that your calls and letters have not gone unheeded. The Target Agreement reflects an increase of General Fund Moneys of about $122 Million dollars over the 2009/2010 DCH Budget! Thus instead of $2.024 Billion in General Fund dollars as proposed by the House  for 2011, and compared to this years’ (2009/2010) total figure of $2.309 Billion, the Target Agreement reflects a General Fund total of $2.431 Billion for 2010/2011. Thus giving us an additional $122 Million in General Fund dollars for the DCH Budget in the coming Fiscal Year! Thankfully a slight improvement, which was hoped for but not anticipated, for 2011!

Obviously this will be good news on top of the fact that proposed Departmental cuts in Administration have been reduced from the Senate version of 20%, down to a more manageable 3%. All this without raising taxes!

There are some fund shifts proposed in the package, such as moving the extra tobacco settlement moneys from Public Health to Medicaid ($102 Million), and the $208 Million surplus in the School Aid Fund moved to cover a deficit in the Community College Budget.

Some of the anticipated savings/revenue for 2010/2011 is based on dollars derived from State employees retiring early. Legislation is being developed to offer a 1.6% formula to encourage some of the State’s 12,000 eligibles to retire early. The 2010/2011 Budget anticipates savings of $60 Million based on State employees retiring. I believe we will see no more than $25 Million in savings. State employees will begin a phase-in of a 3% contribution toward their own health-care costs over the next five years, if they do not retire under the target agreement for 2010/2011. The targets provide for a  1.6% sweetener over the normal 1.5% formula. I anticipate that close to 3,000 State employees will retire early, although the Governor predicts 6,000 retirees, and up to $60 Million in savings.

If the State employees retirement plan does not pass, the Target Agreement calls for a cut in local revenue sharing dollars, which is designed to encourage union support for the early retirement proposal.

There will be a “tax amnesty” program offered to allow people to be held harmless while catching up on back taxes, which should enhance State revenues in 2011. The total amount to be realized, due to tax amnesty, is not clear. However, we will see a freeze on State revenue sharing payments to cities, villages, and townships. And certain liquor “reforms” will raise an anticipated $9.1 Million in increased revenues.

The DCH increase in General Fund dollars is also intended to reflect the May 2010 consensus caseload estimates, which are significantly higher than the 2009/2010 original budget projections. Thus a need to cover the Medicaid caseload increases, due to higher unemployment and additional job/business reductions in Michigan.

This memo is intended to reflect the latest developments pertaining to the DCH 2010/2011 Budget Bill, as I see them, and the figures contained herein could change upon final Bill passage, subject to line-item vetoes by the Governor!

I will keep you informed of future developments. If any questions, kindly call 517-319-2580.


Paul Tarr

Dear Colleagues:

At this moment, Senate Bill 1152 awaits the scheduling of a Conference Committee meeting between members of the Michigan House and Senate for the purpose of debating and deciding differences between what was proposed by the Senate, and that which was finally recommended in the House version.

You have already received the list of the members of the House and Senate Conferees. I anticipated that they would call a meeting this week to inititate their discussions on the differences. However, the Governor’s office (DMB, Dept. of Treasury) has not yet finalized Budget Targets for 2010/2011. Thus, our Legislators involved with the DCH Budget, have no target as to projected revenues. Therefore they do not know how much to cut from the DCH Budget and whether or not the deficit will be greater or less than what was anticipated in April/May 2010.

It would appear with this being the case, that Budgets will not be resolved in totality for this State, and more specifically for this Department, by July 1, 2010.

I am told by very reliable sources, that Public School Budgets were agreed upon between the House and Senate, with approval of the Governor, but the MEA came down hard on the agreement and created enough disharmony to hold up the Bills. Such action holding up Education Bills can complicate the Budget for 2010/2011 this summer. It appears at this time that we will not have a DCH Budget, being sent to the Governor for signature, prior to July 4, 2010. It could easily be September before the Budgets get worked out, unless Public School Budget and DSS Budgets  find agreement within the next 30 days.

I will keep you posted.

The Beat Goes On!!



The Conferees have been appointed for the Appropriations Conference Committee on Community Health for 2010/2011.

The Senate Conferees are:

Senator Roger Kahn, Senator John Pappageorge, and Senator Deborah Cherry.

The House Conferees are:

Representative Gary McDowell, Representative George Cushingberry, and Representative Kevin Green.

The Conference Committee is initially expected to meet this week, with date and time to be determined.

I will keep you apprised.

Paul T.


Dear Colleagues:
The DCH 2010/11 Budget Bill (SB-1152) passed the Full House Appropriations Committee this afternoon and will be going to the House Floor tomorrow.  I expect the Bill to run the House floor with any Republican amendments being defeated, just as they were on the Full Appropriations Committee this afternoon.  The Bill contains some additional changes which will allow for differences which will send the Bill to Conference, as I am sure the Senate will not accept the Bill as amended in the House.  Conference Committees will start to meet on or about June 8,9,10 with concurrence and passage by June 24th.  The Governor should have most of the Budgets for Signature by June 26th.
I will send you an updated summary of the totality of the Budget Bill tomorrow but the House version is about  $147 million higher than the Senate version yet still $600 million under the governor’s budget.  Remember though, the Governor’s budget contained $750 million in physicians’ QAAP (tax), which never passed and thus would appear to be “funny money”.
The House version contains $100,000 for the “Island medical clinics” (B
eaver, Drummond and Mackinac) as well as a 3% raise for Union employees working for the State. But very key was the addition of $53 million to raise the General Fund moneys above what the Senate cut.  Public Health funding was also increased for Lab services, epidemiology and TB programs restoring the Houghton Lab.  The House provided $5 million Gross for the 2nd Disproportionate Share Hospital Pool to be restored.(which the Governor vetoed last year.  The Senate raised it to $10 million this Spring!  The House also did not concur with the Senate reduction in physician payments of 4%, and thus restored those dollars in Medicaid payments.  The House retained the ADULT Dental Benefit Services which the Governor eliminated and the Senate restored.  The House did not go along with the SEnate in transferring the MI-Child program to the Medicaid HMOs.  Major request by the House was for “DCH to take another look at determining PIHP allocations for Mental Health Services by removing geographic factors during the NEXT Bidding process!”  Such verbage indeed bears discussion as this could cause serious deficits outside of South East Michigan Area, if taken literally, yet it was made clear in the Hearings that Detroit Wayne is near the breaking point in adequate service provision according to their Leadership.
The Beat Goes On!



Dear Colleagues:

There will be a Health Policy Committee meeting presentation on National and State Health Care given by Kaiser Commission on Medicaid and the Uninsured, Commissioner Ken Ross of the Office of Financial and Insurance Regulation, and by Director Janet Olszewski, MDCH.

The meeting will take place tomorrow morning, Tuesday, May 25th, at 10:30 a.m. in the House Office Building.

Also, on Thursday, May 27th, the Senate Appropriations for the Community Health Department will hold a meeting with presentations on the Michigan Health Information Network.

I will represent at both of these meetings, and would welcome any or all wishing to attend with me. Kindly let me know of your availability. I will keep you aprised.


Paul T.

Dear Colleagues:

This morning the House Subcommittee on Appropriations for the Department of Community Health, chaired by Representative Gary McDowell, met at 8:00 a.m.. Senate Bill #1152 (H-1) was passed, with one additional amendment.

The amended language creates “Section 1603″, and reads as follows:

“Section 1603 (1) The department may establish a program for persons to purchase medical coverage at a rate determined by the department..

(2) The department may receive and expend premiums for the buy-in of medical coverage in addition to the amounts appropriated in part 1.

(3) The premiums described in this section shall be classified as private funds.”.

The Gross Appropriation to DCH as proposed by the Governor was $14.4 Billion. The Senate passed the DCH Budget at $13.6 Billion. The House version of SB-1152 sits at $13.7 Billion or $635 Million above the present year Budget, which expires October 1st, 2010.

Highlights of the Bill en route to the Full House Appropriations Committee are as follows:

The Bill returns the 3% salary and wage increase for DCH employees, which was deleted by the Senate. This line added $5.8 Million to the Budget, in economic adjustments.

An additional $2.2 Million was added to the State Disability Assistance Program, Substance Abuse Services, supporting indigents who reside in substance abuse facilities who do not qualify for SSI.

The House restored funding to local public health for immunizations and infectious disease control, etc.

The House added $600,00 and 6 PTEs to restore the Public Health Lab at Houghton.

The House added $3.7 Million to restore funding to the Transitional Medical Assistance Program.

This Legislation will go to the House floor and then to the Senate next week for rejection and referral to Conference Committee where all final differences will be resolved by June 20th, 2010.

As always, should you have questions or concerns, please do not hesitate to contact me. 



Dear Colleagues:
I am writing this after listening to two weeks of Testimony and presentations on the proposed 2010/11, DCH Budget during which dozens and dozens of people spoke on the need for increased Medicaid funding, the losing battle in Neighborhood Service Organizations, rising Infant Morbidity, increased teenage pregnancies, home foreclosures, job losses, family breakdowns, reductions in Medicaid reimbursement and Medicaid Providers and continued losses in General Fund dollars for Mental Health.  The Public Health system once a showplace of Care and efficiency, has been steadily strangled according to its Division Chief, over the past 8 years and is dying. I worry about what may happen in the near future and how these clear needs expressed by many people who were suffering will be meet.  Like the Adult Dental Services which the Governor eliminated last Fall.  I have spoken to both the House and Senate on this issue and currently it is in the new Budget Bill with support in both Houses…..but……will the Governor Veto it? I know not.
For the 46 Statewide Community Mental Health Services Program established in this State to serve all 83 Counties, there are 18 prepaid inpatient health plans (PIHP’s) functioning as managed care entities that administer the medicaid specialty services and supports, managed care waiver for mental health and substance abuse services.
From FY 2004 through FY 2009, there has been a $70 million reduction in Federally matched Service dollars due to reduced State General Fund moneys. This represents a cut of almost $40 million in State Mental Health dollars and a 33% loss of service capacity to persons who may not qualify for Medicaid because they may have some part-time work or low paying job.
In addition, in light of the Governor’s request to push experienced, State employees into retirement by October 1st, 2010, between 60% and 70% of State Hospital Directors, 18% of all hospital staff are going to be eligible eligible to retire. Some State hospitals have close to 29% of their employees eligible to retire by 10/1/10.
All this in a time when Adult Psychiatric Hospital Admissions were up over 5% in the past year. The State’s lone Children’s Psychiatric Facility (Hawthorne Center) Admissions increased by 30% in 2009.
Mental Health Services delivery, as once known, are being changed to accommodate these General Fund reductions by forcing waiting lists in many areas of our State and eliminating some Services to persons previously served who were poor and in need but lacked Medicaid eligibility.
If the proposed Senate cuts to Mental Health dollars are implemented ( an additional $56 million) in 2010/2011, it is my opinion that proposed service delivery systems over the next 15 months could develop dramatic flaws that would take years to recover, if at all.  For once you cut out the Services to people and eliminate the system flow of professional providers delivering those services……. if you do not have alternatives for delivery and the need remains great, people will suffer.  That is just plain wrong.
Let me be clear.  I do not have a problem with pruning the Tree of Life.  I do not have a problem with clearing out limbs that have not served well, or eliminating decay, waste or dry rot. Especially in times of drought.  I do not have a problem with trimming back so that the Tree can carry itself better and withstand the winds of Time.  What I am referring to is cutting out the roots.  Doing this saying there is no monies while at the same time you put $52 million into a New “State Police Building”, and pumping another $150 million in direct subsidies to “Movie Industry” , which I am told is seen to be delivering 10 cents on a dollar invested over TEN years!  What are our priorities?
 On top of all that….then presenting a “Balanced Budget” based on moneys anticipated by hiring a “Medicaid Inspector General” (to clamp down on Fraud and collect $75 million and put it in the State Bank) and showing income derived from charging a “Physicians Tax” (QAAP) that was defeated last Fall and will not see the Light of day before the start of the new Fiscal Year on October 1st, 2010, and has not sufficient votes in either House. Thus their is a clear deficit of over $750 million in the “2010/11, “balanced Budget” before it is even passed by the Legislature.
So where do we go from here?  Well, I personally believe that State Revenues will pick up over the next 6 months, from last years figures.  I also believe that the Legislature will look longingly at raising Revenue for 2011, during the Lame Duck session, which occurs AFTER THE FALL ELECTION.  The problem with that is that if the Republicans gain a victory in the Governor’s Seat the Democrats will not want to pass legislation to make the newly elected Governor quickly look good over the next year……..when Blanchard lost he did nothing to improve the State of the Economy for the incoming elected Governor, his last two months, to my knowledge.
I thus do not see a major overhaul in the Tax Structure in Michigan this Fall, but there may be some tweaks to help ease the Transition into 2011 as far as raising Revenues to help meet anticipated shortfalls that cannot be covered by the Stashed Stimulus Funds (about $350 million) and slight improvements in collected taxes due to some increases in auto sales and housing improvements/remodeling and possible new construction.
All this will be setting the scene for this Fall, while at the same time hundreds of Teachers and State Employees will probably Retire and carry out with it the bulk of Institutional knowledge of how this State is run and its children educated, with most of the retirees being Middle and upper Managers in the Systems. 
How will the State maintain continuity?  What will be the norm for a while?  CONTRACTS will be developed between former employees and the State and if that is forbidden by Legislative Language in the retirement Bill, than small companies will be formed to contract for services with the State and those small companies will then pay the retired experienced State employees who choose to continue to work, for their services probably in the same Arenas where they worked before.  The savings to the State will be their Benefits will be paid through the Retirement system and thus no benefits cost to the State payroll.  New employees will have lower salaries and less benefits so that too will be a cost savings.  All this has to take place however over a 60 day period to keep the system flowing and I doubt that such a smooth transition can occur and keep Services running without any bumps in the process.
The Governor still has some additional Cards to play in that she can issue another EXECUTIVE Order, creating additional “Furlough Days” and hiring Freezes into November, and she can call for Additional reductions over the Summer, depending on the Status of the Budget Bills presently before the Legislature and scheduled to be on her desk by July 1st, 2010.
Time will Tell………….The Beat Goes On!
Sorry this turned out to be so long, but it needed saying.
I would appreciate your comments or additional concerns.
Please write or call at your earliest convenience

Public Testimony will be taken by the House Appropriations Subcommittee on Community Health, chaired by Representative Gary McDowell

On Wednesday morning, April 21st, Mike Head CMH Mental Health Division Director, presented the Mental Health portion of the DCH Budget.

Persons wishing to testify in that regard will be heard next Monday, April 26th beginning at 9:00 a.m. in the House Appropriations Committee Room (352) of the Capitol Building.

If any of you wish to testify, I would be happy to help facilitate.

Please contact the office at: 517-319-2580



 Dear Colleagues:
This morning, beginning at 8:00 a.m., the House Subcommittee on Community Health met in Room 352 of the Capitol. Ms. Janet Olszewski, Director of the Michigan Department of Community Health, presented her Budget as passed the Senate in March 2010.
The agenda for next Monday will include public testimony on Medicaid and Mental Health.
I expect SB-1152 will be going to Conference by May 28th, 2010.
Call if you have further questions.
Paul T.