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Dueling bills will cut benefits for Michigan legislators
LANSING — The House may soon vote to repeal retirement health care benefits for current legislators.
Rep. David Hildenbrand, R-Lowell, is the sponsor of a bill that would block those benefits for legislators elected after February 2003. That measure would affect only current lawmakers.
“We’re asking people to take cuts and we’re cutting a lot of government programs, and I think we need to lead by example as the Legislature,” Hildenbrand said. “It’s just too generous of a benefit. Nowhere else in the private sector can you work for six years and receive that kind of a health care benefit.”
Under the current system, legislators are eligible to receive retirement health care benefits after serving six years in the House or eight years in the Senate. Legislators are eligible for the benefits at age 55.
The House approved a bill sponsored by Rep. Dian Slavens, D-Canton, to end retirement health care benefits for future legislators beginning with the 2010 election. The bill passed by a near unanimous vote of 103-1 with Rep. David Nathan, D-Detroit, as the lone dissenting vote.
Rep. Jennifer Haase, D-Richmond, said that while she wouldn’t vote against Hildenbrand’s bill, his legislation doesn’t go far enough.
“It is absolutely unacceptable that Michigan lawmakers receive lifetime health care after just six years of work, all while our taxpayers foot the bill,” Haase said. “Like the legislation passed by the House, it doesn’t go far enough to get rid of this excessive perk.”
Haase said she will press for Slavens’ new bill, which would abolish legislative benefits for post and present legislators.
“In the meantime, I’ve chosen to voluntarily give up the extravagant benefit,” Haase said.
Hildenbrand said one concern is whether it is constitutional to repeal benefits for current and former lawmakers.
He said the House encountered a similar problem last year when it attempted to reduce the salary of current legislators, and the attorney general ruled that it would be illegal to do so.
Attorney General Mike Cox’s office did not respond to requests for information regarding the issue.
If it were unconstitutional, the Legislature and voters could amend the constitution to repeal the benefits, Hildenbrand said.
House Speaker Andy Dillon, D-Redford, and other party heads are leaning toward excluding current and former members, Hildenbrand said.
In 1996, the Legislative Retirement Service provided retirement health care benefits to 199 former legislators, their spouses and dependent children at a cost of $6 million. An additional 48 retired lawmakers were entitled to the benefits but were ineligible because of the age limitation.
In 2006, 276 people were covered under the LRS, a 39 percent increase, costing approximately $13.9 million. Another 51 retired legislators were entitled to the benefits but were too young.
The annual cost of the current system will continually increase due to the high turnover rate caused by term limits, Hildenbrand said.
“It will save the state millions of dollars in the long run, especially with term limits,” Hildenbrand said of his proposal. “There is a lot of turnover and a lot of people serving six years and then they’re gone. When they turn 55, they’re going to get these benefits and, ultimately, it’s going to accumulate into a huge liability for the state.”
Rep. Joe Haveman, R-Holland, said he would vote for Hildenbrand’s bill, but he is concerned about the way the issue is absorbing the Legislature’s attention.
“It takes our attention away from setting policy,” Haveman said. “These discussions are all just political games played by legislators aimed at making people on the other aisle look bad.”
“They’re not really based on policy, although they might be policy. They’re more about political fights between Republicans and Democrats,” he said.
Haveman said he wished the House bill included current legislators.
Rep. Rick Jones, R-Grand Ledge, said he supports Hildenbrand’s bill. Jones is also the sponsor of a bill to reduce legislative retirement health care benefits.
Under Jones’ bill, legislators would earn 3 percent annually toward their retirement health care benefits. Legislators who serve six years in the House would not be eligible for benefits although those who also serve a minimum of 10 years in the Legislature would be eligible for 30 percent.
Rep. Richard Ball, R-Bennington Township, said he would vote to eliminate current and former member’s benefits but believes the Legislature needs to compromise.
Ball is the sponsor of another bill to restructure benefits based on time served that would allow legislators to earn 5 percent annually toward their retirement health care benefits.
Under Ball’s legislation, a lawmaker who served six years in the House would receive 30 percent coverage, and a legislator who served an additional eight years in the Senate would receive 70 percent coverage.
“You cannot justify what we have now, but on the other hand, repealing all benefits isn’t fair either,” Ball said. “So I don’t favor the total ban. I would rather structure it similar to the state’s system.”