From Adversaries to Allies: Lessons and Warnings from Michigan’s Brief Era of Bipartisan House Control 

By Rick Pluta

Sharp words and stark differences are nothing new in American politics, but in recent years it seems like the anger’s amped up.

There was a period when Michigan politicians were forced to adopt a cooperative spirit. Republicans and Democrats in the state House of Representatives had to give up their quest for dominance and work together on an equal footing.

Voters statewide in 1992 surprised the nation by voting for the Democratic presidential candidate for the first time in 20 years, and by sending an equal number of Republicans and Democrats — 55 and 55 — to the state House.

“We were forced to come together,” said Paul Hillegonds, CEO of the Michigan Health Endowment Fund, who served as the Republican co-speaker during the session.

The 1993-94 “shared power” session was very productive, including a landmark overhaul of the state’s school funding system. That period is looked back upon as an idyllic moment in Michigan political history, but it would not last. Still, there are lessons from that time that may be applicable to resolving some of today’s conflicts.

Participants in the “shared power” session say relationships were key to making the arrangement work. The state’s term limits amendment still had not kicked in, so House members typically had long histories of working together in the prior years of Democratic control.

“I think the culture was created because there were relationships,” said Kirk Profit, a Democrat who served as the co-chair of the House tax committee and has remained in Lansing as a lobbyist. “Each committee chair had been there a while and had to become an expert on their issue. The same is true for the minority vice chair, even if they didn’t have the same juice,” Profit added.

Profit said committee chairs and ranking members typically served eight to 10 years before getting a gavel. House members are now limited to six years, so that authority is wielded by a greener generation that does not have the advantage of building that expertise.

The arrangement also occurred before smartphones, text messaging, email and social media.

“I don’t know if shared power would work today given how we communicate,” Hillegonds said.

Daniel Loepp, president and CEO of Blue Cross Blue Shield of Michigan, served as chief of staff to the late Curtis Hertel Sr., who was the Democratic co-speaker during the 1993-94 session. Loepp wrote a book about his experience, “Sharing the Balance of Power.” He agrees with Hillegonds.

“It’s a 24/7 news cycle. People are responding in nanoseconds,” he said. “The world has changed so much.”

Loepp said those dynamics do not lend themselves well to solving knotty issues the “shared power” Legislature tackled, such as school funding.

At the time, schools relied on local property taxes for their operating funds. The result was spiraling millage rates, growing disparities between wealthy and poor districts, and widespread voter dissatisfaction.

A political maneuver gone awry resulted in the Legislature and then-Gov. John Engler scrapping the school funding system without a replacement plan in place. A shifting, bipartisan group of state lawmakers took up the task for crafting a replacement. They worked all the way to Christmas Eve of 1993 and the result was Proposal A, adopted the following March by voters. It stabilized property taxes, partially dealt with the funding disparities, and remains a popular example of bipartisan cooperation.

Hillegonds said that effort would have failed if both sides were locked into caucus positions.

“Curtis and I had to let go, and give our caucus members room to problem-solve,” he said.

“If you think about it, it’s amazing that it happened, but everybody was in the mindset of ‘you have to come up with something,’” Loepp said. “I think people back then who were serving had a sense of what a special situation it was. I think human nature puts you on your best behavior.”

It would be difficult to recreate all the conditions that made “shared power” a success. Not only has technology changed, so has Michigan politics. Before “shared power,” it was presumed the state House would be run by a Democratic majority. Since the 1993-94 session, the House majority has shifted five times, with every election now a fierce battle for control.

“Bipartisan compromise becomes problematic for a party that’s seeking to win back power,” said Frances Lee, a University of Maryland political science professor.

Lee studies partisan conflict in Congress and state legislatures, including Michigan. She said Michigan is currently among the most partisan in the country, and the constant battle for control is a contributing factor.

“If a party that’s not controlling Congress, or any legislature, wants to win back power, it needs to make an argument to do so,” she said. “It needs to say that the people in power are not doing a good job. Well, if you work productively with the opposing party … that’s very problematic for making the argument that they’re doing a bad job.”

But Loepp and Hillegonds say there are lessons from the “shared power” session that can be applied today, both inside and outside the House Chamber.

“Quit sending emails and texts and go talk to somebody,” Loepp said. “Not that emails and texts aren’t useful. They are. But, especially on sophisticated, complicated things, it helps to cut through the clouds.”

Hillegonds said in the era of term limits, leaders need to include relationship-building that crosses party lines into their planning.

“Any reform idea should be coupled with the question, ‘Does it build relationships or not?’” he said.

And he adds that lawmakers should slow down and get to know one another before they start making policy.

“I would tell committee chairs, ‘Don’t move any bills for three months. Go on the road with your committee. Build relationships and and learn,'” Hillegonds said.

Rick Pluta is the state capitol bureau chief for the Michigan Public Radio Network.

Blogging #MPC17: A Platform for Millennial Coverage

For the fourth consecutive year, Blue Cross Blue Shield of Michigan (BCBSM) collaborated with the Detroit Regional Chamber to bring another voice to reporting on the Mackinac Policy Conference. The Blogger Zone in BCBSM Media Row provides bloggers who attend the Conference a chance to have the same access as the traditional media outlets, as well as provides the Conference a platform to reach a younger audience.

Media consumption has shifted in the digital age and people seek and engage with it in several ways, millennial readers look to social media and blogs for information pertinent to them.

“Blogs serve a very important purpose because each blog has a unique community of readers that are very loyal and interested in certain subjects that these people as bloggers can cover,” explained Andrew Hetzel, vice president of corporate communications for Blue Cross Blue Shield of Michigan.

This year, the following blogs covered the Conference: Autoblog, Daily Detroit, Detroit Unspun, A Healthier Michigan, MI Blues Perspectives and Positive Detroit.

Detroit Public Television (DPTV) put together a video on the Blogger Zone at the 2017 Mackinac Policy Conference, view the video below:

Read some of the bloggers coverage from this year’s Conference below:

Autoblog – Michigan Ponders its Automotive Future in the Connected Age

Daily Detroit Five Secrets to Making Awesome Things Happen With Jason Hall of Slow Roll

Detroit Unspun – Bring It to The Table’s Julie Winokur Confronts Politics, Civility at Mackinac Policy Conference

MI Blues Perspectives Five Positive #MPC17 Takeaways for Detroit Residents

Positive Detroit – Matt Cullen of Rock Ventures Answers: What’s Next for the QLINE, Riverfront and More

Visit mpc.detroitchamber.com to view more coverage and videos from the Conference.

Get Out Front

Blue Cross Blue Shield of Michigan reform expert advises tackling the ACA now

By James Martinez

Page 48

As the vice president of the Office of National Health Reform for Blue Cross Blue Shield of Michigan, Kirk Roy has a front-row seat as the implementation of the Affordable Care Act (ACA) continues to redefine the landscape of health care. As the reforms are being phased in, crucial information to businesses including costs are yet to be settled. The Detroiter interviewed Roy to discuss how small businesses should be preparing for October 1, when individuals and small businesses can purchase benefits through the new health care exchange.

Roy’s overwhelming message was: Visit your insurance advisor now and learn how your business will be impacted before it negatively impacts your bottom line or employees.

How will ACA affect small businesses and health benefits for their employees?

For small businesses (50 eligible employees) it will change the actual benefits they are required to offer and how the cost-sharing and other factors that make up a health plan are structured. It’s going to change the price of those benefits. There are going to be many new administrative and compliance processes. And then there is the question of ACA giving employers new options as to whether or not they should offer benefits and how they should be offered. Many small employers will have the opportunity to as if they should be doing something differently than offering employer-sponsored benefits.

What should small business owners know?

Know enough to know what questions you’re going to need to answer: 1) Do I know what I’m trying to do as a business? 2) Do I know where benefits fit in with what I need from my employees to make my business function? 3) Given those two things, do I know how many of my people are eligible for subsidies and what would that option means to them compared to what they are getting today? and 4) Are there any other requirements of me that would put me in the spot to pay a penalty?

Answer those questions now, but know that your final decisions will be based on the prices that are not yet set. Know that most people will see the normal fluctuation in their benefits renewal, but know that some will see more volatility as the exchanges are in place.

What is going to happen to health care benefit prices for employers?

It’s hard to give a definitive answer. There are a bunch of competing forces and it depends on the starting points for your business. There are taxes and fees associated with the ACA that are going to drive the price up. Also, the ACA will change what are allowable factors to set rates on businesses for the benefits they provide. The old system would take characteristics of certain businesses and set their rates differently based on a variety of factors. All of those things are going away. You had a situation where some small businesses were getting a surcharge under the old system. Those surcharges will go away and so their rates will go down.

Some businesses that received discounts will lose those, so those prices will go up. We as an industry won’t be able to give those answers until probably the third quarter once more information is available.

Why not wait until those prices are set?

It’s smart to get ahead of the changes, allowing you to be prepared as a business owner, and giving your employees a sense of comfort as to what’s to come.  Business owners should  answer those first couple of questions now to avoid last-minute decision making during what could be a chaotic and confusing time in the marketplace – businesses should make every effort to get as far ahead as possible. It’s a bit of a Catch-22 for small businesses. They don’t want to think about it, but if they engage now, we can’t give them all the answers (due to the impact of the regulations on prices being finalized). But they need to get started. They need to take it in bites.

What are you seeing from employers who might opt not to offer benefits?

We see some employers that look at the wage structure of their workforce, they are very paternalistic and have 10 employees and they are like family. However, in the system they see that their employees can actually get a better plan at a lower cost by getting a plan on the exchanges and getting the federal subsidy, rather than going through their employer. That is a very compelling case for a lot of employers. Their cost will be reduced, they don’t have to pay the penalty, if they are a small business and all or some of their employees can get covered (through the exchanges). It’s a bit risky for employers, because we don’t know yet how the exchanges will work – but everyone is talking about it.

What should employers be aware of with ACA and the impact on their taxes?

When it comes to taxes be aware of what taxes are in your prices. Be aware of tax credits if you are in that fairly small group of (businesses) that may be able to get some money for it. And if you make the decision to stop sponsoring employee benefits, be aware of the impact to your bottom line and the impact to your employees’ bottom line as far as tax impact.

If you’re considering other options, and you’re going to have folks go to exchanges, you need to think about “what is the bottom line impact to my business” and “what is the impact of that decision to my employees?.” “What is the net tax impact if you cut benefits to your employee but increase salary to compensate?”. That’s going to be a conversation that you’re not going to want to be surprised by when your employees come back and say: “Hey, what’s the deal?”

Business owners should  answer those first couple of questions now to avoid last-minute decision making during what could be a chaotic and confusing time in the marketplace — businesses should make every effort to get as far ahead as possible. It’s a bit of a Catch-22 for small businesses. They don’t want to think about it, but if they engage now, we can’t give them all the answers (due to the impact of the regulations on prices being finalized). But they need to get started. They need to take it in bites.

What are you seeing from employers who might opt not to offer benefits?

We see some employers that look at the wage structure of their workforce, they are very paternalistic and have 10 employees and they are like family. However, in the system they see that their employees can actually get a better plan at a lower cost by getting a plan on the exchanges and getting the federal subsidy, rather than going through their employer, which is a very compelling case for a lot of employers. Cost will be reduced, they don’t have to pay the penalty, and given the size of their  business, all or some of their employees may be able to get better coverage through the exchange. It’s a bit risky for employers, because we don’t know yet how the exchanges will work — but this is a popular and continuing point of discussion.

What should employers be aware of with ACA and the impact on their taxes?

When it comes to taxes, be aware of what taxes are in your current prices. Be aware of tax credits if you are in the fairly small group of [businesses] eligible for funding. And if you make the decision to stop sponsoring employee benefits, be aware of the tax impact to both your business and employees’ bottom line.

If you’re considering other options, and you’re going to have employees go to exchanges, you need to think the bottom line impact to the business and what is the impact of that decision to employees? What is the net tax impact if you cut benefits to your employee but increase salary to compensate? That’s going to be a conversation that you’re not going to want to be surprised by when your employees come back and say: “Hey, what’s the deal?”

James Martinez is director of communications for the Detroit Regional Chamber.