State Senate OKs Medicaid tax plan, flurry of other bills

The state Capitol in Lansing, Mich.
The state Capitol in Lansing, Mich.

LANSING, Mich. (AP) — The Michigan Senate set the stage for a showdown with Gov. Rick Snyder over a proposed overhaul of Medicaid financing and approved a slew of other bills Thursday, the final day of voting before the postelection “lame duck” period.

Some legislation, including tax-related bills and a measure targeting laser pointers at Detroit’s airport, was sent to the Republican governor. Many other bills — including some related to Flint’s water crisis — will next be considered in the House, which will not return to session until Nov. 9 because most members are running for re-election.

Legislation not enacted this year will die and have to be reintroduced in the next two-year session that begins in January.

Another step came Thursday in the state’s long-running dispute with the U.S. government over taxes that help pay for Medicaid, the joint federal-state program that provides health insurance for low-income residents. Senators voted overwhelmingly to continue a 6 percent “use” tax on Medicaid managed care organizations, more quickly end a broader health insurance tax that the business lobby dislikes and change the pot of state money that is used to draw federal matching dollars.

The bills address federal concerns that Michigan’s Medicaid taxation is too narrowly tailored, according to Sen. Ken Horn, a Frankenmuth Republican and sponsor of legislation that would eliminate the health insurance tax in January unless the federal government rejects the plan.

“I don’t see why they would object to this in the first place. If they do, they’re going to have to explain to us why the income tax — the broadest tax that any state could collect — is not appropriate for paying matching funds,” Horn said. “We’re confident in our policy.”

He said he had received “mixed signals” on whether Snyder would sign the legislation, however.

The nonpartisan Senate Fiscal Agency estimates that if the plan were blocked at the federal level, the state would bring in $256 million less in the 2018-19 fiscal year.

State budget director John Roberts “is concerned about long-term balance and he wants to avoid creating unnecessary risks and pressures on future budgets,” spokeswoman Kurt Weiss said.

Also Thursday, the Republican-led Senate sent Snyder bills that would:

— Let schools use their “sinking fund” property tax to finance security and technology upgrades. The special taxes are being assessed by nearly a third of school districts and can fund major repairs and renovations to school buildings.

— Authorize police at the Detroit Metro and Willow Run airports to arrest people outside airport boundaries who point lasers at planes or operate drones in protected airspace. The lasers can temporarily blind pilots or blur their vision, and the Federal Aviation Administration says there were nearly 50 such incidents in Michigan in 2014.

Legislation sent to the GOP-controlled House for further consideration would:

— Require drivers to stay at least 5 feet from a bicyclist when passing. The bills were introduced after a man in a pickup truck who was allegedly under the influence of drugs plowed into a group of cyclists near Kalamazoo in June, killing five. The legislation would also mandate that driver education classes include at least three hours of instruction on bicycle and motorcycle awareness and laws. The League of Michigan Bicyclists says Michigan is among just seven states without a law requiring motorists to safely pass cyclists.

— Make high school graduates in Flint eligible for a state college scholarship program backed by private funding. It is limited to 10 high-poverty “promise zones” currently.

— Allow Flint to form an authority that could assess a local property tax to fund recovery and economic development efforts. The tax could not be implemented without support from local voters.

— Prohibit hacking into and disrupting motor vehicles’ electronic systems without authorization and subject hackers to life imprisonment if a death results.