LANSING – The fiscal impact of five out of the six November ballot proposals could not be determined by the Senate Fiscal Agency, but it was able to calculate some unfavorable numbers for the proposal to require a statewide vote for the construction of any new international bridge or tunnel for motor vehicles.
The agency’s report released on Friday found “a significant cost to the state and/or local governments associated with the expense of holding an election to allow the state of Michigan to spend state funds or resources to build any new international bridge or tunnel for motor vehicles,” by adopting Proposal 12-6.
“According to the Michigan Department of State, the cost of any election is an estimated $2,000 per voting precinct. There are approximately 5,200 voting precincts across Michigan,” the analysis said. “If voter approval were sought in conjunction with an already scheduled “general election” in November of an even-numbered year, there would be no additional costs. However, if voter approval were sought in a special election, those costs would be an estimated $2,000 per voting precinct, or an estimated $10.4 million total.”
The agency also said that the interpretation of the term “new international bridges or tunnels” leaves the potential that funding for the construction of new bridges elsewhere in the state could be in jeopardy, which would include $80.2 million based on the fiscal year 2012-13 Department of Transportation budget.
In reviewing Proposal 12-1, a referendum on the state’s emergency financial manager law, the agency did not determine a projected fiscal impact but rather two likely scenarios if the proposal is defeated and PA 4 of 2011 (HB 4214 ) is rejected. The first, as has been reported, is that PA 72 of 1990 would be permanently revived, but that could still be overturned by the courts. The Legislature could also amend, repeal, or replace PA 72.
As for Proposal 12-2, a constitutional amendment to enshrine collective bargaining rights in the Constitution, the agency said, “(I)t would have an indeterminate impact on State and local units of government.” The actual fiscal impact would depend on the extent to which existing laws were found to violate collective bargaining rights, and the effect of the proposed amendment on the terms of future negotiated contracts, it said.
“One reason the scope and impact of Proposal 12-2 cannot be determined is that it does not define “terms and conditions of employment”, and how that phrase would be interpreted cannot be predicted,” the agency said.
It did, however, include examples of seven other states with some mention of collective bargaining rights in their constitutions. Those states include Hawaii, New Jersey, New York, Missouri and Oregon.
The agency only included “discussion” in its analysis of Proposal 12-3, a constitutional amendment that would increase the state’s renewable energy standard to 25 percent by 2025.
“According to some people, instituting a renewable energy standard of 25 percent by 2025 would have several environmental and economic benefits for Michigan,” the analysis said, continuing on to draw from arguments made from proponents and opponents about the measure.
However, the analysis did acknowledge that presently only 3.6 percent of the electricity produced in the state comes from renewables (a figure from the Public Service Commission) and that the primary source of electric generation is coal, “which must be imported from other states at a cost of about $1.7 billion per year.”
Senate Fiscal looked at the present situation with the unionization of home help care workers – the primary issue behind Proposal 12-4. For instance, it references the preliminary injunction granted by the U.S. District Court for the Eastern District of Michigan that essentially allows for home care workers to be unionized and collect union dues.
Similar to the renewable energy proposal, the analysis spells out arguments from both sides but does not exactly give direction one way or another on the question.
“If Proposal 12-4 is approved, the existence of the Council will be established in the Constitution, its role will be spelled out, and the providers’ right to bargain collectively will be protected,” it said. “The legislative appropriations process, however, will continue to determine the level of State funding for the Council and, as the amendment states, the providers’ compensation will be subject to appropriations by the Legislature.”
Senate Fiscal determined that passage of Proposal 12-5, which would require a two-thirds vote by the Legislature or a statewide vote to increase taxes, “almost certainly would generate litigation, as the State and taxpayers sought clarity on applying the proposal’s language,” it said. But the fiscal impact on tax revenue and tax policy would depend on the votes that would be made on future legislation, the agency concluded, making it “impossible to offer a prospective fiscal impact.”
There is a secondary fiscal impact related to borrowing costs, the agency said. “Rating agencies have indicated, both in ratings announcements regarding state debt and in their published ratings methodology, that the greater the constraints on generating revenue, particularly tax revenue, the lower the rating on the state’s debt,” it said.
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