| Primary Election August 6, 2002 |
Proposal 02-1
Compensation of Certain Elected Officials
Proposal 02-2
Investing State Funds for Natural Resources
and Parks
On August 6, 2002, Michigan citizens will have the opportunity to vote on two statewide ballot questions. Each issue will ask for a YES or NO response, and each will be decided by a majority of those voting on the specific question. Voters are making these choices because Michigan's constitution gives citizens a direct role, through popular vote, in amending the constitution. Both issues were placed on the ballot by the legislature.
For a MSWord print copy of this document click here: Ballot
| Proposal 02-1
Official ballot language A PROPOSAL TO AMEND THE PROVISION OF THE STATE CONSTITUTION GOVERNING THE OPERATION OF THE STATE OFFICERS COMPENSATION COMMISSION (SOCC) The proposed constitutional
amendment would:
Should this proposal be adopted? YES______
NO______
|
Compensation of
Certain Elected Officials Proposal 02-1 deals with how salaries are determined for certain public officials. This ballot issue would amend Article IV, Section 12, of the state constitution, requiring that the legislature vote to approve or disapprove or change the salary and expense recommendations from the State Officers Compensation Commission (SOCC). The basic question with this ballot issue is whether it is preferable to require the legislature to vote on the SOCC salary and expense determinations (a yes vote) or to leave the process as it is now, with the legislative vote being optional (a no vote). Background Controversy over the salary
recommendations from the State Officers Compensation Commission in December
2000 led to the legislative decision to place this issue on the ballot
for the 2002 primary election. A two-thirds vote of each house of the legislature
is needed to place a proposed constitutional amendment on the ballot. House
Joint Resolution E was approved by the House (104-0) and the Senate (33-0)
in December 2001.
|
| The State Officers Compensation
Commission was established in1968 when Michigan voters approved the addition
of Section 12, Article IV, to the constitution. Prior to that amendment,
the legislature had been required to set salaries and expense levels by
passing a law, subject approval or a veto from the governor. The 1968 amendment
specifies that the SOCC will establish the salaries and expenses for the
governor, the lieutenant governor, members of the legislature and the justices
of the state Supreme Court. The commission’s recommendations will take
effect unless the legislature decides, by a two-thirds vote in each house,
to reject the proposal.
The 1968 amendment provides
for a seven-member commission, appointed by the governor. Implementing
legislation specifies that:
The commission has developed
a set of criteria to help with its decision making (Legislative Service
Bureau Report, January 2001). Members take into account the level of inflationary
adjustment, salary comparisons with similar positions in other states and
positions with similar responsibility in the private sector, cost-of-living
data and the state’s current financial
|
outlook. The commission
also considers the public comments from correspondence and public hearings.
The SOCC recommendations have been controversial at times during the past 34 years. In 1991, the legislature voted to reject the proposal in the midst of a downturn in the state’s economy. In 2000, the SOCC members believed that the salary levels were inadequate compared to positions with similar responsibilities. They also felt that the salaries did not reflect economic growth through the years. The recommended salary increases for 2001 included 13.7 percent for the governor ($175,000) and 35.8 percent for legislators ($77,400). The commission recommended a 2.9% increase for all positions in 2002. After considerable public discussion, the SOCC determination was rejected by the House. The Senate did not vote on this proposal, so the commission’s recommendations went into effect, retroactive to January 1, 2001. Twenty-one states have a compensation commission to help determine legislative salaries, according to the Legislative Service Bureau Report. In some states, the commission’s role is advisory, and the legislature makes the determination. The commission has complete control over setting compensation levels in five states, and in five other states, the commission operates the way it does in Michigan. The Proposal If Proposal 02-1 is approved by voters, the legislature will be required to vote on all future salary and expense determinations that are made by the State Officers Compensation Commission. This proposal would amend the state constitution in these ways:
|
| Currently, the legislature
is not required to take a vote, and if they do, a two-thirds vote is needed
to reject the recommendations. The House and Senate would alternate
introducing the concurrent resolution for debating the proposal.
Policy Discussion Establishing the salary and
expense levels for public officials is a complex and often controversial
undertaking. The responsibilities and public expectations for these positions
are different from other occupations, and the length of employment is limited
for some positions. Since the State Officers Compensation Commission was
established in 1968, criticism has periodically surfaced over the fact
that the legislature is not required to vote on the salary and expense
determinations. This means that the recommendations take effect automatically
unless the legislature decides to vote. The timing of the SOCC recommendations
means that, if a vote is scheduled, newly elected legislators are voting
on their compensation levels in their first month in office. There has
also been criticism because the legislature cannot make any changes in
the recommended salary and expense levels. In addition, critics have questioned
the lack of any definition of qualifications for SOCC members.
|
The argument in favor of
this proposal is that requiring the vote makes the legislature take responsibility
for accepting or rejecting the recommended compensation levels. This appears
to provide more opportunity for legislators to respond to public sentiment
concerning the recommendations. The ability to reduce the recommendations
is also seen as an argument for this proposal.
Concerns have been raised about whether requiring the legislative vote means that the same factors that influence the public perception of legislative pay levels apply to the other public officials. Some have questioned whether it would be better to do away with the State Officers Compensation Commission and make the legislature totally responsible for the decisions on salaries and expenses. Others argue that perhaps there should be an independent commission, with the legislature having no role. Sources: -- Citizens Research Council of Michigan,
State
Ballot Issues on the August Primary Ballot, June 2002
Proposal 02-2 Official Ballot Language A PROPOSAL TO ALLOW CERTAIN PERMANENT AND ENDOWMENT FUNDS TO BE INVESTED AS PROVIDED BY LAW AND INCREASE ALLOWED SPENDING FOR STATE PARKS, LOCAL PARKS AND OUTDOOR RECREATION The proposed constitutional
amendment would:
|
Should this proposal be adopted? YES______ NO______
Investing State Trust Funds for Natural Resources and Parks Proposal 02-2 would make it possible to invest monies in the Natural Resources Trust Fund and the State Parks Endowment Fund in the stock market to increase the resources available to purchase more state lands and improve state parks. This ballot issue would amend several sections of Article IX of the state constitution. Both houses of the legislature approved Senate Joint Resolution T, thus placing the issue on the ballot. Legislation that would help implement this proposal has also been approved by the legislature (Senate Bills 796, 798-801). Background In 1984, voters approved
a ballot proposal to place Section 35, Article IX, in the state constitution,
creating the Michigan Natural Resources Trust Fund. This fund had been
established by the legislature in 1976 (Kammer Trust Fund), but the revenues
had been used for a variety of other purposes during tight economic times.
Proponents of Proposal B in
|
1984 felt that that a constitutional
guarantee was necessary to ensure the use of these funds for acquiring
and maintaining public lands.
The Michigan Natural Resources Fund receives revenues from mining operations on state-owned lands as well as revenues from specified oil and gas drilling leases. Implementing legislation (P.A. 101, 1985) specified that in each fiscal year one-third of the revenues from mineral leases, plus interest and earnings from the trust fund can be spent to acquire land for recreational purposes, environmental protection or scenic value. At least 25 percent of the monies available to be spent each fiscal year must be used to acquire land and no more than 25 percent can be used for recreational purposes. Grants are provided to local governments and public authorities, requiring a local match of at least 25 percent. Trust fund monies are also used to make the annual payment in-lieu of taxes to local units of government. In 1994, voters approved a ballot proposal to place Section 36(1), Article IX, in the state constitution, creating a long-term funding mechanism for the operation of state parks. This proposal ended the diversion of monies from the Natural Resource Fund for economic development purposes. It specified that those dollars would instead be directed to the parks endowment. The constitutional amendment established an $800 million cap on the endowment fund, estimated to take at least 40 years. The State Parks Endowment Fund annually provides monies to extend programming in parks, improve security, and increase maintenance and repairs. The Proposal Proposal 02-2 would allow
the state potentially to raise more money that could be used for environmental
and recreational purposes. It would also change current limitations on
the Natural Resources Trust Fund and the State Parks Endowment Fund.
|
| Investing State Monies—
The constitution now prohibits the state from holding stock in any corporation, company or association. Retirement funds for state employees and public officials, and also educational and charitable endowments, are exempted from this prohibition. Proposal 02-2 would amend Sections 19, 35, 36 and 37 of Article IX, removing the prohibitions on investing state funds in stocks for state permanent and endowment funds. Legislation has been passed that will take effect if Proposal 02-2 is approved by voters. It would specifically make it possible for the state treasurer to invest in the stock market monies from these six funds: Natural Resources Trust Fund, State Parks Endowment Fund, Veterans Trust Fund, Nongame Fish and Wildlife Fund, Game and Fish Protection Fund and the Michigan Civilian Conservations Corps. The Michigan Natural Resources Trust Fund— This proposal would amend Section 35 of Article IX to increase the cap on assets from $400 million to $500 million. When the trust fund reaches the cap, all of the revenues will be placed in the parks endowment. Proposal 02-2 also provides that one-third of the revenues could be appropriated annually until the fund contains $500 million in assets. The constitution currently specifies that when the trust fund principal reaches $200 million, only interest can be spent. The principal balance for the Michigan Natural Resources Trust Fund was $182 million at the end of fiscal year 2001. According to figures from the Michigan Department of Natural Resources, 80 percent of the funds available to be spent in 2001 were used to acquire land (10 grants for $30 million) and pay administrative costs. Twenty percent of the available funds provided 31 recreation development grants, totaling $7.4 million. The State Parks Endowment Fund— This proposed amendment would allow monies in the endowment to be spent for acquiring |
state park land as well
as continuing to pay for maintenance, operations and capital improvements.
Under present constitutional requirements, the State Parks Endowment Fund
annually receives $10 million from the Michigan Natural Resources Trust
Fund. It is allowed to appropriate $5.0 million each year, adjusted annually
for inflation ($7 million in 2001). Proposal 02-2 would amend Section 36
(renumbered as Section 35a) to specify that the parks fund can appropriate
interest and earnings plus 50 percent of the annual revenues from the Natural
Resources Trust Fund.
Policy Discussion Supporters of placing Proposal 02-2 on the ballot this year feel that it is important to spend more money to improve state parks and to purchase state lands. Giving the state treasurer the ability to invest the assets of the trust funds in the stock market is seen as a way to more quickly increase the monies in these funds. The House Fiscal Agency (11-2-01) estimates that if the funds are invested in a manner similar to the retirement funds, they would earn about 6.5 percent more each year. The proposal also increases the maximum amount that can be withdrawn and spent. A coalition of business and environmental groups announced support for this proposal. At this writing, no organized
groups have been identified in opposition to the proposal. However, concerns
have been raised about the wisdom of investing the assets from these funds
in the stock market. There are questions about the volatility and uncertainty
of the market, including possibilities for fraud and corruption. Some people
are against the acquisition of any additional state land, arguing that
more land should be in private rather than public ownership. Questions
are also raised about the idea of spending more each year from the parks
endowment, thus slowing the accumulation of principal.
|
| Sources:
-- Citizens Research Council
of Michigan, State Ballot
|
-- 1994 Statewide Ballot
Proposals, MSU Extension,
Elizabeth Moore -- Senate Fiscal Agency Analysis of SJR T, 11-1-01 This bulletin was prepared by: Elizabeth Moore
|
Bringing Knowledge to Life!
![]() |
MSU is an Affirmative Action/Equal Opportunity institution. Extension programs and materials are open to all without regard to race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, marital status, or family status. n Issued in furtherance of Extension work in agriculture and home economics, acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of Agriculture. Margeret Bethel, Extension Director, Michigan State University, East Lansing, MI 48824. n This information is for educational purposes only. Reference to commercial products or trade names does not imply endorsement by MSU Extension or bias against those not mentioned. This bulletin becomes public property upon publication and may be printed verbatim with credit to MSU. Reprinting cannot be used to endorse or advertise a commercial product or company. |