40

STATE OF MICHIGAN
[January 14
The Clerk also announced that the following bills had been printed and placed upon
the files of the members, Tuesday, January 14:
House Bill No. 41
Senate Bill No. 1002
Messages from the Governor.
The following message from the Governor was received and read:
Executive Office, Lansing, January 14, 1964.
The Honorable Allison Green
Speaker of the House
Dear Speaker Green:
Transmitted to you with this letter is my Special Message to the Seventy-Second
Michigan Legislature---Second Session on Social Welfare Legislation.
Sincerely,
Ladies and Gentlemen of the Legislature:
GEORGE ROMNEY,
Governor.
My decision to submit a special message to the second session of the 72nd Legis-
lature is based on the belief that the public welfare provisions of the 1964-65 budget
require a thorough understanding and thus deserve a detailed explanation.
In my State of the State Message last week, I said that Michigan accomplished
more in 1963 in our preparation for the future than in any single year in this
century. Further, I noted that my recommendations this year are designed to meet
two basic objectives--to protect and enlarge human rights, and to serve human needs.
To accomplish these ends, we must face squarely the question of our proper
relationships with local government and with the national government as well.
While we may be philosophically uncertain as to the extension and addition of
new federal programs, we should not hesitate to make effective use of those pro-
grams already established and operating. The recommendations in this message
will encourage cooperation and partnership between our governments. Again, I
emphasize that while we are increasing our participation in established federal
programs, we should not hesitate to reject federal programs and oppose new ones
which, in our own independent judgment, appear unsound and unnecessary.
To take advantage of the 1963 preparation and to allow us to serve human needs,
the recommendations I will make concerning public welfare :
-enable us to participate in some national programs which will help solve
state and local problems in helping people;
-support state action to fulfill past legal and moral commitments in strength-
ening existing state services; and
-release some local funds, now used for welfare, to meet other needs.
Implementing the recommendations in this message will do much to solve the
critical problems of the unemployed, the elderly, the llisabled, the blind and the poor.
It is a paradox that in the midst of an affluent society and a booming state econ-
omy, the impoverished, the helpless, and the jobless are visible all around us.
The facts of the matter are these. First, that a prosperous economy does not .
guarantee prosperity to all of our citizens. Secondly, that we have legal and moral
commitments in connection with the subsistence, support, care and dignity of those
in need. But more important is hope based on concern and opportunity. Third, that :
our ability to meet these obligations means the prudent expenditure of tax dollars. ;
One thing has become clear-Michigan is paying twice for many of its welfare
programs. We contribute far more tax dollars to the national government than does
the average state. On the other hand, we receive far less than the average state in
federal grants-in-aid available for these same programs. ,
The heavy cost to Michigan citizens of this double payment is confirmed by the 1
number of persons per thousand receiving assistance in the various federal-state i
financed programs, and in the locally-state financed programs. Briefly, it shows j
that Michigan ranks 36th in the Aid to the Dependent Children program; 40th in I
the Old Age Assistance and Aid to the Blind programs; 48th in the Aid to the Dis- 1
a bled program; and number one in the nation in general assistance (direct relief), J
whicl> " a atate-and-iocaiiy-fioan"" P>=- I
1
No.3]
JOURNAL OF THE HOUSE
41
In short, the facts are The needs are there; the legal and moral responsi-
bilities are ours. CompassiOn for those who need help and concern about the cost to
Michigan taxpayers demands that we qualify under established federal programs.
Aid to Dependent Children of Unemployed Parent:;;-ADC-U
Last year this Legislature recognized the problems of the family and the local
community where there is an able-bodied but unemployed wage earner. Our efforts
were blocked by reversal of the federal approval given other states and promised
Michigan. It is recommended that the Aid to Dependent Children program be
amended to include children deprived of parental support because of unemployment.
The definition I recommend meets the test of good legislation when related to the
economic and social needs for which it is designed.
It is recommended that you revise the eligibility definition of Public Act 12 of
1963 to meet new requirements that have been established by the Department of
Health, Education and Welfare. We are informed that complete elimination of the
present definition of an unemployed parent and the adoption of a definition in-
cluding these points would meet the Department's approval:
1. The parent cannot be engaged in gainful employment for more than 32
hours in any consecutive two-week period.
2. The parent must maintain registration with the Michigan Employment Service.
3. The parent must seek and accept work.
4. The parent shall not have left his work voluntarily nor have been discharged
for misconduct.
This ADc-U recommendation is sound because:
1. It will make use of federal monies available to local and state governments.
2. It is administratively sound.
3. It provides for retraining through vocational and educational programs of
other state departments and agencies.
4. It aims at reemployment by assuring maximum use of the Michigan Employ-
ment Security Commission's help in job finding and job placement.
5. It requires the applicant or recipient to seek work, accept work, and to
continue working.
In short, such a definition would include those who should be included by
virtue of unemployment through no fault of their own, and exclude those who would
malinger, who would refuse training, who would use the program as a way of life.
I have received a telegram sent by the Department of Health, Education and
Welfare that the proposed eligibility definition "does not contain any elements
that would prevent implementation in accordance with federal requirements".
Under such a new definition of "unemployment" it is estimated that more than
5 800 families, including nearly 33,000 needy parents and children, will be trans-
from the state-locally financed direct relief caseload to the federal-state
financed ADC-U program. Because support standards are higher under the federal
program than under the direct relief program, it is estimated that each of these
families will receive an average of $22 more each month under the ADC-U program
than under the direct relief program. Although this will obviously mean an increase
in total dollars, the cost to ;'IIichigan taxpayers will be reduced because of the far
more than proportionate increase in dollars from the federal government. This is
illustrated as follows:
Cost of ADc-U
State ................................. $ 4,544,000
Local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,846,000
TOTAL ........................... $12,390,000
Cost of Direct Relief
$ 6,009,000
4,858,000
-0
$10,867,000
State assistance costs will be reduced ...................... . . . $ 1,465,000
558,000 State administrative costs will be increased by .............. .
Net State Savings ........................................ $ 907,000
Local assistance costs will be reduced . . . . . . . . . . . . . . . . . . . . . . . . . . 4,858,000
State-local tax dollars available to meet other needs ................ $ 5,765,000
I recommend early passage and immediate effect for this ADC-U legislation.
Old Age Assistance
Today, the problem of our senior citizens who need and receive care in nursing
homes is serious. Because of increasing numbers in need of care and the increasing
42
STATE OF MICHIGAN [January 14
cost of such care, it is inevitable that the problem will become more serious as
each day passes. This is a trend that has been in evidence for the past several years,
yet the maximum state participation in the cost of this care has been the same
$90.00 per month since 1956. In this interim costs ha\'e risen to an average of
$200.00 per month. As a result, in most situations the difference between $90.00
and $200.00 actual cost comes out of state-local direct relief funds. This burden on
state-local finances should be remedied.
I recommend a statutory change in the maximum grant for recipients of old age
assistance in nursing homes. The state grant should be raised from $90.00 per
month to $150.00 per month. This will save $2,026,000 in local funds at a cost of
$63,000 to state funds.
This is illustrated as follows:
OAA
$90-$150 change
Proposed Cost as OAA
State ............. $14,557,000
Local . . . . . . . . . . . 1,955,000
Federal . . . . . . . . . . 26,050,000
$42,562,000
State costs will increase by .......... .
Local assistance costs will be
Present Cost as Direct Relief
$14,494,000
3,981,000
24,087,000
$42,562,000
.$ 63,000
reduced by ............................
... 2,026,000
$1,963,000
Michigan tax dollars available to
meet other needs ....................................... .
Medical Assistance to the Aged
Michigan was the first state in the nation to establish a medical assistance for
the aged program under the 1960 Kerr-Mills Act. It provides hospital-medical care
and some other services to senior citizens. This program has been of great help
to thousands who otherwise would not have been able to cope with large hospital
and medical expenses. It has also assumed a financial burden formerly borne by
county government. But, it is also true that the program needs to be improved.
These steps should be taken to strengthen it :
1. Provisions must be made for those senior citizens who are truly medically
indigent but excluded by current income ceilings. They are excluded because the
ceilings of $1500 for single persons and $2500 for married couples are not closely
enough related to basic subsistence costs. Therefore, it is recommended that the
statutory limitations for single persons be increased from $11JOO to $1900 and for the
married couple from $2500 to $2700, at a cost to the state of approximately $1,700,000.
The effect of this would be to increase the potentially eligible group by 11,000 ad-
ditional senior citizens.
2. Provision should be made to assure that payments under the Act are equal to
payments under normal circumstances for similar services. The schedule of pay-
ments to hospitals is not governed by law. As a result, hospital rates paid under the
MAA program vary from county to county, In many counties, less than actual cost
is paid with the result that where care is provided it is at a loss to the hospital.
This loss must, of course, be reflected in the rates charged private patients. Further-
more some hospitals refuse to accept this loss and therefore will not participate in
the program. For the patient, the inequity of this is clear.
Rule 10, originally promulgated by the Social Welfare Commission, has been
abolished as of July 1, 1964. This will allow hospitals 100% reimbursement. There-
fore, an item of $500,000 to provide reimbursement at 100% of audited cost has been
included in the budget.
The favorable consideration of these two recommendations will go far toward the
goal of more adequately caring for the medical needs of the aged of Michigan.
The Aid to Disabled Program
The totally and permanently disabled represent a relatively small segment of the
total population. However, they require special consideration and specialized serv-
ices.
Michigan started this program carefully and cautiously with a restrictive defi-
nition. This approach provided time to gain experience as to direction and cost.
Although thirteen years have elapsed and some liberalizations have been made, the
basic definition remains the same. It is oriented toward the need for care, as a
3]
JOURNAL OF THE BOUSE
43
persons who are permanently and totally disabled in respect to self-
support do not qualify. There are an estimated 2,000 persons so disabled. They are,
therefore on the rolls of the local-state financed direct relief program.
This situation should be corrected. The remedy is to remove the restriction from
the appropriation Act that prevents the State Department of Social Welfare from
changing the definition. The effect will be to relieve local governments of an esti-
mated $838,000 expenditure without cost to the State of Michigan.
This illustration indicates the cost picture:
AD
Proposed Cost as AD
.................. $ 4,355,000
. . . . . . . . . . . . . . . 1,533,000
. . . . . . . . . . . . . . . . . 5,110,000
State cost will be reduced by
Local assistance costs will
$10,998,000
Present Cost as Direct Relief
$ 4,480,000
2,371,000
3,997,000
$10,848,000
... $ 125,000
decrease by ......................................... . 838,000
Michigan tax dollars available
to meet other needs . . . . . . . . . . $ 963,000
The Aid to the Blind Program
Those who will recehe aid under this program have lost their nswn, but with
the help of the program and their own courage they can satisfy their basic needs
and also contribute substantially to their community. Attention is directed toward:
1. Michigan's program for providing employment in stands operated by the
blind is behind comparable programs in other states. Efforts at all levels of gov-
ernment must be mobilized to achieve progress in this area.
2. Rehabilitation can be made more attracti\e and more meaningful if we move
ahead with Michigan's program for teaching work skills, mobility training. and
exploration of employment markets. A budget increase is recommenrled to bring this
program up to acceptable standards. This is a first step in improving the program
and should result in the rehabilitation of additional blind people.
Change in Formula for Direct Relief Matching
This message refers to the savings of local money that will r e ~ m l t from the
recommended changes in the federal-state financed programs. This is because three
of the program changes described-ADC-U, AD and OAA-will reduce relief
expenditures in the county. It should be remembered that by existing law the state
is required to provide not less than 30% of direct relief costs to the counties. The
law now provides that the Social Welfare Commission may grant additional monies
if there is a financial need.
The Social Welfare Commission has adopted a formula based on the state
equalized valuation which requires the county share to be from 1f2 to 1% mills
before any additional state aid can be granted over the legal requirements. If
a county spencls more than the formula established for it, the state provides
full direct relief costs beyond that point. This formula results in a current annual
average state participation of 67% in the City of Detroit's direct relief costs.
In outstate counties, the state's average partic-ipation is approximately 32%.
Three of the program changes deseribed above- ADC-U, AD, and OAA- result
in lower direct relief expenditures in the eounties. In the ease of Detroit, any
direct relief expenditure reduction will not benefit the city because direct relief
expenditures in Detroit will still exceed the established formula (1% mills) by
approximately $9.4 million. ThE>refore, in order to make it possible for Detroit
to benefit from thE' program changes outlined above it is recommended that direct
relief funds be provided so that the formula maximum can be reduced from 1%
mills to 1 mill throughout the statE'. This rednetion will increase the state
Participation. However, the inerease in state participation will be more than
offset by state savings in Detroit because of ADC-U and the program changes in
OAA and AD. This millage requirement rednetion will not affeet outstate counties
beeause with the recommended program adjustments, direct relief expenditures
will only exceed 1 mill in the City of Detroit.
Local welfare Program Administration
Over the years, needy people living under similar circumstances have received
44 STATE OF MICHIGAN [January 14
unequal treatment. There has also been duplication and wasted effort under the
present system of administration.
In many counties, the department of Social Walfare and the Bureau of Social
Aid are housed in different buildings. SometimE's they are located in different
cities within the county. It is not unusual for an employee of the Burt:>an to drive
to the outlying regions of a county to visit a family on ADC, and at the same time
an employee of the county department to follow the samE> route to invt>Stigate
eligibility for direct relief. This unnecessary duplication of effort is also found
in other welfare programs.
The special legislative committee on Social Welfare reorganization, headed by
Rep. Thomas Sharpe has studied the problem and will make reC'Ommendations to
this 1964 legislative session. I urge your serious consideration of a plan which
will provide a unified welfare administration in the intert>sts of more efficient
service.
CONCLUSION
Adoption of these recommended program changes will result in added assistance
and greater employment opportunity for some of our most needy families. There
will also be an immediate savings to local units of government without increasing
state expenditures for public welfare purposes.
The dollar effects of the six recommended program improvements may be sum-
marized as follows :
Cost of Present Programs
State ................. $24,983,000
Local 11,210,000
Federal . . . . . . . . . . . . . . . 28,084,000
Cost of Proposed Programs
$24,983,000
4,604,000
41,649,000
Difference
-0-
(6,606,000i.
13,565,000
$64,277,000 $71,236,000 $ 6,959,000
includes $2.6 million Detroit savings and $1.5 million Wayne County ~ a v i n g s
This table shows Federal contributions will be increased by $13,565,000, local
units will save $6,606,000, and there will be no additional state cost.
Of the savings to local units, Detroit's welfare costs will be reduced by $2.6
million and Wayne County by $1.5 million.
These program changes are designed to help people by strengthening existing
programs and the services they offer.
The message was referred to the Clerk and ordered printed in the Journal.
Introduction of Bills.
Reps. Conlin, Good and Anderson Introduced
House Bill No. 42, entitled
A bill to amend section 2 of Act No. 48 of the Public Acts of 1895, entitled "An act
to incorporate the grand chapter of Royal Arch Masons of :Michigan," being section
457.242 of the Compiled Laws of 1948.
The bill was read a first and second time by its title, ordered printed and referred
to the Committee on Private Corporations.
Reps. Conlin, Knabusch and Rasmussen introduced
House Bill No. 43, entitled
A bill to amend Act No. 230 of the Public Acts of 1925, entitled as amended "An
act to provide for the better protection and preservation of fish, game and fur-bearing
animals and game birds, protected by the laws of this state; to provide a method by
which the taking or killing thereof may be regulated and the open season for the
taking or killing thereof suspended or abridged in any designated waters or area of
this state; to provide for special fisheries research and regulations therefor; to pro-
vide a penalty for the violation thereof, and to repeal Act No. 9 of the Public Acts of
1917, as amended by Act No. 156 of the Public Acts of 1921," as amended, being
sections 300.1 to 300.5 of the Compiled Laws of 1948, by adding a new section 1a.
The bill was read a first and second time by its title, ordered printed and referred
to the Committee on Conservation.
Reps. Snyder, West, Mrs. McCollough and Robert D. Mahoney introduced
House Bill No. 44, entitled
A bill to amend Act No. 328 of the Public Acts of 1931, entitled "The Michigan
penal code," as amended, being sections 750.1 to 750.568 of the Compiled Laws of
1948, by adding a new section 477h.