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Don’t turn the MCCA into a political ‘slush fund’

House Bill 4560 would convert MCCA’s private funds into ‘state money’ that politicians could ‘appropriate’ (i.e., take away) from the seriously injured

political slush fund

Let’s not allow the Michigan Catastrophic Claims Association (MCCA) to be turned into a political “slush fund!”

The MCCA was created for the very specific and important purpose of paying for the No Fault medical benefits of catastrophically injured auto accident victims.

To raise the funds needed to accomplish its mission, the MCCA charges annual assessments to Michigan drivers. The MCCA is a vital lifeline for those who depend on it, whether for necessary attendant care, catastrophic personal injuries such as TBI, or very serious neck and back injuries. It’s often the difference between being “warehoused” in a Medicaid facility that offers poor medical care and receiving vital medical treatment.

But the nature of the MCCA and, most importantly, its ability to do what it was created to do is now at risk by the proposals in the new House Bill 4560:

Specifically, if HB 4560 were passed and signed into law, it would turn the MCCA into a political “slush fund” by converting the private “money received and held” by the MCCA into “state money,” which politicians could “appropriate” for whatever purpose they chose – both now and indefinitely into the future.

In this case, “appropriate” means take with no intention of paying back.

Yes, HB 4560 is the legislation I’ve railed against on many occasions because of the recklessness and absurdity of its proposal to take $1 billion out of the MCCA – and away from catastrophically injured auto accident victims – to pay for Michigan road repairs. To learn more about why this is such a horrible idea, please check out my blog posts:

Recently, the House Fiscal Agency released its July 30, 2015, “Legislative Analysis” of HB 4560.  I must say that, after having read the House Fiscal Agency’s analysis, my assessment of HB 4560 has changed considerably.

HB 4560, the “MCCA bill” is even worse than I  initially thought

Aside from taking $1 billion away from the MCCA now (during the current fiscal year), HB 4560’s proposal to convert the MCCA’s private funds into “state money” sets the MCCA up to have its funds taken away indefinitely into the future.

Unlike HB 4560’s proposed $1 billion raid on the MCCA, which would occur only in fiscal year 2014-15, the conversion of the MCCA’s private funds to “state money” would be permanent.

That means that, if next year (or the year after that or the year after that … and so on indefinitely) politicians need money for a project, but they can’t come up with a politically popular way of funding the project, then they can just stop by the ATM that HB 4560 has shamefully installed at the MCCA.

Making ‘state money’ out of the MCCA’s private funds

The reason politicians can’t take $1 billion from the MCCA right now to pay for roads (and, thus, the reason HB 4560 was introduced) is because under Michigan law, the money received and held by the MCCA is “not state money.” (See MCL 500.134(3) and (6)(c))

By virtue of its “not state money” status, politicians must keep their greedy little paws off of the MCCA’s funds.

Under Michigan’s Constitution, Article IV, Section 30, politicians can appropriate only “public money … for local or private purposes.”

Again, “appropriate” is just a fancy, innocuous-sounding word for “take and never give back.” Albeit in slightly more dressed-up, but toned-down, language, the Michigan Legislature’s “Glossary of Legislative Terms” provides essentially the same definition:

“Appropriations: The authorization to spend state and federal funds. Probably the most important function of the Legislature, appropriating money is carried out by passing bills which authorize units (departments, agencies, and institutions) of government to spend money for specified purposes.”

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Blog Author Steven M. Gursten
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