Strengthen|ng M|ch|gan Government Inst|tut|ons ro[ect

January 18, 2014

Contents:
Backgiounu............................................................................................................................................. 1
The Challenge: Eiosion of Effective uoveinment Functioning At the Top ............. 1
Weaknesses In the Legislative Bianch................................................................................... 2
Impact 0n the uoveinoi anu the Executive Bianch ......................................................... 2
Naking uoveinment Woik .......................................................................................................... S
Stiengthening Nichigan uoveinment Institutions Pioject................................................. 4
0bjectives of Pioject....................................................................................................................... 4
0peiating Piinciples....................................................................................................................... 4
Bigh Piioiity Tasks .............................................................................................................................. S
1. Restoiing Legislative 0veisight in Nichigan .................................................................. S
2. Legislative Biafting Noueinization. ................................................................................... 6
S. Paiticipation In Nulti-State 0iganizations...................................................................... 6
4. Beveloping a stiong piofessional, full-time policy staff to seive the
legislatois. ........................................................................................................................................... 6
S. Legislative Leaueiship anu Tiaining Acauemy.............................................................. 7
Why Not }ust Eliminate Teim Limits. ......................................................................................... 8
Auministiation....................................................................................................................................... 8
Stiuctuie anu Auministiation of the Pioject ....................................................................... 8
The Role of Piivate Resouices In Top Level uoveinment Nanagement ................. 9
Tax Rulings Affecting the Piogiam........................................................................................1u

8ackground
1he Cha||enge: Lros|on of Lffect|ve Government Iunct|on|ng At the 1op
The State of Michigan, as an economy and a society, has been on a downward spiral
relative to much of the World. While the state is beginning a recovery, many of the
institutions of state government have suffered.
The economic crisis and the related decline in state revenues led to significant
underfunding and dismantling important management and oversight functions within
state government.
Stiengthening Nichigan uoveinment Institutions Pioject
Page 2 of 10

Weaknesses In the Leg|s|at|ve 8ranch
Michigans legislative branch faces particular challenges because of the mandatory
inexperience requirements of the Constitutionally imposed term limits. At a time when
newly arrived legislators urgently need competent staff assistance, the nonpartisan,
technical staffs of the legislature have been substantially reduced.
The problems can be summarized as follows:
Michigan as an economy and society has been in trouble for many years.
Term limits imposed a mandatory inexperience standard of lawmakers.
Much of the States institutional memory has been lost.
Budget challenges have weakened resources to manage a $42 Billion structure.
Pay to play threatens the integrity of the legislative process.
The quality of laws has declined and serious issues are ignored.
Substantive policy advice is often replaced by partisan schemes.
Legislative involvement in state litigation is nearly nonexistent.
Legislative access to government information is limited.
The Legislative Council and Legislative Service Bureau (LSB) need
strengthening and additional resources.
Michigan is not a leader or even a player in multi-state legislative groups.
No oversight The Legislatures constitutional oversight role has been largely
abandoned.
The quality of laws has declined and serious issues are ignored.

Assuming term limits are not going to change in the near term, the focus of this Project
should be on making government work not specific policy/ideological issues. The goal
should be: Whoever controls the Legislature should be able to govern effectively.
The Legislative Branch is the political branch that has been most negatively affected by
term limits. Some of the underlying causes have been identified as including:
Michigans lifetime term limits on elected officials.
Loss of institutional memory regarding effective law making processes.
Reductions in state work force eliminating many senior, experienced public
servants.
A declining state economy causing chronic budget challenges.
Lack of transparency; Michigan is behind the curve in requiring transparency and
public access to the operations of state government.
A shift of legislative personnel resources to primarily partisan staff with limited
experienced policy staff assisting many inexperienced legislators.
Reduction in nonpartisan legal drafting professionals in the Legislative Service
Bureau (LSB), at a time when inexperienced legislators need greater assistance.
Impact Cn the Governor and the Lxecut|ve 8ranch
The impact of these challenges is not limited to the legislative branch. In order to exercise
leadership of the complex apparatus of the executive branch, the Governor, his or her key
staff, and cabinet members require access to such things as skilled legislative drafting
assistance. When the Governor has neither sufficient internal staffing resources nor
Stiengthening Nichigan uoveinment Institutions Pioject
Page 3 of 10

access to legislative branch technicians, the quality of government policy making is
degraded.
An example of this impact was the necessity to secure private sector support for drafting
legislation to reflect the recommendations of the Governors Environmental Advisory
Rules Committee (ARC). The ARC Report included 77 recommendations covered all
four regulatory programs within the Department of Environmental Quality: air, water,
remediation, and resource management. Of those recommendations, 24 involved
amendments to statutes. To accomplish this, the Governors request for private support
included the following:
The Office of the Governor, after consultation with the
Department of Environmental Quality and the Office of
Regulatory Invention, has determined that it would be
helpful to obtain assistance in drafting these statutory
amendmentsThe state typically uses appropriated State
of Michigan funds and other State of Michigan resources to
coordinate formulating and drafting legislation.
Thereforeengaging legal counsel to create initial drafts of
the legislative amendmentswould defray some of the
State of Michigans specific expenses related to drafting
legislation thereby lessening the State of Michigans
burden.
In a December 26, 2013 letter to the Cornerstone Foundation, Bill Rustem, Gov. Snyders
Director of Strategy, said, in part:

The effort to assist the operations of the Executive Branch
of state government is an important undertaking and is
consistent with the Governors focus on reinventing
government. The goal is to enhance the Michigan
Legislative Branch and its agencies as the most
professional, effective and responsive law making among
the 50 states. Our goal is to help lawmakers and Executive
Branch officials involved in policymaking do their jobs
more effectively. This assistance will be on a nonpartisan
basis and will be focused on providing policy makers with
existing tools and resources necessary to provide policy
leadership and effective management. Assistance would be
largely technical and professional and would be under
policy guidance of elected officials in both the Legislative
and Executive Branches.
Mak|ng Government Work
The challenges are not partisan or ideological. Whether the voters select a government
that is progressive or conservative, there is need for government that works.
Regardless of ideology, an effective, modern government includes:
Stiengthening Nichigan uoveinment Institutions Pioject
Page 4 of 10

Competent public officials and public servants
Transparency and public support for government processes.
A culture of integrity throughout government.
A competitive and often adversarial, but not toxic, political system.
Both partisan and nonpartisan policy staffs that understand complex policy issues
and bring useful ideas to elected officials.
Sufficient competent and experienced staff to manage a multi-billion dollar
enterprise.
Fiscal integrity and honesty in budgeting.
Under Michigans Constitution, a bicameral legislative branch that is an effective
co-equal to a Governor and executive branch.
A legislative branch capable of performing its constitutional oversight function.

Strengthen|ng M|ch|gan Government Inst|tut|ons ro[ect
Cb[ect|ves of ro[ect
The Strengthening Michigans Governing Institutions Project is an effort designed to
finance, organize and deliver the following:
Focused research on strengthening the legislative function in a term-limited
environment.
Development of specific tools and action steps for the Michigan Legislature to
take to strengthen its law making, oversight and budgeting functions.
Conferences and meetings for legislators, staff and others involved in the
legislative process to implement new tools.
Involvement of Michigan legislators in national meetings of state legislators
focused on the governing institutions.
Development and proposal of strategies to enhance legislative oversight and
transparency in government, including both public access to information and
inter-branch access.
Creation of efforts to provide a more collegial, inter-personal relationship
between members to foster problem solving and less negative partisanship.
Cperat|ng r|nc|p|es
The Project is based on the belief that there is a need for a long term, structured effort to
provide private sector assistance to state government leaders.
This assistance must be on a nonpartisan basis and must be focused on providing policy
makers with additional tools and resources necessary to provide policy leadership and
effective management at the top level of state government. The assistance would be
largely technical and professional and would be under the direct control and policy
guidance of elected official in both the legislative and executive branches.
The Executive Summary of the Project included the following:
The Strengthening Michigans Governing Institutions Project is an effort designed to
finance, organize and deliver the following:
Stiengthening Nichigan uoveinment Institutions Pioject
Page 5 of 10

Quality research on strengthening legislative branch functions in a term- limited
environment.
Develop specific tools and action steps for the Michigan Legislature to take to
strengthen its law making, oversight and budgeting functions.
Conferences and meetings for legislators, staff and others involved in the
legislative process to implement new tools.
Involvement of Michigan legislators in national meetings of state legislators
focused on the governing institutions.
Development and proposal of strategies to enhance legislative oversight and
transparency in government, including both public access to information and
inter-branch access.
Creation of efforts to provide a more collegial, inter-personal relationship
between members to foster problem solving and less negative partisanship.
Identify technology tools to assist the legislative branch in carrying out its duties.

The Project is based on the belief that there is a need for a long-term, structured effort to
provide private sector assistance to state government leaders.
n|gh r|or|ty 1asks
1. kestor|ng Leg|s|at|ve Cvers|ght |n M|ch|gan
Term limits, retirement of senior staff and unwillingness of some executive agencies to
cooperate has essentially eliminated the ability of the Michigan Legislature to carry out
its constitutional oversight functions.
The Legislative Oversight Project will work with legislative leaders and relevant
committees to undertake the following:
Review and propose improvements in statutes and legislative rules establishing
legislative oversight powers.
Consult with the National Conference of State Legislators (NSL), the Council
of State Government (CSG) and other organization on best practices in
legislative oversight.
Propose, if necessary, new laws to protect individual privacy and confidential
information during the course of legislative oversight hearings.
Inter-branch access to information. Disputes over legislative access to executive
branch information were a major element in legislative efforts to respond to
executive branch failures in child welfare. The Legislature has insufficient rules
and systems to acquire and preserve the confidentiality of information received as
part of its oversight function. By establishing new rules and procedures for access
to inter-branch information, the Legislature will be better prepared to act as a co-
equal branch of government. The Project will help develop protocols, in
cooperation with the Governor and the Attorney General, to provide for efficient
and effective inter-branch access to otherwise confidential information.
Stiengthening Nichigan uoveinment Institutions Pioject
Page 6 of 10

2. Leg|s|at|ve Draft|ng Modern|zat|on.
The legislative drafting function in Michigan is the statutory responsibility of the LS, an
agency of the Legislative Council.
With the downsizing of the professional staff in the legislative branch, the LSB is
frequently unable to timely provide the quality legal drafting services to legislators, state
departments and the Governors Office that are needed to make the changes needed to
reinvent government. In addition, term limited legislators frequently do not know how
to access or effectively use the skilled attorney drafters that remain in the LSB.
The Legislative Drafting Modernization Project will develop, for consideration by the
Legislative Council, proposals to modernize and improve the legislative drafting system
for the state, both the legislative and executive branches. Other states may have better and
more modern procedures to assure better law making processes.
The Legislative Council is a constitutionally mandated entity, as follows:
There shall be a bi-partisan legislative council consisting of
legislators appointed in the manner prescribed by law. The
legislature shall appropriate funds for the council's
operations and provide for its staff which shall maintain bill
drafting, research and other services for the members of the
legislature. The council shall periodically examine and
recommend to the legislature revision of the various laws
of the state. Art. IV, 1
The Legislative Council is an important institution in that it is a bi-cameral agency and is
largely staffed by non-partisan professional staffs. It holds the promise of being the
vehicle for many steps that could modernize and enhance the effectiveness of the law
making process.
3. art|c|pat|on In Mu|t|-State Crgan|zat|ons
One impact of term limits and reduced legislative branch funding is the lack of
participation by state legislators in multi-state legislative organizations such as the
Council of State Governments, National Conference of State Legislators, Uniform Laws
Commission and other leadership organizations for legislators and government officials.
The Project will work with legislative leaders to provide registration and travel assistance
to legislators, particularly newer legislators that would benefit from such participation.
Broader public support, and private financial support, should be identified to assure full
participation in these critical organizations.
4. Deve|op|ng a strong profess|ona|, fu||-t|me po||cy staff to serve the
|eg|s|ators.
Many observers believe that a term-limited legislature, of necessity, must rely to a greater
extent on professional staff. It is simply not possible, for example, for a House member
with 2-3 years experience to effectively manage an appropriations subcommittee
spending billions of tax dollars each year.
Stiengthening Nichigan uoveinment Institutions Pioject
Page 7 of 10

Strengthening the Michigan Legislative Council.
The Legislative Council is a constitutionally mandated entity. The Legislative
Council is an important institution in that it is a bi-cameral agency and is largely
staffed by non-partisan professional staffs. Given the complexities of critical
policy areas such as health care, education, criminal justice, urban decline,
municipal bankruptcy, and other areas, the citizens of Michigan would benefit
from a Legislature with an adequate professional policy staff with deep
knowledge of issues developed over a period of years.
Designing Legislative access to federal funds for planning.
Billions of federal dollars are appropriated annually under the Constitutional
requirement that all funds be appropriated. As federal funds become a greater
share of funds available for State programs, there may be a need to enhance
legislative understanding and control over federal funds. In particular, many
federal funds include allocations for planning that are spent by executive branch
agencies and local units. A way should be found to make a small portion of those
funds available for legislative planning and oversight. For example,
approximately $1 billion in federal funds flow through the legislative
appropriations process with almost no deep understanding of the impact of those
funds other that to incorporate them in the state budget.
Staffing balance between partisan staff and policy expertise.
There is a need for an external review of the tendency since term limits to reduce
professional policy staffs and increase the proportion allocated to partisan
activity. As one of the political branches, the Legislature needs and is entitled to
sufficient partisan and constituent relations staff to serve the citizens. But as the
law-making agency in Michigans State Government, there is an equal need for
policy staff with substantive expertise.
S. Leg|s|at|ve Leadersh|p and 1ra|n|ng Academy
At the start of each new legislature, a number of efforts are made to provide new
legislators with basic training on their new public service roles. These well-intentioned
efforts, unfortunately, attempt to do too much in too little time. There is a better way to
help legislators develop the skills, values and knowledge they need to be effective for the
time they are in the legislature.
Interestingly, there is more training available for potential legislators before there are
candidates than after they are elected. For example:
The Michigan Political Leadership Program (MPLP) at
Michigan State University (MSU) recruits, trains, and
inspires tomorrows public policy leaders, preparing them
with vision, commitment, and the skills for effective
governance.
A peimanent, piofessional, nonpaitisan Acauemy focuseu solely on state legislatois
anu theii staffs is one way to institutionalize the effoit to stiengthen the institutions
Stiengthening Nichigan uoveinment Institutions Pioject
Page 8 of 10

anu woiking of the legislative bianch. 0sing both tiauitional anu technology-baseu
tiaining - incluuing, meetings, ietieats, online couises, uigital aichives, etc. - the
Acauemy can be a continuing iesouice foi public officials. The Acauemy can also be
the vehicle foi accessing the iesouices of national oiganizations such as the Council
of State uoveinments (CSu) anu the National Confeience of State Legislatois (NCSL),
of Nichigan baseu acauemic, nonpiofit anu business iesouices.
Why Not Iust L||m|nate 1erm L|m|ts?
Nichigan's constitutionally manuateu lifetime teim limits aie a majoi unueilying
cause of the goveinment's uysfunction anu shoulu be iepealeu. Bowevei, the voteis
aie unlikely to make the change.
The focus of the Pioject to iuentify ways to stiengthen goveining institutions in a
teim limiteu enviionment. Wheie the voteis have imposeu, anu aie unlikely to
iepeal, a law manuating that public officials have manuatoiy inexpeiience, theie is a
neeu to stiengthen othei institutions to give these well meaning, intelligence but
inexpeiienceu public officials the tools to accomplish theii impoitant tasks.
Adm|n|strat|on
Structure and Adm|n|strat|on of the ro[ect
The Project is being organized in early 2014.
Key elements of the structure and proposed administration include:
Fiscal Agent: Cornerstone Foundation (Richard McLellan, Treasurer)
Advisors: Michigan House of Representatives:
Honorable Tom Leonard (R)
Honorable Any Schor (D)
Honorable Kevin Cotter (R)
Honorable David Knezek (D)

Advisors: State Senate: TBD

Liaisons with Executive Branch:
Honorable James Haveman, Director, Department of Community Health
William Rustem, Director of Strategy, Executive Office of the Governor

Liaison with Legislative Council: Honorable John Strand, Director
Advisory Committee Members: TBD
o Former legislators
o Former government officials
o Community leaders

Fiscal Elements
Stiengthening Nichigan uoveinment Institutions Pioject
Page 9 of 10

o Multi-year budget.
o Estimated budget of $500,000 per year for 3-5 years.
o All private donations to lessen the burdens of government.
o Funds administered either through Cornerstone Foundation or Legislative
Council.
o Transparency: all corporate/foundation donors will be public.
o Fund raising advisor: Ms. Susy Avery, Executive Director, Michigan
Womens Commission
Staffing: TBD

o Administrative assistant.
o Accounting: David Haddrill, CPA
o Project Manager
o Legal counsel
! Chief counsel
! Retained law firm
o Research Director
o Communication advisor (retained firm)
1he ko|e of r|vate kesources In 1op Leve| Government Management
Historically, governors and legislative leaders have benefited from public interest efforts
by the private sector to assist government. (These efforts are separate from the
appropriate and essential lobbying activities by private interests, whether corporations,
nonprofits, unions and others to affect public policy.)
A brief list of public service contributions by private interests includes:
"Loaned executive" programs.
The uncompensated services of hundreds of citizens through service on state
boards and commissions.
Salary supplements to permit hiring of highly qualified people.
Pro bono legal services by lawyers and law firms.
Pro bono service contributions by other professionals including accountants,
communications professionals, management consultants, etc.
Philanthropic donations and grants falling within the broad category of "lessening
the burdens of government."
"Public-private partnerships."
Private funding of state assets, e.g., the Library of Michigan's Rare Book Room,
the Frank J. Kelley Law Library in the Department of Attorney General, and the
Michigan Chemistry Council gift of construction a hazardous chemicals building
to the Michigan State Police.
Public interest advertising donated by the media.
Attendance at a conference, training session, or other meeting, the expenses of
which are paid in whole or in part by a private source, if the attendance is
primarily for the benefit of the state.
Stiengthening Nichigan uoveinment Institutions Pioject
Page 10 of 10

Extensive private volunteer efforts to assist state government leaders in
addressing major policy issues, e.g., the Secchia Commission and the McPherson
Charter School Commission.
Private funding for revisions to the constitutionally required governors residence.
Private funding for state-hosted events, e.g., the National Governors Association
Meeting in Michigan.

1ax ku||ngs Affect|ng the rogram
The use of private funds to assist government agencies in carrying out their duties
have been subject to thorough legal analysis that is available to potential donors.
The tax status of these programs can be summarized as follows:
The governmental unit, i.e., the state, must consider the organizations
activities to be the governments burden. There must be an objective
manifestation that the governmental unit considers the organizations
activities as a governmental burden. The governmental unit must accept
the activities of the organization as its responsibility and recognize the
organization acts on the governments behalf.
Solely establishing that the government or an official approves of an
organizations activities cannot satisfy the test. The organization is
required to show that the state and/or local government accept the
organizations activities as their responsibility and recognizes the
organization as acting on their behalf.
These activities must actually lessen the burden of government.





THE CORNERSTONE FOUNDATION
The Cornerstone Foundation was established in 1967 as a Michigan
Nonprofit Corporation. It is designated as a tax-exempt entity under
Section 501(c)(3) of the Internal Revenue Code (IRC) with Federal
Tax ID Number: 38-6143625. The Foundation is organized
exclusively for charitable and educational purposes, including
carrying out any lawful purpose permitted under Section 501(c)(3) of
the IRC. The Foundation is restricted by its organizational
documents from participating or intervening in any political
campaign on behalf of any candidate for public office. The IRS
issued a Determination Letter reaffirming the Foundations status as
a Section 501(c)(3) tax-exempt entity on August 29, 1996). The
Foundation has a License to Solicit Charitable Contributions issued
by the State of Michigan, Department of Attorney General (MICS
License #3005, effective through July 31, 2013). The Foundation
may accept corporate and nonprofit donations and donations are
deductible to the donor as charitable contributions under Section
170 of the IRC. The address of the Foundation is: Cornerstone
Foundation, attn: Secretary, 201 Townsend St., Suite 900, Lansing,
MI 48933. Web site: www.micornerstonefoundation.org