It’s official: Michigan's home health care ”dues skim” has ended.

For the first time since 2006, the Service Employees International Union is not deducting money from the Medicaid checks of the state’s 59,000 home-based caregivers.

James Haveman, director of the Michigan Department of Community Health, confirmed that the money no longer is being taken from the checks.

”The Department of Community Health successfully ended the contract with the SEIU and, in turn, stopped the dues from being taken out of Michigan home health care worker paychecks,” Haveman said. ”Making this happen was a priority for me and our administration and I’m glad to see that with this next round of paychecks this has become a reality.”

The SEIU, however, took $34,416,335.21 from the elderly and disabled in Michigan, according to the Michigan Capitol Confidential skim tracker, an online scrolling ticker that was tracking the money the SEIU took.

In the meantime, the Mackinac Center Legal Foundation has taken legal action in an attempt to get some of those dollars returned to the caregivers. That case with the Michigan Employment Relations Commission is still pending.

“The dues skim went beyond the usual controversies and battles involving government unions,” said MCLF Senior Attorney Derk A. Wilcox. “It was a scam that government allowed a union to perpetrate against home-based caregivers. This forced unionization was a one-sided arrangement by which the union profited without providing equivalent services.

“What continues to amaze is that other unions still rhetorically defend it,” Wilcox continued. “Do they really want this scam to be used as an example of a union? If so, it speaks volumes about how far union leaders have wandered off course.”

In an effort to increase dues-paying members, the SEIU targeted the Medicaid checks of Michigan’s home-based caregivers. A forced unionization, in 2005, was used to force the caregivers into the SEIU. Key elements of the scheme included a dummy employer, a stealth-by-mail election and avoiding any media attention.

The scheme was set up when Jennifer Granholm was governor.

This week marks the first anniversary of Gov. Rick Snyder’s signing of legislation that was drafted to outlaw the skim.

“From the moment I became aware of the unionization of private home help workers I knew something just did not seem right about it,” said Sen. Dave Hildenbrand, R-Lowell, the sponsor of Senate Bill 1018, which was signed by Gov. Snyder. “Throughout the discussions and testimony received on this issue it became quite clear that these individuals where not state employees, a critical component necessary in order to be organized under the statute that the original unionization was authorized through.

“In fact, in many cases these were relatives providing assistance to a loved one and ultimately all employment decisions were the responsibility of the person receiving the care,” Sen. Hildenbrand added. “This crafty deal, made behind closed doors, to skim state Medicaid dollars from these individuals’ checks was just wrong and I am glad we were able to put an end to it.”

According to the most recent information provided to the Michigan Department of Community Health, 63 percent of the caregivers were friends or relatives of the person for whom they were providing care.

The SEIU went to great lengths to continue taking the money, including putting Proposal 4 on the 2012 statewide ballot. Had Proposal 4 passed, the forced unionization would have been locked into the Michigan Constitution. But voters solidly rejected it.

Just days before the 2012 general election, Gov. Snyder replaced the entire MQC3 board. The new board announced that there would be no contract extensions and the dummy employer, the Michigan Quality Community Care Council, would be dissolved in April 2013.

Russ Knopp, one of the replacements Gov. Snyder put on the MQC3 board, said the MQC3 has successfully been dissolved. Knopp, the owner and operator of Comfort Keepers of Northwest Michigan, an elder care company in Traverse City, gave a general description of the last MQC3 board meeting.

“The registry has been moved over to the department (MDCH).” he said. “It is up and running and has been tested already. It also looked like the last box of files was in the process of being transferred from MQC3 to the department.

“That was our last board meeting. The organization has been disbanded.”

The primary function of the MQC3 board in its final months of existence had been to facilitate a smooth transition under which the state health department would take over the registry of home-based caregivers. Maintaining the registry of workers who had undergone background checks might have been the only thing of real value that MQC3 provided. Its only other major function seemed to be making sure the union received money taken from the elderly and disabled.

However, the registry’s usefulness was minimal. It accumulated just 933 names over a six-year period. It appears to have been initially assigned to the MQC3 to add a veneer of legitimacy to the scheme by providing the dummy employer with a function.

Zac Altefogt, spokesman for SEIU Healthcare Michigan, did not respond to a request for comment.

Despite repeated failures, the Michigan Legislature is pushing ahead with extending, and in some ways expanding, a government program that hands out select tax breaks, subsidies and loans to particular firms and special interests.

The “21st Century Jobs Fund” law enacted in 2005 created a smorgasbord of selective business subsidy-granting techniques targeted at different types of economic activities and actors. Reviews of this and other state “economic development” programs show that they consistently fall short on jobs projections, lack sufficient documentation for auditors, and spend tens of millions of state dollars with little or no return for taxpayers.

Capitol Confidential did a series of articles on the program last summer. The results are summarized below – all programs fall under the 21st Century Jobs Fund or a directly related area:

• The Michigan Pre-Seed Capital Fund loaned $7.7 million to 35 companies with the promise of 390 jobs – only 79 jobs were created.

• Mascoma Corp., a biofuel company from New Hampshire, was awarded over $20 million from Michigan as part of the Centers of Energy Excellence program on top of $100 million from the federal Department of Energy. The company promised 70 jobs and a new ethanol plant in the Upper Peninsula – it reports only three jobs, a failed initial public offering (IPO) and no plant.

• The Centers of Energy Excellence program awarded 12 grants worth $67 million with the promise of 1,746 jobs – only 588, or one-third, of the jobs came to be.

• The Renaissance Zones program exempts certain companies from state and local taxes: The program predicted it would generate $826 million in private investment and create 1,061 jobs – the reality was $268 million in investment and only 220 jobs; a third of the investment and a fifth of the jobs.

• The Competitive Edge Technology program gave $30 million to seven universities and projected 411 jobs – only 153, less than half, were actually created.

• The Michigan Strategic Fund gave $1.65 million in a direct investment to Microposite Inc. to make “environmentally friendly” siding – the company created zero jobs and went out of business.

• The Michigan Auditor General found that multiple parts of the 21st Century Jobs Fund did not provide sufficient documentation for a significant portion of the reported achievements. A separate audit of the Brownfield Redevelopment Financing Program found that the state treasury did not “evaluate the effectiveness” of the program – it was estimated that “79 percent of the brownfield authorities had not submitted annual financial status reports from 2008 through 2010.”

• A 2010 analysis from the Detroit Free Press found that only one-third of the jobs promised by the 21st Century Jobs Fund ever materialized. A vice president at the MEDC acknowledged the numbers but maintained that the program would pay off for the state in the long run.

Since the 21st Century Jobs Fund was created in 2005, large bipartisan majorities of the legislature have steadily expanded its scope. Despite the program’s failures, a series of recent Senate bills perpetuating the program and revising its subsidy-granting decision-making apparatus have been introduced and appear to be on a fast track. They include the following, with descriptions provided by MichiganVotes.org:

• Senate Bill 269, sponsored by Sen. Mike Kowall, R-White Lake, would eliminate a 2015 sunset on funding for the program, making permanent a law directing that $75 million be appropriated for it every year.

• Senate Bill 278 and Senate Bill 270, sponsored by Kowall and Sen. Judy Emmons, R-Sheridan, respectively, eliminate requirements that fixed proportions of the program’s spending be allocated though the various subsidy-granting methodologies authorized under its numerous sub-programs. Along with other bills in the package, these essentially convert this from appearing to be a "rule-based" subsidy program governed by statutory prescriptions and restrictions into one in which the political appointees on the Michigan Strategic Fund board have more discretion to give out subsidies as they choose.

The Mackinac Center’s Director of Fiscal Policy Michael LaFaive has co-authored several studies examining the results of various state corporate activities over the years. He told Capitol Confidential: “Government ‘economic development’ programs are intended to boost the economy by letting a small group of supposedly ‘far-sighted’ experts, bureaucrats or politicians give discriminatory subsidies to particular firms or industries. History has demonstrated repeatedly that whether rule-based or discretionary, the concept misallocates scarce human and financial capital, creates unfairness, generates abuses like crony capitalism, and doesn’t grow the economy. Given that record, these bills are the equivalent of re-arranging the deck chairs on the Titanic while leaving the throttle set at ‘full speed ahead.’ ”

Senators Kowall and Emmons did not respond to a request for comment.

(Editor's note: Every Saturday, Michigan Capitol Confidential brings you a story about a bill being discussed in committee or presented in the Legislature for a vote. For more information, go to www.MichiganVotes.org.)