Senate Panel Sends Fy 2012 Budget To Senate Floor

After two full days of hearings, the Senate Appropriations Committee completed their initial work on the fiscal year (FY) 2012 budget, having acted on all 16 departmental budgets and cutting $330 million more than the $1.2 billion cut in Governor Snyder’s budget proposal. The Panel’s Chairman, Senator Roger Kahn (R-Saginaw) called attention to two main portions of the budget that now moves to the Senate floor: the absence of accounting gimmicks and one-time fund shifts and the holistic “pre K – 20” approach to education funding.

Meanwhile, Democrats, led by Committee Minority Vice Chair Senator Glenn Anderson (D-Westland), were nearly united in their “no” votes on almost every budget passed by the Senate panel and expressed their concerns over the spending plan’s potential impact on municipalities and school districts.

A significant highlight of the Senate-passed FY 2012 budget, and in clearest departure from Governor Snyder’s budget proposal, the Senate reduced the per-pupil funding cut from the $470 per-pupil proposed by the Governor to $340 per-pupil by only contributing $200 million in School Aid Fund (SAF) dollars to the state’s 15 public universities. The Governor proposed $500 million in SAF to Higher Ed. The $12.4 billion budget includes an $87 million cut to categoricals and a $175 million cut by funding half-day kindergarten programs at half the previous level.

On the Higher Ed side, the Senate panel moved a budget with a flat 15-percent cut as the Governor proposed; however, did not include the Governor’s request for boilerplate language regarding tuition restraint. Under the Governor’s proposal, universities that chose to raise tuition by more than 7.1 percent could face more significant cuts, as high as 23 percent. Last week the House Appropriations Subcommittee on Higher Ed moved their plan with different cuts for different schools – the University of Michigan receiving the biggest hit, Lake Superior State University the smallest.

In a departure from the Subcommittee’s recommendations, the full Appropriations Committee added two pieces to the Higher Ed budget, both representing conservative social issues. Senator John Proos (R-St. Joseph) successfully amended the budget to require universities to report activities on embryonic stem cell research and Senator Mark Jansen (R-Gaines Township) amended the bill to require universities to report on efforts to accommodate the religious beliefs of students in counseling programs.

The General Government budget closely mirrors Governor Snyder’s recommendations, ending the $301 million statutory revenue sharing program and replacing it with the $200 Economic Vitality Incentive Program. Municipalities can earn the funding through implementing best practices such as developing citizen-friendly reports on finances, combining services both internally and externally, and changing employee contributions for benefits. The budget also reduces revenue sharing to counties to $100, as the Governor proposed.

With some minor changes here and there, the Senate panel passed many departmental budgets (Treasury, AG, Civil Rights, State, and Technology Management & Budget) as the Governor proposed. Others, such as those described above as well as the Department of Corrections, Department of Transportation, and the Department of Human Services, contained significant differences to the Governor’s proposal and/or the action by the House of Representatives.

The full Senate is expected to move on all sixteen budgets next week.

posted by PAA Online , Friday, April 22, 2011 10:15 AM
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“Sell” On Tax Deal Begins

Lt. Governor Brian Calley began the process this week of explaining the details of the new, revised tax plan as agreed to by Governor Snyder and legislative leadership. Appearing before the House Tax Policy Committee on Wednesday, the Lt. Governor characterized the Administration’s efforts in tax reform and the agreement signed-off on by Senate Majority Leader Randy Richardville (R-Monroe) and House Speaker Jase Bolger (R-Marshall) as a “game-changer.”

Mr. Calley explained that the new package, currently being drafted, would also include a measure to provide a $25-per-child tax credit for those eligible for the Federal Earned Income Tax Credit (EITC) – an addition he is working with Committee Chair Jud Gilbert (R-Algonac) to finalize. This, coupled with the increase in the Homestead exemption to 100-percent for those with income under $20,000, represents $100 million in relief for the poor, according to the Administration.

Most of the Lt. Governor’s time; however, was spent explaining and defending the new plan’s amended tax on public and private pensions. Those 67 and older would see no change in the current income tax exemptions for retirement income; while those between 60 and 67, and those younger than 60 (in 2012) would see phased-in versions.

Lt. Governor Calley was quick to point out that Michigan currently ranks 4^th in tax treatment of senior citizens and that, with this move, the state would still be ranked in the top ten (8^th). Overall, under the plan, Michigan would rank 14^th lowest in income taxation among those states that levy such taxes. Mr. Calley also clarified that the compromise agreement would bump back the income tax rate reduction (from 4.35 percent to 4.25 percent) to January 1^st of 2013 and that the Administration will soon release a proposal to replace the Brownfield tax credits that had originally been eliminated under the Governor’s proposal. Local governments had been touting the benefits of these tools and encouraging the Administration to retain the credits in the overall restructuring proposal.

Representative Gilbert stated that he hoped the Committee would be ready to move the substitute legislation next week encompassing the arrangement agreed upon by leaders.

posted by PAA Online , 10:14 AM
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State Revenue Projections Expected To Jump

In what will likely add an interesting wrinkle to the ongoing fiscal year (FY) 2012 budget debate, multiple officials have now indicated an expectation that the next round of revenue estimates will bring somewhere between $250 and $500 million in new resources.

Senate Appropriations Committee Chair Roger Kahn (R-Saginaw) stated Thursday that based on a number supplied to him by the Senate Fiscal Agency, he believes state officials will have as much as $500 million in addition revenues when the May Consensus Revenue Estimating Conference takes place. This comes less than a week after House Fiscal Agency Director Mitch Bean explained that he has the General Fund up $180 million and the School Aid Fund up $90 million.

Senator Kahn’s statement came as the Senate Appropriations Committee completed their work on the FY 2012 budget. The Chairman explained that the expected new money illustrates that the budget debate is ongoing and that the question of where the potential resources would be directed will be debated in coming weeks, citing examples such as incentive programs to local units and additional payments towards the state’s retiree health care cost debt of $13 to $14 billion.

The May Consensus Revenue Estimating Conference is scheduled for 9:00AM on Monday, May 16^th.

posted by PAA Online , 10:14 AM
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Jackson County Sheriff Named Corrections Director

After a 3-month search that reportedly included one top choice turning down the offer, Jackson County Sheriff Daniel Heyns was appointed Director of the Michigan Department of Corrections by Governor Rick Snyder. Sheriff since 2003, Mr. Heyns will join the Department June 1^st. Interim Director Richard McKeon will remain with the Department, moving to a role as special advisor to Mr. Heyns.

Sheriff Heyns currently serves as Treasurer of the Michigan Sheriff’s Association Board of Directors and Chair of the Michigan Sheriff’s Coordinating and Training Council. A 30-year law enforcement veteran, Sheriff Heyns has a bachelor’s degree in psychology from the University of Michigan, a master’s degree in criminal justice from Michigan State University and is a graduate of the FBI National Academy.

The Director-designate spoke broadly of his management style, describing his intentions to direct the department under guiding principles of cost efficiency, public protection, and effective rehabilitation. Although he stated it was too early to describe many specific ideas, Sheriff Heyns said he would tour corrections facilities in other states as a means to determine best practices and ascertain how they are able to achieve lower costs than in Michigan.

posted by PAA Online , 10:13 AM
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PAAdvisory Briefs

Hoekstra Out – Republican Race for US Senate Wide Open

Former US Representative Peter Hoekstra released a statement announcing his decision not to seek the Republican nomination to challenge incumbent US Senator Debbie Stabenow (D-Lansing) in 2012. The odds-on favorite to enter the race given Mr. Hoekstra’s decision is former Michigan Secretary of State Terri Land, also a running mate to then-Gubernatorial candidate Oakland County Sheriff Mike Bouchard in 2010.

Clinton Named OFIR Commissioner

Former American Physicians Capital CEO Kevin Clinton was appointed by Governor Rick Snyder as the new Commissioner of the Office of Financial and Insurance Regulation (OFIR) following the resignation of former Commissioner Ken Ross. Clinton had been working as a special advisor to OFIR since February and was once an employee at the former Insurance Bureau, now under OFIR’s umbrella.

Camp, Peters Post Big Campaign Fundraising Filings

US Representative Dave Camp (R-Midland), now Chair of the powerful

US House Ways

and Means Committee, posted the largest first quarter fundraising effort and account balance in reports required by the Federal Election Commission (FEC). Mr. Camp reported raising $499,777 from January 1 – March 30, leaving $1.8 million in the bank. US Rep. Gary Peters (D-Bloomfield Hills) came in second among Michigan’s congressional delegation, raising $464,009 in the quarter, banking $531,101.

Two Appointed to MEGA Board

Governor Rick Snyder appointed two to the Michigan Economic Growth Authority Board effective April 18^th: Mike Jackson of Dearborn, Executive Secretary and Treasurer of the Michigan Regional Council of Carpenters and Millwrights and Battle Creek resident Bill Martin, the former Michigan Legislator and current CEO of the Michigan Association of Realtors.

“I’m Sorry” Now Allowed by Doctors

Under legislation supported by the Michigan State Medical Society, the Michigan Health and Hospital Association, the Michigan Osteopathic Association and signed by Governor Rick Snyder on Tuesday, medical personnel are now allowed to express sympathy to a patient or the patient’s family without fear of their words being used against them in a medical malpractice suit. Proponents of Senate Bill 53, sponsored by Senator Jim Marleau (R-Lake Orion), claim the measure will decrease the average cost of suits and increase patient satisfaction.

Secretary of State Proposes Cooperation with State Police

During her first “State of the Secretary of State Address,” Michigan Secretary of State Ruth Johnson proposed allowing State Police Troopers to utilize office space at some branch offices since the Department of State Police is planning to close many of its posts. Troopers’ responsibilities include those that require access to secure high-speed internet connections – already in place at many Secretary of State branch offices.

PLEASE NOTE: PAA will be closing at 12:00 pm on Friday April 22, 2011 for the holiday.

posted by PAA Online , 10:12 AM
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