Business/Individual Tax Re-Write Clears House

Legislation representing the tax restructuring agreement reached by Governor Rick Snyder, Senate Majority Leader Randy Richardville (R-Monroe) and House Speaker Jase Bolger (R-Marshall) passed the House of Representatives Thursday. The major bill in the package, House Bill (HB) 4361, passed the chamber on a 56-53 vote. Republican Representatives Anthony Forlini (R-Harrison Township), Ken Goike (R-Ray Township), Andrea LaFontaine (R-Richmond), Peter Lund (R-Shelby Township), Rick Outman (R-Six Lakes) and Pat Somerville (R-New Boston), joined all of the House’s 47 Democratic members in casting “no” votes. Representative Gail Haines (R-Waterford) had an excused absence for a family medical situation.

The most significant portions of the plan call for the replacement of the much-maligned Michigan Business Tax (MBT) with a 6-percent corporate income tax on C-corporations and the elimination of nearly all individual income tax exemptions and credits – including the Earned Income Tax Credit (EITC) and the exemptions provided to those collecting public and private pensions (through a three-tier plan).

Following multiple hearings before the House Committee on Tax Policy, the package, which also includes HB 4362, HB 4479, HB 4480, HB 4481, HB 4482, HB 4483 and HB 4484, moved to the House floor Wednesday with final passage achieved mid-day Thursday. Democratic members attempted multiple amendments, both during Committee and floor action, seeking to add back many of the credits removed by the package (EITC, film credits, Brownfield development, etc.).

The new tax structure represents an approximately $1.78 billion business tax cut. The package now moves to the Senate Committee on Finance where, pundits argue, the hurdle may be higher than experienced in the House.

posted by PAA Online , Friday, April 29, 2011 10:41 AM
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Governor Delivers Plans For Education Reform

On the heels of a budget recommendation that includes a $470-per-pupil funding cut, and referencing statics that show only 16-percent of students graduation from Michigan schools are prepared for college, Michigan Governor Rick Snyder unveiled his plans to reform the state’s education system in a Special Message to the Legislature delivered Wednesday from the Southeast Michigan United Way in Detroit.

Snyder explained that the financial crisis facing as many as 23 school districts, including the Detroit Public Schools, are so significant that Emergency Financial Managers are likely to be appointed.

Six of the eight State Board of Education members and State Superintendent of Schools Mike Flanagan listened as Governor Snyder outlined a significant list of initiatives and called on the Legislature to complete the reform by the 4^th of July. The full text of the Governor message, as well as other information, is available here.

The Governor’s plan includes:

· Increased health care insurance cost contributions from employees

· A statewide anti-bullying policy

· Tougher teacher certification requirements

· Lifting the charter school cap in troubled districts

· Expanded schools of choice

· Reform of the teacher tenure program

· Dashboards for all districts

· Opening non-instructional service contracts for bid by intermediate school districts (ISDs) and neighboring school districts

Regarding the tenure program reform, many expected the Governor to call for complete elimination. Rather, Snyder’s plan would have all teachers begin on a 5-year probationary period and be awarded tenure for three years of effective service. The criteria for “effective service” would include measures of student success. Two consecutive years of “ineffective” service would warrant termination under the plan.

posted by PAA Online , 10:39 AM
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Senate Moves All Budgets

The State Senate moved swiftly this week, passing all 16 fiscal year (FY) 2012 department budgets, eight Tuesday and eight Wednesday. Only one of the 16 budgets, Agriculture and Rural Development, received any Democratic support. Some Republicans voted “no” on a handful of budgets. In an interesting move, after witnessing every offered amendment defeated at the committee-level, Democrats chose not to offer amendments on the Senate floor. Both Tuesday and Wednesday; however, were full of impassioned speeches by all 12 members of the minority caucus.

Tuesday saw the Senate tackle budgets for Agriculture and Rural Development (SB 169), the Department of Community Health (SB 172), the Department of Corrections (SB 173), the Department of Energy, Labor & Economic Growth (SB 175), the Department of Human Services (SB 179), the Department of Natural Resources (SB 182), General Government (SB 177) and the Michigan State Police (SB 184). None of the budgets had passed with significant changes from the versions addressed by the Senate Appropriations Committee.

Wednesday was a different story. The other remaining eight budgets were Community Colleges (SB 171), the Department of Education (SB 174), the Department of Environmental Quality (SB 176), the Department of Transportation (SB 185), Higher Education (SB 178), Judiciary (SB 180), Military and Veterans Affairs (SB 181) and, by-far the most contentious, the K-12 school aid budget (SB 183).

The K-12 budget was heatedly debated for a majority of the day’s session, with half of the body delivering speeches (including all 12 Democratic members). The debate came to an end with a reportedly surprising number of Republican “no” votes, requiring Lt. Governor Brian Calley to deliver the tie-breaking vote for a 20-19 final tally. Senators Jack Brandenburg (R-Harrison Township), Mike Green (R-Mayville), Goeff Hansen ((R-Hart), Dave Hildenbrand (R-Lowell), Rick Jones (R-Grand Ledge), Mike Nofs (R-Battle Creek) and Tory Rocca (R-Sterling Heights) joined their 12 Democratic colleagues in opposing the spending plan. The roughly $12.4 billion appropriation remained largely unchanged from earlier Committee action, including a $340 per-pupil total reduction.

Many of the Senate’s budgets depart from the Governor’s recommendations. The Higher Education budget, for example, significantly reduced the Governor’s proposed use of $700 million in school aid fund money in the Senate version.

posted by PAA Online , 10:38 AM
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House Moves “Minibus” Budgets

The House Appropriations Committee moved combined “minibus” FY 2012 budgets to the House floor this week, largely on party-line votes and after rejecting a litany of Democratic-sponsored amendments. The combined budgets are a goal the Snyder Administration is trying to achieve in this budget process.

The first two minibus budgets were addressed Tuesday, a combined State Police, Judiciary, Department of Corrections and Military and Veterans Affairs budget (HB 4523) and a combined Department of Agriculture and Rural Development, Department of Environmental Quality and Department of Natural Resources budget (HB 4524). The highlight of Tuesday’s work was the addition of an amendment by Representative Nancy Jenkins (R-Clayton) restoring $500,000 to avoid State Policy Trooper layoffs.

Wednesday’s Committee action moved two more combined spending plans to the House floor – a minibus budget for the Department of Community Health, the Department of Education and the Department of Human Services (HB 4525) and a budget for the Department of Energy, Labor and Economic Growth, the Department of Transportation and General Government (HB 4526). In a rare moment, Representative Joan Bauer (D-Lansing) was successful in securing the 14 necessary votes for her amendment to restore roughly $8 million in cuts for senior programs, such as Meals on Wheels, in the Department of Community Health budget.

The final bill, HB 4325, combines the school aid (K-12) budget with the Community Colleges and Higher Education budgets. The House Appropriations Committee approved the measure Thursday. The panel decreased the per-pupil foundation grant cut from 3.9-percent, as recommended by Governor Snyder, to 3.5-percent – approximately $50 million. In other highlights, the higher education portion of the spending plan includes tuition restraints and dips into the school aid fund for $700 million, both as recommended by Governor Snyder and both in conflict with the Senate-passed versions.

posted by PAA Online , 10:36 AM
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PAAdvisory Briefs

Ferguson to Stay with MSU

Current Michigan State University Board of Trustees Chair Joel Ferguson has decided to forego an opportunity to join the Greek Town Casino Board and stick with the University. The Lansing-based developer and Democrat chose the unpaid leadership position at MSU over the large pay day on the Casino Board. State law prohibits and individual from serving in both capacities.

Lawsuit to Challenge EFM Law

According to State Senator Bert Johnson (D-Highland Park), a lawsuit will be filed in the next three to four weeks challenging Michigan’s recently enacted new Emergency Financial Manager (EFM) law as it is being applied in Benton Harbor. Joseph Harris, the current EFM in Benton Harbor, has used the new statute to remove all authority from Benton Harbor’s Mayor and city commissions and boards.

21^st Century Jobs Fund Expands Reach

Under legislation signed by Michigan Rick Snyder Tuesday, the 21^st Century Jobs Fund will be open to two new sectors. Agricultural processing and information technology companies have now been added to the four original sectors of advanced automatic, alternative energy, homeland security, and life sciences. Senate Bill 144, sponsored by Senator Mike Green (R-Mayville), also provides the Michigan Strategic Fund Board the authority to consider loans and grants to any company demonstrating innovative use of technology.

Recall Effort Launched Against Pscholka

Benton Harbor City Councilman Dennis Knowles filed recall language with the Berrien County clerk Thursday against freshman Representative Al Pscholka (R-Stevensville), sponsor of the new Emergency Financial Manager law. Following a hearing of the County Election Commission to determine if the language is clear, Knowles, reportedly with the support of Kentucky-based Heartland Revolution liberal group will have 90 days to secure 6,671 valid signatures for the recall question to appear on the ballot. The language, as filed, reads, “For sponsoring and supporting Public Act 4 that has robbed the citizens in District 79, namely the city of Benton Harbor of their democratic rights, 1. Empowering a non-elected Emergency Financial Manager; 2. Striking local municipal government representation for, of and by the people."

“No Budget, No Pay” Measure Moves

A proposed constitutional amendment that would stop legislators’ pay for each day the next fiscal year’s budget is not complete past 90 days prior to the start of that fiscal year passed the Senate Reforms, Restructuring and Reinventing Committee Wednesday. SJR E, sponsored by Senator Dave Hildenbrand (R-Lowell), passed the panel on a straight party-line vote of 5-2. State budgets were not complete prior to the October 1 start of the fiscal year in both 2007 and 2009, resulting in partial, although brief, government shutdowns.

Senate Passes No-Age Limit Hunting Legislation

Senate Bill 207, sponsored by Senator Joe Hune (R-Fowlerville), passed the Senate 30-6 Wednesday with Republican Senator Roger Kahn (R-Saginaw) joining five Democrats in voting “no.” The measure removes the age requirement for a hunting license in Michigan (currently 10 years old, or 12 to hunt bear, deer or elk with a firearm) and establishes a “mentoring youth hunting license” for those under 10 who are hunting with an adult mentor of at least 21 years of age.

posted by PAA Online , 10:35 AM
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