Michigan Supreme Court Rules On Pension Tax

The Michigan Supreme Court ruled 4-3 in In Re Request for Advisory Opinion Regarding Constitutionality of PA 38 bringing to a close the question of the future of the pension tax as passed by the Legislature in May as a portion of overall tax reform.

The Court held that the imposition of personal income tax on public-sector and private sector pensions was constitutional, as well as the provision basing the determination of eligibility for exemptions on the taxpayer’s birth date.

Ultimately reversed by the Court is the provision basing eligibility for exemptions and deductions based on the taxpayers “total household resources.” The Court found that this provision violated the Michigan Constitution’s ban on graduated income tax. Chief Justice Robert Young, Jr., Justice Stephen Markman, Justice Mary Beth Kelly, and Justice Brian Zahra issued the majority opinion. Justice Michael Cavanaugh, Justice Marilyn Kelly, and Justice Diane Hathaway dissented.

The ruling will cause an estimated $60 million negative revenue impact in fiscal year 2011-2012 – a hole Governor Rick Snyder and the Legislature will need to fill.

posted by PAA Online , Wednesday, November 23, 2011 11:08 AM
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Congressional Supercommittee Fails

The bipartisan, bicameral “supercommittee” in Congress charged with eliminating a $1.2 trillion budget gap over 10 years failed to meet their self-imposed deadline and the anticipated finger-pointing has already begun.

Michigan was the only state with two members on the supercommittee, U.S. Rep. Dave Camp (R-Midland), Chair of the House Ways and Means Committee, and U.S. Rep. Fred Upton (R-St. Joseph), Chair of the House Energy and Technology Committee. Both have expressed their disappointment with the failure of the body to accomplish their goals – and both have committed to continuing to work.

Republicans reportedly held to their position of not addressing new revenue from the mostwealthy Americans, while Democrats reportedly were unwilling to go as far as Republicans wished on the cut side.

The failure of the supercommittee to compromise and fulfill their goals will put into effect automatic, across-the-board cuts in 2013.

posted by PAA Online , 11:07 AM
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Republican Nominee In 51st Special Named

The Republican Party’s nominee to replace recalled State Representative Paul Scott in the 51^st House District will be Genesee County Commissioner Joe Graves.

Mr. Graves became the nominee after an interesting tiebreaker. After the second round of voting, Mr. Graves and fellow County Commissioner Miles Gadola were tied with seven votes each from the 14 members of the executive and statutory committee members that live in the 51^st District.

Options after the second vote were a coin toss or picking slips of paper. Mr. Graves became the nominee when he chose the paper labeled, “elected.”

Genesee County Democratic Party Chair Art Reyes has indicated that the party is in the process of choosing a date and location for the convention when they will select among the roughly six candidates for the Democratic nominee to run for the marginal House seat. It remains to be seen what, if any, role former Rep. Scott will play in the election.

posted by PAA Online , 11:06 AM
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Democratic Recall Efforts Ceased By GOP

GOP recall coordinator Stu Sandler and the Michigan Republican Party have ceased efforts to recall members of the Michigan House of Representatives.

Citing the completion of specific goals and recognition of what the Michigan Education Association (MEA) had to spend to be successful in the effort targeting former Representative Paul Scott, Sandler indicated that the decision was made following discussions with party leaders.

Six Democratic lawmakers were targeted and had reached the level of approved ballot language, which included efforts to recall State Representatives Tim Bledsoe (D-Grosse Pointe), Lisa Brown (D-West Bloomfield), Phil Cavanagh (D-Redford Township), Brandon Dillon (D-Grand Rapids), Dian Slavens (D-Canton Township), and Jim Townsend (D-Royal Oak).

posted by PAA Online , 11:05 AM
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PAAdvisory Briefs

PAA Offices Closed

Public Affairs Associates will close at 2:00PM on Wednesday, November 23^rd and will re-open Monday morning, November 28^th. From all of us at PAA, we wish you and your families a Happy Thanksgiving.

Pscholka Recall Attempt Over

The effort to recall State Representative Al Pscholka (R-Stevensville) because of his sponsorship of what became Public Act 4, the controversial new emergency manager statute, has ended. Language for the recall effort was approved in May and organizers had until Friday, November 18^th to submit signatures to the Secretary of State. None were submitted.

Benton Harbor Schools’ Finances to be Reviewed

State Superintendent of Public Instruction Mike Flanagan has ordered a preliminary financial review of the Benton Harbor Area Schools to be completed by December 20^th. According to Flanagan, the school district could have a budget deficit of $18 million by the end of the 2011-2012 fiscal year. The preliminary financial review is the first step toward the potential appointment of an emergency manager.

posted by PAA Online , 11:03 AM
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