Tuesday, May 29, 2007

Budget Update

A little delayed, but here's the latest on the budget. I wanted to get comments from Chris Ward and Joe Hune's office before posting this. As soon as I hear back with the official explanation and not speculation, I'll update this.

Some good news. The budget deal for 07 took place without raising taxes. The bad news? It was a bit of a gimmicky budget, and the “Matt Millen of Governors”, Granholm is going to push even harder for a tax increase for 08 as she’s a quintessential tax and spender.

From the Detroit News

LANSING -- State lawmakers and Gov. Jennifer Granholm tonight came to a budget deal for the current year, breaking a 3 = -month impasse, that avoids shutting down government, cutting per-pupil state aid or enacting a major tax increase.

Legislative leaders, the governor and key aides huddled behind closed doors all day and a deal cutting $317 million from the budget was announced to lawmakers about 6 p.m. About an hour later and without debate, the Democratic House approved the pact on a 69-37 vote; the Republican Senate quickly followed suit, 26-10.

The deal also involves tapping a substantial amount of money from a lawsuit settlement with tobacco companies.

The specifics of the budget cuts and the amount of money siphoned from the tobacco suit were not immediately known. But the agreement averted a $116 per pupil reduction in promised school aid that had been threatened since May 1. School district officials said that kind of loss at the end of the school year would be devastating.

The legislative sessions scheduled for Saturday -- weekend sessions are an extreme rarity -- were canceled. Lawmakers will return to work next week to complete action on dealing with this year's $800 million shortfall. Not all of the deficit was eliminated by tonight's action.

While this year's problem will be addressed without a major tax increase, the same cannot be said for the budget year beginning Oct. 1, when spending is expected to exceed revenues by at least $1.6 billion. Chances are that an income tax and sales tax increase will be needed to close that gaping hole; economists don't expect a turnaround in Michigan's economic fortunes until sometime in 2008.

Highlights:
No loss of school aid
No tax increase for this fiscal year
No cutbacks in Medicaid reimbursements
Money will be borrowed from tobacco settlement
Additional cuts likely next week


Our County was split on the budget. Valde Garcia voted for it, while both Chris Ward and Joe Hune opposed it. I looked at the votes and it wasn’t a normal split.

The senate was more party line than the house, but even there you had the most conservative (Sanborn) and one of the most leftist (Gilda Jacobs) state senators both voting for it. Most of the nay votes were from hardline liberals with the exception of Barcia and Prusi.

Roll Call No.151 Yeas--26
Jason Allen (R)
Valde Garcia (R)
Roger Kahn (R)
Randy Richardville (R)
Glenn Anderson (D)
Tom George (R)
Wayne Kuipers (R)
Alan Sanborn (R)
Patricia Birkholz (R)
Jud Gilbert (R)
Michelle McManus (R)
Tony Stamas (R)
Mike Bishop (R)
John Gleason (D)
Dennis Olshove (D)
Mickey Switalski (D)
Cameron Brown (R)
Bill Hardiman (R)
John Pappageorge (R)
Samuel Buzz Thomas (D)
Deb Cherry (D)
Gilda Jacobs (D)
Bruce Patterson (R)
Gerry Van Woerkom (R)
Alan Cropsey (R)
Ron Jelinek (R)

Nays--10 (All Dems)
Jim Barcia
Irma Clark-Coleman
Michael Prusi
Martha Scott
Raymond Basham
Hansen Clarke
Mark Schauer
Gretchen Whitmer
Liz Brater
Tupac Hunter

Excused--2
Nancy Cassis (R)
Mark Jansen (R)

Not Voting--0

Some comments in the record from Bill Hardiman and Roger Kahn:

Senator Hardiman's statement is as follows:

Mr.President, I just want to say that I really appreciate all the work that has gone into negotiating this bill and this agreement. There are many wonderful aspects about it, and I will support it. I do have a problem with the higher ed component of the bill. I think it treats those universities that are bringing in more students very unfairly, and the Governor has stated that she wants to double the number of college graduates. The universities that are working to do that are penalized under this bill, but there are so many other wonderful aspects and I do believe we need to come to some conclusion. I will support the bill. I, once again, appreciate those who have negotiated this.


Senator Kahn's statement is as follows:

It has been a long and tough day, tough for our people, tough for us here. This bill has flaws in it. I think we all recognize that. In my community, it, too, is tough on higher education. I've talked to the people in my education community and they are sorely disappointed. I've also talked to the chair of higher ed who I'm grateful to say will work hard to preserve the ability of each of our universities to have a floor under which will fund all students.

On the other hand, this bill preserves and protects revenue sharing. It preserves and protects fees paid to medical care providers, and I can tell you that the medical care providers have suffered long for many years. I will vote for this bill so that the process moves forward to providing us a balanced budget in 2007 and allows us to discuss where we are going to be for Michigan in 2008.


On the house side, the vote was 69-37

Roll Call No. 173 Yeas--69

Frank Accavitti (D)
Mark Corriveau (D)
Bill Huizenga (R)
John Proos (R)
Dan Acciavatti (R)
Craig DeRoche (R)
Rick Jones (R)
Dave Robertson (R)
Dave Agema (R)
Andy Dillon (D)
Michael Lahti (D)
Tory Rocca (R)
Kathy Angerer (D)
Marie Donigan (D)
Phil LaJoy (R)
Bettie Scott (D)
Richard Ball (R)
Kate Ebli (D)
Davie Law (R)
Rick Shaffer (R)
Steve Bieda (D)
John Espinoza (D)
Gary McDowell (D)
Fulton Sheen (R)
Darwin Booher (R)
Barbara Farrah (D)
Arlen Meekhof (R)
Joel Sheltrown (D)
Jack Brandenburg (R)
Ed Gaffney (R)
Kim Meltzer (R)
Mike Simpson (D)
Terry Brown (D)
Lee Gonzales (D)
Fred Miller (D)
Dudley Spade (D)
Pam Byrnes (D)
Kevin Green (R)
Tim Moore (R)
John Stahl (R)
Barb Byrum (D)
Martin Griffin (D)
Mike Nofs (R)
Glenn Steil (R)
Tom Casperson (R)
Richard Hammel (D)
Paul Opsommer (R)
Steve Tobocman (D)
Bruce Caswell (R)
Ted Hammon (D)
David Palsrok (R)
Aldo Vagnozzi (D)
Bill Caul (R)
Goeff Hansen (R)
John Pastor (R)
Mary Valentine (D)
Brenda Clack (D)
Dave Hildenbrand (R)
Phil Pavlov (R)
Howard Walker (R)
Ed Clemente (D)
Jack Hoogendyk (R)
Tom Pearce (R)
Lisa Wojno (D)
Paul Condino (D)
Hoon-Yung Hopgood (D)
Gino Polidori (D)
Coleman Young (D)
Bob Constan (D)

Nays--37
Fran Amos (R)
Morris Hood (D)
Gabe Leland (D)
Neal Nitz (R)
Joan Bauer (D)
Ken Horn (R)
Lamar Lemmons (D)
Michael Sak (D)
Doug Bennett (D)
Joe Hune (R)
Steven Lindberg (D)
Tonya Schuitmaker (R)
Brian Calley (R)
Shanelle Jackson (D)
Jim Marleau (R)
Alma Smith (D)
Andy Coulouris (D)
Bert Johnson (D)
Jeff Mayes (D)
Virgil Smith (D)
George Cushingberry (D)
Robert Jones (D)
Mark Meadows (D)
John Stakoe (R)
Robert Dean (D)
Marty Knollenberg (D)
Andy Meisner (D)
Chris Ward (R)
Kevin Elsenheimer (R)
Kathleen Law (D)
Tim Melton (D)
Rebekah Warren (D)
Judy Emmons (R)
Richard LeBlanc (D)
John Moolenaar (R)
Lorence Wenke (R)
Matt Gillard (D)

Comments:
Rep. Kathleen Law, having reserved the right to explain her protest against the passage of the bill, made the following statement:

"Mr. Speaker and members of the House:

I voted no on SB436 because of the lack of a tie bar to revenue. While SB 436 does not cut medicade funding and funding for medical providers it does cut into the bone and sinew of the states citizens. Continued administrative shifts and deferrals will not solve our current crisis."

Rep. Elsenheimer, having reserved the right to explain his protest against the passage of the bill, made the following statement:

"Mr. Speaker and members of the House:

I would vote for this bill if it did not include the cut to the Bovine TB fund. I have spent a great deal of time working to move toward several northern Michigan counties acquiring TB free status, and the loss of this line item will make that almost impossible. The resulting disruption to the sale and movement of beef cattle has the potential to affect millions of dollars in transactions in this industry, and will set back the advances being made to fight this devastating disease. There were several other areas inn the budget where cuts could have been made without raiding this fund.

Beyond the Bovine TB issue, I am not pleased that the bill was distributed to the minority only minutes before a vote was taken on the bill."


Rep. Leland, having reserved the right to explain his protest against the passage of the bill, made the following statement:

"Mr. Speaker and members of the House:

I voted no on SB 436 because of the cuts to services that are critical to the most vulnerable citizens in my district and the state of Michigan as a whole. In particular, cuts to the Healthy Michigan Fund, which funds the Morris Hood Diabetes Outreach program, and minority health initiatives. Additionally, cuts to Arts & Cultural grants will cause devastation to important cultural tourism and local arts programs that are essential to the development and revitalization of our communities. Furthermore, because this bill is not tie-barred to a bill that provides additional revenues, it still leaves our state in a budget deficit after these draconian cuts."


Rep. Hood, having reserved the right to explain his protest against the passage of the bill, made the following statement:

"Mr. Speaker and members of the House:

I voted no on SB436 because of the reductions and elimination of programs that are critical to the most vulnerable of our citizens. The cut to Community Colleges, where people go when they are unable to attend a University, is crucial. The institutions of higher learning provide a service when people have limited choices, because of finances, transportation, or health issues. The reduction in Community Health (61million plus) hits many of the programs that are needed. These cuts will cost us more in the long run because of the lose of prevent ional measures. When we talk about being Environmentally responsible, but turn around and cut over 310,000 dollars in our Environmental Quality budget, which is used for contamination cleanup, are we as really worried about our environment. When programs are cut out of this budget such as the Morris Hood diabetes center, located on the campus of Wayne State University, which serves people with diabetes, which is one of our leading contributors of death, all across this state with treatment and prevention is a disgrace."


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Overall, I'm glad there's no tax increase, but I don't like the gimmicks. This is a pass the buck stopgap measure delaying the hard decisions until later. I still would have voted for this as it was the least worst solution considering the time constraints with the schools cuts. However, a real long term solution needs to be made, and it needs to be made without a tax increase to bail out the fiscal mismanagement by government.

There's a lot more work to do.

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