Friday, May 25, 2007

The state budget shuffle continues

Wait a minute. We've heard this song before.

State lawmakers and Gov. Jennifer Granholm today came to a tentative budget deal for the current year that will avoid shutting down government, cutting per-pupil state aid or enacting a major tax increase.

Legislative leaders and the governor and key aides huddled behind closed doors all day today. The House approved the deal on a 69-37 vote, without debate, an hour after it was announced at about 6 p.m. The Senate is expected to follow suit this evening on the pact, to cut $317 million from the budget.

The way Albin spun it at 6PM- the Republicans will get the cuts that they already passed earlier in the Senate, and they didn't have to agree on anything for next year. While the details have yet to come out- he made it sound like the Democrats have rolled over, looking to protect their "vulnerable" members from having to do the right thing vote for a tax increase. At least for now.

Since Bishop isn't crying to the press about the governor or running off to pass more insane cuts, it appears that assessment is correct.

Nothing is finished yet, though.

Lawmakers will return to work next week to complete action on dealing with the deficit, which was estimated at $800 million.

So when the media says "budget deal", they really should say "partial budget deal" at this point.

Besides the cuts, we will borrow from the tobacco money- the word "securitization" was brought up by the AP.

Part of the solution for fixing the current year deficit will come from tapping the state's share of a national settlement with big tobacco companies.

Under the agreement, the Senate will drop its proposal to take $290 million from the 21st Century Job Fund to deal with the deficit.

Well, since both the AP and the Freep said that move was illegal in the first place, it's hard to see how it was considered a real threat.

The real threat appears to be lack of backbone from some House Democrats on increasing revenues. From yesterday-

House Democrats still haven't voted on a tax increase proposal, raising questions about whether there is enough support to pass any one of several options under consideration. House Speaker Andy Dillon, a Democrat from Redford, has said he doesn't want to take a vote until enough pieces of an overall agreement are in place to ensure it would also be approved by the Senate and by Granholm.

Sounds like a cop-out. Always did. And the fact that they were supposed to do it "this week", which became "Thursday", which became "Friday", and still didn't do it, says quite a bit.

The AP story tells of more accounting gimmicks. Bet Wall Street will be happy about that. They keep adding details, so check here for updates.

The deal also would delay the remaining half of August payments to universities and community colleges until October.

Cuts would hit the state Court of Appeals and Supreme Court, Legislature and other state departments. There also would be a series of one-time fixes such as transferring money from special funds to help balance the budget.

To sum it up- they made some cuts, borrowed some money, transferred some more from "special funds" (whatever THAT means), didn't finish the job, and blew town for the holiday weekend.

That's probably a good thing. If this initial spin is correct, it looks like we will be flinching at every scare tactic that Mike Bishop throws in our face.

The Freep hints at this being a deal towards a tax increase for next year. While I pray that is accurate, I don't trust the Republicans to keep their agreements. The way they held the Merit Scholarship hostage comes to mind.

The deal is believed to be linked to a vote on an income tax increase for the 2008 fiscal year, which begins Oct. 1. Details of what form that tax might take were not immediately known.

They also have more specific details on the cuts.

The administration calls this a "good night" for schools and health care, and while that is true, the major showdown over revenue is still to come. Keep the hope that whatever deal was struck today leads to adequate future funding for our state.

Or, we can continue to do this year after year after year...