Friday, September 28, 2007

Talks continue today, deal close?



Believe it or not, signs are pointing to a deal being done by Sunday.


Putting together the clues from the Detroit News, the Freep, the AP, and MIRS, you can get a picture of where they stand, and all four are reporting about the same thing-


First the AP. They don't get into the numbers like the others.


Granholm mingled with members of the Democrat-led House early Friday. Then she disappeared down a hallway with Dillon, leaving some lawmakers to believe that a deal was getting closer. Negotiations have been centered on proposals to raise the state's income tax, possibly expanding the sales tax to include some services and a host of cost-cutting moves, including public employee benefits.


Next, the Detroit News-


Speculation in the halls of the Capitol ran wild during the day in which proposals went back and forth between House Democrats and Senate Republicans. The two sides were about $200 million apart on the $1.75 billion deficit, and the remaining outstanding issue was reform of public employee health care.


MIRS reports this as a rumor, but it does fit with other reports (and one starts to wonder if they all just feed off of each other). More details-


The Senate had supposedly agreed to accommodate a 4.3 percent tax increase, and was willing to accommodate a sales tax on higher end services (marinas golf courses, etc.) if the Democrats could put up enough votes. These two revenue-producers would add up to $1.5 billion annually. It wasn't clear whether there would be a phase out, or, if there is a phase out, what the timing or trigger would be.


Also unclear was how many "yes" votes the Democrats would have to put up on the tax increases. Earlier in the night the magic number was supposedly 56 in the House for the income tax side - but that may have been part of an earlier "almost a deal."


By the time the House broke up and members were headed home, the story for more than three hours had been that deal involved the Senate version of reforms to the Michigan Education Special Services Association (MESSA).


And finally the Freep-


Legislative leaders continued what were described as earnest discussions to raise the state income tax, expand the sales tax to some services and come up with perhaps $400 million in spending cuts.


The sales tax on services was a closely held secret, as negotiators feared that disclosure of services that might be taxed would launch intense lobbying by affected businesses to kill an agreement.


And that might explain why they are coming back after 1 PM today- the Friday news dump. Do this on a Friday afternoon, people leave for the weekend, can't call and complain and/or pressure members who might be otherwise influenced by special interests. Just a guess.


WOOD just reported that the conference committee will meet this morning around 9:30. Another good sign; maybe they have something to do.


Bottom line- three are reporting around $1.5 billion as a final number. Very, very good sign.


However, today motions will continue to prepare the state for a shutdown in case this all falls apart. Check back at Michigan.gov later for a complete list of closed services and plans and other preparations, which in itself may be an interesting study of how you bring a huge machine such as a state government to a (partial) halt.


Good luck everyone.