
We are looking at the all-time record here in GR for snowfall in February. Couple more inches and we will have it.
Yes, it's pretty. Someone please make it stop now...
Granholm: There absolutely have been problems, and those problems are being addressed. In fact, one of the problems is that we... frankly John Engler privatized the health care delivery system, and I'm not blaming him, that was one of the things that was done in order to try to manage it better, but that system, and a federal district judge has said that it is poorly run, particularly with respect to mental health, and so we are doing a whole internal review process.
State Senate Majority Leader Mike Bishop says he has compiled a list of $900 million worth of spending cuts to balance the state's budget -- he just doesn't want to share the list with the public yet.
Bishop, a Rochester Republican, said his colleagues in the GOP-controlled Senate have pieced together a budget-balancing plan that contains no new taxes, no fee increases and no budgetary "gimmicks." But his proposal to eliminate the current $900 million deficit has not been unveiled to taxpayers or the governor.
"I haven't made it public because I feel the proper thing to do is to have discussions with our legislative colleagues and the governor. This is an ongoing process of negotiations," said Bishop, who took over the Senate leadership post in January.
When Bishop spoke by telephone with Gov. Jennifer Granholm on Thursday, he did not share the details of the GOP plan.
We can only conclude her continued lack of communication with the Legislature on serious issues is intentional.
"This is the $900 million question. They need to show the governor and the public their list," said Liz Boyd, Granholm's press secretary. "The governor has been very forthright in presenting her plan."
The Senate leader is expected to move toward the start of a negotiating process early next week when he meets with House Speaker Andy Dillon, a Redford Township Democrat. But it's unclear when the list of cuts will face public scrutiny.
The Republicans also rejected a Granholm executive order on Feb. 14 to cut $166 million in spending from the current budget, calling it inadequate. Those two opposition moves have prompted criticism from the state budget office. Spokesman Greg Bird said "it certainly makes us skeptical" of the GOP's emphasis on spending reductions.
The senator said the GOP plan includes cuts, bureaucratic restructuring, elimination of government waste, and other savings.
Albin: The number one question we get asked is, "Why don't lawmakers take a pay cut to help with the budget problem?"
This year's deficit: $940,000,000.
Lawmaker's salary: just under $80,000.
Number of lawmakers: 148.
Total budget for their salaries: $11,840,000.
Total budget deficit without lawmakers salaries: just over $928,000,000.
Albin: But what if you just eliminated the Legislature altogether; their staff, their retirement, their salaries, their offices, their health care, everything.
Albin: The House Fiscal Agency, which, by the way, wouldn't be funded under this scenario, says that all costs of the Legislature run in excess of $116 million dollars. If all of that were eliminated, the state would still be $820 million dollars in the red.
At $79,500 a year, Michigan legislators are the second-best paid among states with full-time lawmaking bodies, topped only by California. The Council of State Governments says that with adjustments for inflation, state legislators now make 13% more than their counterparts did in 1975. A council survey found lawmakers in other states, including New York, Wisconsin, Illinois and Ohio, lost ground over that period.
WASHINGTON -- Michigan faces a loss of more than $2 billion in federal money over the next five years if budget cuts proposed by President Bush become law, according to separate analyses by Michigan's hospitals and a Washington think-tank.
A report released Wednesday by the Center on Budget and Policy Priorities in Washington estimated Michigan would lose about $1.1 billion from 2008 to 2012 in spending on nearly a dozen federal programs. The Michigan Health and Hospital Association estimated that changes in Medicare and Medicaid would cut $1.1 billion from funding over the same period.
K-12 education: $221 million
Vocational/adult education: $149.6 million
Child care block grants: $13 million
Head Start: $86.3 million
Clean water programs: $111.2 million
Home heating aid: $136.2 million
Community services grants: $122.4 million
Public housing capital fund: $47.7 million
Community Development Block Grants: $160.1 million
Law enforcement grants: $94.7 million
Women, Infants and Children nutrition program: $17.3 million
Reductions in other federal programs leave Michigan and other states with unappealing choices, said Sharon Parrott of the Center on Budget and Policy Priorities.
"States can scale back the services they provide," Parrott said. "Or they can raise revenues by increasing taxes."
Bush supporters say Michigan will benefit from a balanced budget and income tax cuts.
"It may be small comfort for people looking for immediate relief," said Alan Viard, an economist at the conservative American Enterprise Institute in Washington.
LANSING, Mich. -- Senate Republicans said Tuesday they want to offer affordable health insurance to uninsured Michigan residents who earn too much money to qualify for subsidized care proposed by Gov. Jennifer Granholm.
The GOP plan also would give incentives to Medicaid recipients who live healthier and encourage similar incentives for state employees, including lawmakers.
Republicans said their legislation would accompany Granholm's plan to offer a basic, no-frills health plan to 550,000 uninsured residents with incomes below 200 percent of the poverty level.
Under the Democratic governor's plan, announced in January 2006 and awaiting federal approval, participants would be charged premiums and copays on a sliding scale, with lower-income residents paying nominal out-of-pocket costs. The GOP wants to extend the plan to people making more than 200 percent of the poverty level.
LSJ: Do you feel besieged, though? It just seems like it's hardly a day goes by that we don't hear - it was Chrysler yesterday, Pfizer a couple of weeks ago.
Granholm: There is no getting around the fact that our state is in crisis. ...
For Michigan, the automotive capital of the world, our strategy going forward has to be this strategy of investing and diversifying, and creating and attracting the kind of businesses that build on the strength of the auto industry but take us into new directions.
And frankly, I think that part of that investment strategy is marketing Michigan throughout the country for both tourism and business. Because if they don't know about us, they're not going to come.
... This is a great moment in Michigan because there's this huge sort of clash of philosophies that is happening and I think it's - Michigan is the paradigmatic state right now for how to deal with this massive shift in the global economy. And what is it that a state like Michigan or any state that has lost a major industry to globalization - what can we do to position ourselves differently?
And I think, because of the focus in the 20th century being so much on costs; states thought you cut taxes enough, you'll be able to recruit the job providers to come to your state and that was more or less true in the 20th century.
And then the 21st century, it's a different paradigm. You have to have competitive taxes, but the notion that it's all about cost and cost alone is never going to be a winning strategy in a global economy. Because there will always be countries that are cheaper to do business in than the United States.
Our strategy has to be competitive taxes, yes. But investing in quality of our people and our state has got to be the way we move forward.
What is Michigan's first gentleman, Daniel Granholm Mulhern, thinking?
As Detroit's automakers plummet through various stages of free-fall, as home values slide, foreclosures rise and the very fabric of the state is stressed to the breaking point, he uses his weekly e-mail blast on leadership -- "Reading for Leading" -- to extol the leadership of Toyota.
In fact, is he thinking at all?
The Toyota folks and the great company folks know that “culture beats strategy” every time. They have strategies to achieve results. But they know and constantly verbalize that the only way you get results is through people. For these folks it’s not just that people are the necessary means, but that people are ends in themselves. It’s not just that the employees are there for the company’s success, but at some really deep level, they believe the company is there for the employees’ success. So they pay attention to people. They have a “what” of results they’re pursuing, but they pay primary attention to the who and to the how.
Yes, they do, witness the competitive tsunami pushing Big Detroit Auto to the brink of all it holds dear -- jobs, plants, profits, market share, its standard of living, survival -- because Detroit waited way too long to rouse itself from its self-satisfied torpor.
But do we need the first gentleman, husband of the governor who ostensibly will "go anywhere and do anything" to create jobs, opining right now on the blockbuster leadership techniques of the foreign archrival kicking Detroit's collective behind?
Answer: No, we don't, especially when there are scores of analysts, academics, journalists and average-joe consumers variously equipped to trash Detroit with impunity and exalt the virtues of all things Toyota.
"Messages are complicated," he replied. "To send a message is different than to receive a message. When people are sensitive, they may not hear a message."
That's one way of putting it.
Garcia said the Senate, where the Republicans hold a slim majority, will offer a plan soon. He noted that the governor knew about the shortfall for more than two months before revealing her plan.
GRAND RAPIDS -- Dick DeVos was asked in last year's gubernatorial campaign if there was a teacher who had a profound influence on him while growing up -- and he said he knew the answer instantly.
DeVos on Thursday said he wanted to pay tribute to that teacher, Imogene Vader, by naming a restocked library at Grand Rapids's Alger Middle School in her honor.
-snip-
DeVos, son of Amway co-founder Richard DeVos, donated $25,000 to buy more than 2,000 books for the Alger library. Heartwell said the donation was planned last year, but DeVos asked not to have it be announced until after the election.
"All of us have had at least one teacher who had had a tremendous impact on us, maybe in the classroom or outside. Maybe it was what they taught in class, but maybe it was a lesson in life," DeVos said. "The books in this library are tools, and it takes great teachers to use those tools and help children."
Vader, who died six years ago, was DeVos' fifth-grade teacher at what was then called Ada Public School in the Forest Hills district.
Her husband, Adrian Vader, was among the relatives attending Thursday's gathering.
"I was not exactly a straight-A student at the time," DeVos said after the ceremony. "And Mrs. Vader had such a great passion for learning. She knew how to encourage you to do your very best. And you knew where she stood on any subject. My hope is that this library will remind us of her, and of all great teachers."
LANSING -- Thirty State Police troopers are in line to lose their jobs April 1, the first round of layoffs prompted by the state's deepening budget crisis, troopers' union officials said Friday.
The layoffs would drop on-the-road trooper strength close to 1,000, the lowest in more than 30 years, said officials at the Michigan State Police Troopers Association. The reduction means lower trooper visibility on highways and slower response times, they said.
Matt Resch, a spokesman for House Republican Leader Craig DeRoche of Novi, said the layoffs smack of saber-rattling by Gov. Jennifer Granholm, who has offered a plan of tax hikes and budget cuts to solve the state's financial problems.
"Instead of working with the Legislature on the budget, the governor is taking this opportunity to scare people," he said. "To think that we can't find the money to save 30 State Police officers' jobs indicates this governor is not willing to do her job."
"In fact, I had a press conference this morning and said 'You need to put your plan on the table'. Let me know what you have votes for. Because my guess is, that they will find, as Ken Sikkema did when he was the Senate Majority Leader last time, he put an all cuts budget on the table, and he said 'OK, which of you guys wants to sponsor it?'
Nobody wanted to sponsor it, because it's too draconian.
So, they need to put their plan on the table. And if they can't come up with a plan, they need to work with us, off of this plan."
The GOP plan will resolve this year's budget gap -- now pegged at $956 million -- by cuts alone, Bishop said. It's a mistake, he added, to fix the budget "by little cuts" that may or not fit into their plan.
Bishop, R-Rochester, said Thursday that a bipartisan panel Granholm set up last month to examine how the state could get out of its chronic budget problems recommended "wide, deep reforms in government."
"She adopted their ideas for tax increases but didn't adopt their ideas for cuts and reforms, which is troubling to a lot of us who want to see significant solutions for the future," Bishop said.
Michigan should not rely solely on budget cuts to balance state budgets this year and next.
Relying exclusively on budget cuts to balance the current and FY 2007–08 budget would mean devastating disinvestment in important programs and services supported by the General Fund and significant cuts in school aid.
Even assuming complete replacement of the revenues lost from eliminating the SBT ($1.9 billion), General Fund cuts required to resolve the immediate crisis of this year and next would still be significant and dramatic. They would fall on (a) nursing home residents who rely on Medicaid funding; (b) Medicaid-eligible children whose health coverage would be eliminated or slashed; (c) families with students at community colleges and public and private colleges and universities who would receive tuition bills significantly higher than current levels; (d) residents of communities who would see layoffs of police and fire personnel as local units of government take another $400 million in cuts in revenue sharing; and (e) residents who would see prisoners released hurriedly without plans for their return to communities. In Medicaid, slashes in spending only shift burdens and higher costs onto employers and individuals as health care providers and insurers tap other pockets. If state government prunes revenue sharing to local units of government, the public will face ballot proposals to levy additional local taxes to offset losses in state support.
Requiring specific measurements of performance, value, and benchmarking from all public agencies, including K-12 and higher education. Undertaking comprehensive health care reform. Encouraging, and if need be requiring, local units of government and school districts to share or consolidate administrative services and deliver them more cost effectively. Reforming Public Act 312, which requires binding arbitration. Providing taxpayers annually with an understandable report card on state and local spending and taxing. Continuing to explore and apply best practices from other states and information technology to more efficiently enforce business regulations and lessen the time and costs to business of meeting regulatory requirements.
The state must restructure taxes in a manner that would immediately increase revenues, but Michigan should not solely tax its way to balanced state budgets.
But it's also a mistake not to grab whatever savings you can right now. Each month of delay may result in deeper cuts to make up the difference later in the fiscal year. Surely Republicans don't want to be responsible for landing the state in that position.
Republicans also should keep in mind that their actions could draw notice from Wall Street. Michiganders may accept their executive order rejection as just a ploy, bizarre as it seems, in complex, high-pressure budget talks. But bondholders, lenders and other Wall Street observers may not dismiss it so readily as just politics. A downgraded credit rating would add even more red ink, in the form of higher interest, to an already overwhelmed budget.
LANSING -- Gov. Jennifer Granholm ratcheted up the rhetoric today surrounding the state's budget crisis, calling for Republican lawmakers to show some "courage and backbone" in addressing the $800 million deficit.
Senate Republicans on Wednesday rejected Granholm's plan to eliminate the deficit, which is centered around a new 2-cent tax on services. Republican leaders said the state's red ink can be erased with budget cuts.
"I call upon Republicans to have the courage and backbone to put a specific plan on the table and put up the votes for a plan," Granholm said in an early morning news conference.
"I'm not going to shadow box. If they don't like this plan, what is their plan?"
Republicans said Tuesday they believe it's their responsibility to find additional budget cuts before asking citizens to pay more taxes. Senate Majority Leader Mike Bishop, R-Rochester, said his caucus would propose its own budget-balancing plan in the coming weeks.
"Republicans are pushing a fiscally responsible approach to this crisis," Bishop said. "We have a constitutional obligation to balance the budget."
Asked about the governor’s comments, Senate Majority Leader Mike Bishop, R-Rochester, said Granholm’s strong rhetoric isn’t matched by a commitment to address the serious problems facing the state, and indicates a “sense of insecurity” about her own proposal.
Bishop said “conducting a fight in the media is not productive,” and shows a lack of leadership. Legislative Republicans are working on alternatives, he said, and will present them as soon as possible.
Granholm said the Senate could have passed her executive order budget cuts now and if they don't favor the tax increase they could approve more reductions later. Budget Director Bob Emerson said Republicans' contention that they can't approve the executive order because it implies support for a future tax hike is "a feeble excuse."
"The crisis is upon us. Every day we wait exacerbates the crisis," Granholm said.
She added she doesn't believe Republicans can muster the support for the deep program reductions it would take to balance the budget.
"I would like to see how many senators are willing to vote for school cuts in the middle of the school year," Granholm said.
Granholm Budget Director Robert Emerson said at some point Republicans "have to declare what they're for. We know what they're against -- they're against whatever the governor proposes. It's pretty hard to sit down with somebody when you don't know what they stand for."
Overall, a DeVos encore is opposed by 52 percent of voters and favored by 38 percent -- equaling the 14-point spread by which he lost to Granholm last November, when the final tally was 56-42.
Presidential candidate Mitt Romney walked past DeVos on his way into the convention hall. "Nice house," Romney said, stopping for a moment to shake DeVos' hand. "I heard you had a big house, I didn't realize it was this big, though." DeVos seemed to look puzzled for a moment until he got the joke -- the conversation took place in the lobby of DeVos Place, named after the former gubernatorial candidate's family.
Cox said, "Dating services are not for the faint of heart. Not only can they be very expensive, but they can create safety and security problems for unsuspecting consumers. People thinking about subscribing should do their own background checks on dating services to find out how their personal information will be used, and they should make sure they understand and accept what's in the contract, especially terms limiting their ability to cancel the contract or receive refunds. And consumers who decide to sign up should remain cautious about disclosing personal information and take safety precautions before arranging meetings with prospective partners."
LANSING -- Senate Republican leaders said today they will turn down Gov. Jennifer Granholm's budget-balancing plan for this year because they oppose a tax hike she has proposed.
The $800 million-plus deficit in the budget year that ends Sept. 30 can be entirely closed by making cuts, said Senate Majority Leader Mike Bishop, R-Rochester.
"The Republican caucus has said we can get it done with cuts and we're going to put our money where our mouth is," Bishop said.
He didn't specify where the cuts would be made, but said school aid reductions are on the table.
The rejection of the governor's executive order, to be made official at a Senate Appropriations Committee meeting later today, means Granholm must propose another plan within 30 days. Republican senators will draft their own proposal for balancing the budget in the next couple weeks, Bishop said.
Many of the speakers at Saturday's Republican state convention brought up their opposition to a 2 percent tax on services that Democratic Gov. Jennifer Granholm proposed last week.
But even more popular than the speeches were the buttons made by GOP state senators that showed the word "TAX" with the universal circle symbolizing "forbidden" over it.
So the buttons also said, "Naysayer - And Proud of It." They were one of the hottest items at the convention.
She claims her tax hikes will wipe out the state's deficit and allow Michigan to create new initiatives to improve its attractiveness. But the more likely outcome is that the state's economic decline will accelerate and tax revenues fall.
Granholm's risky budget is notable for the "investments" it doesn't make.
Granholm says other studies indicate no money would be saved by breaking the teacher union stranglehold on health insurance. But what's the down side of finding out? The governor would rather reach into the pockets of Michigan's struggling families than stand up to the special interests that got her elected.
Her budget plan also doesn't invest in innovation.
But the automakers have also slashed their operations again and again. They've exited certain businesses, sold off subsidiaries and farmed out work to contractors. Their structures look vastly different today than they did five years ago. The state's operation looks basically the same.
One thing the governor certainly didn't invest in is pink slips. The governor's budget does not significantly reduce the size of the state payroll. She boasts that the work force is smaller than when she took office, but she never addresses whether every person drawing a state paycheck is essential to the well-being of the state. Again, this is what the automakers have done and continue to do.
We applaud Granholm's emphasis on education and retraining workers, but those new initiatives must be paid for by spending cuts in other areas. If the governor sticks to her promise this time to pressure school districts and municipalities to merge services and operations, it will benefit taxpayers.
Were she willing to do the hard work of bringing fundamental reform to every branch of state government, she could find the savings needed to bring Michigan through this economic crisis.
Senate Appropriations Chairman Ron Jelinek, R-Three Oaks, asked state budget director Bob Emerson during his budget presentation to the House and Senate Appropriations committees what would happen if the new sales tax isn't approved.
Emerson said it wouldn't be prudent to turn down the sales tax plan. But he added that he would work with Republican lawmakers to eliminate more spending in the budget if they didn't agree to the tax.
"We'll be looking to your sage advice ... for Plan B, because we don't have one right now," Emerson said.
Michigan families will notice a difference if the Governor's plan is passed. But how much of a difference? We decided to take pencil and paper, to find out just how much that might cost an average family in West Michigan.
Todd and Jennifer Katerberg are lifelong West Michigan residents. With three kids, a dog, and one income, they are careful about how they spend their money. So, they're curious about what a two percent tax on services could mean for their checkbook. Jennifer says, “I don't know how much we'll change. I guess we'll just see how it goes."
Add it all together, and it's $467.50. A two percent tax on that would be $9.35.
Some tax payers like Stephanie Helder of Belding understands of the Governor's proposal. "I guess she has to try to find a way to make up for it."
"If that's going to help the state of Michigan to get back to where it was before anything will do," said Constance Dukes of White Cloud.
The governor called them "naysayers" -- a value-neutral term for a certain kind of Michiganian.
The kind who sat in his (and occasionally her) legislative seat when Jennifer Granholm said, "I will not make cuts that destroy Michigan's ability to compete and win."
Right now, the naysayers are pundits and politicians, Lansing regulars and Republicans -- an impatient group who ganged up on the guv with post-State of the State reproaches.
They sneered at her speech -- all that charisma and inspiring rhetoric -- as too darn perky. Too optimistic.
It's a logical way to acknowledge the shift in the state's economy, from a producer of goods to a creator of services.
Granholm's critics complain that she failed to project enough sense of crisis -- to adequately convey the kinds of trauma that await the state if the Single Business Tax is not addressed, if the $3.5 billion tax shortfall is not remedied.
Fellas, we get it.
In Michigan, we don't live in denial. We live in a state of bated breath -- waiting for the next $12 billion Ford loss, the next Pfizer to spirit away 2,400 jobs.
It's not delusional to expect a leader to have vision, to imagine the state competing in the 21st century, because its residents value education, investment in technology and good government.
Remind me, please, of the great American states that get by without picking up trash, paving roads, educating children, without building or health care or helping the poor.
And say "nay" to the Granholm's vision -- the commitment to schools, to a higher-tech and to people -- at your peril. Because this state will not survive by starving itself.
LANSING – Michiganders would pay a 2% tax on most services — from tickets to movies and concerts to haircuts to auto repairs — under a proposal Gov. Jennifer Granholm will make Thursday to try to solve the state’s budget crisis.
Two-thirds of the revenue from what the administration is calling an excise tax would come from business transactions such as accounting, consulting, legal or tax services.
Health care, including day care, government and school purchases would be exempted.
The “two-penny plan” would raise an additional $1.5 billion annually. For a family of four with an annual income of $57,000, administration officials estimate $67 in new taxes.
WASHINGTON -- President Bush proposed on Monday a $2.9 trillion budget with cuts to social programs that critics say could deepen Michigan's economic and budget crises.
Under the plan, which would cover the 12 months beginning Oct. 1, Michigan would be one of four states to get a cut in funding for Medicaid, the joint state-federal health program for the poor.
Under Bush's plan, Michigan would get about $5.16 billion in 2008 Medicaid funding, $173 million less than it expected to receive this year. That's a 3 percent cut, the largest for any state. The Medicaid program will account for about one-third of all state spending in Michigan this year.
"These are phenomenal cuts," said Sara Rosenbaum, a Medicaid expert at George Washington University. "This is a terrible situation for any state, much less for one whose economy has suffered the way Michigan has."
Neither state nor federal officials could explain why Michigan's Medicaid program would face the nation's largest cut, and there was some confusion among the state's congressional delegation about whether a state-by-state breakdown showing the cut, provided by the White House Office of Management and Budget, was accurate.
Cities in Michigan and other states also would get less money for economic development grants, the state would get less for home heating aid to the poor, and funding for education programs such as special education would shrink.
Bush's plan would eliminate a federal program that helps manufacturers develop new technology and cut another program that provides aid to small manufacturers.
The cuts in domestic programs are part of Bush's drive to increase military spending and make several tax cuts permanent while still balancing the federal budget by 2012. Democrats accused Bush of budget sleight-of-hand, claiming to put the nation on course to a balanced budget but failing to plan for future costs such as the Iraq war and tax law changes.
Bush is seeking $481 billion for the Department of Defense in 2009, an 11 percent increase over this year.
That doesn't include an estimated $142 billion for the wars in Iraq and Afghanistan.

In her State of the State address tonight, Gov. Jennifer Granholm will call for two years of free training or community college for displaced workers -- an initiative she's calling "No Worker Left Behind."
The program would be paid for with federal money and some as yet unexplained state funds, and require workers to get certification or an associate's degree in a high-demand field, such as health care.
The three-year "No Worker Left Behind" program would launch this summer, with around 7,500 workers getting free tuition for 2007-08 besides the 18,000 already being helped. More workers would be added in the 2008-09 and 2009-10 academic years.
Granholm is expected to announce her plan for Promise Zones -- a way for poor, struggling communities in Michigan to set up college scholarship programs for their high school graduates.
Although no thresholds have been proposed yet, the qualifying communities would have to have a certain percentage of residents living in poverty, low levels of educational attainment, a low percentage of residents with college degrees.
If a qualifying community could raise an as-of-yet unspecified level of private donations for college scholarships, then the state would allow it to set up a Tax Increment Financing Authority that would capture half the growth in the community's 6-mill state property tax for education. To get the program going quickly, the TIFA could raise funds immediately by borrowing against future growth.
• Investing about $50 million over three years in public and private sector money to pay for the research and pilot programs of alternative energy companies in Michigan.
• A loan fund of about $12 million that would help the state's alternative energy entrepreneurs reduce their debt and lower costs of capital access for renewable resources.
• Spending about $7 million to install about 1,000 biodiesel and ethanol pumps across the state by the end of 2008.
• Targeting $20 million of state money and at least $11 million from private resources toward the Venture Michigan Fund to help the commercialization of alternative energy companies across the state.
Gov. Jennifer Granholm wants to begin commuting sentences of inmates who pose no safety threat to the public as part of an effort to reduce the state's prison population.
Michigan's annual prison budget is $1.9 billion _ roughly a fifth of the general fund. About 1,500 more inmates are being housed in state prisons this year than officials anticipated _ for a record-high total of more than 51,000.
Older and medically fragile inmates could be released under Granholm's plan. She also plans to consider releasing, with parole board approval, nonviolent drug offenders serving a long string of short minimum sentences.
The immediate problem facing the governor and lawmakers relates to the state's budget situation. State government is expected to be about $800 million short on school and general fund spending plans for the fiscal year that began about four months ago.
Eliminating that deficit will require government restructuring, spending cuts, increases in taxes or fees, or a mixture of all three.
Granholm said Friday during a speech to members of the Michigan Press Association that the state needs to come up with a long-term solution, as it has run out of one-time fixes and will be unable to solve its chronic deficit even once the economy improves.
Bishop hasn't closed the door on some sort of general tax increase but he's certain of one thing: There'll be huge gulf between what he might support and what he expects from the governor and the state's House Democrats.
"They're warming up the choir for a very large tax increase," he said. "And there's not a lot of interest in my caucus in overburdening people."
But stalemate isn't the Rochester Republican's style.
"I'm a manager, but I also want to be known as a leader," he said. "I want to be inclusive."
He shares common ground with Granholm on the notion of streamlining government, he said, perhaps by consolidating small or inefficient school districts and communities.
"I think that's something we could work on: making government more efficient," said Bishop. One of his first solutions would be making the Legislature part-time, a notion he hasn't been able to get out of committee.
Gov. Jennifer Granholm has given many speeches in four years, but perhaps none as important as the one she'll deliver Tuesday.
Granholm's fifth State of the State address must assure Michiganders that things aren't spinning out of control, and she must offer hope for recovery sooner than later.
This is a structural challenge, not simply the result of an economic downturn. A persistently weak economy, tax cuts, spending pressures, and inattention to essential government reform have triggered the crisis. We will not economically grow our way out of it. We cannot solely cut or tax our way out of it. Fundamentally, Michigan must reform its spending and taxing and must reinvent the way state and local governments deliver services to be more efficient and productive.
State Sen. Mark Jansen, R-Gaines Township, credited Granholm with a dynamic presentation.
But he said she may have exaggerated the state's problems, and he still was inclined to support an overall tax cut.
"I think we have to stoke the fires of Michigan's economy," he said.
Rep. Bill Huizenga (R-Zeeland) thinks it's just a way "to lay the groundwork, I believe, for a tax increase."
But the Rochester Republican, along with House Republican Leader Craig DeRoche of Novi, also put out a statement disagreeing with the indications from Granholm and the Emergency Financial Advisory Panel that tax increases need to be in the mix of possible solutions.
"I have been clear over the last month that tax increases on Michigan citizens is not the best long-term solution to our economic trouble," Bishop said in a release. "More important than our state government, it's Michigan families who face crisis."
Since the passage of Proposal A in 1994, Michigan has enacted tax cuts which reduce current state revenue by $3.2 billion a year. In addition, local property taxes have been cut by $5.4 billion.
In FY 2005–06 (the last full year for which data are available), these tax cuts reduced income tax revenue by $1.6 billion, a cut of 20 percent. The income tax rate has been cut by 11 percent (from 4.4 to 3.9 percent), personal exemptions have been increased, special exemptions and credits have been added, and most private pension income has been exempted. If the personal income tax were at the 4.4 percent level of the 1990s rather than the current 3.9 percent level, the state would be receiving $850 million more—or about the level of the estimated shortfall in General Fund and School Aid Fund revenue this year.
Since 1990, the share of all taxes (including property and income) borne by Michigan businesses has declined from 43 percent to 37.9 percent.
According to the Council on State Taxation, in a study produced annually by Ernst and Young, Michigan ranks 36th lowest in state and local business taxes as a share of Gross State Product. If Michigan does not replace the SBT with other business taxes, the ranking would likely drop to the lowest in the country.