Monday, October 12, 2009

Day 12: Michigan Budget Held Hostage: Are Republicans Aiming For Another Shut Down?

"Every bill passed by the legislature shall be presented to the governor before it becomes law, and the governor shall have 14 days measured in hours and minutes from the time of presentation in which to consider it." -Constitution of Michigan of 1963

On Oct 1st, 2009, budget bills were passed in the Michigan Senate with the understanding they would then be presented to the governor. To this day, Senate Majority Leader Mike Bishop refuses to release six key budgets: Michigan State Police, General Government, Higher Education, Department of Energy, Labor, and Economic Growth, Department of Human Services and Department of Community Health, out of fear the governor will veto them. The K-12 budget, passed last week, is unfunded at this point.

Day 12 of Michigan Budget Held Hostage news follows:

  • News in Michigan doesn't go statewide unless the AP picks it up. The AP took notice of the hostage budget last week, reports that the move is unprecedented as far as anyone can remember, and even goes so far as to speculate the reasons behind it. Calling this "another game of chicken" similar to the one that happened the night of Sept. 30th, they run through the various scenarios of what may happen next. Here are a few that seem most likely:

    Republicans could hold onto the bills for weeks and dump them in Granholm's lap before midnight Oct. 31, daring her to use her veto pen with no temporary budget in place in November. Under that scenario, Granholm would be responsible for the budget not being done.

    If Granholm goes ahead and vetoes cuts she doesn't like, the move could result in even deeper cuts overall because she can't force lawmakers to pass bills raising the revenue to address the higher spending.

    But the governor also could turn the tables, blaming Bishop for withholding the bills for political gain and for keeping the state budget from being completed.

    As the days roll by, the pressure should start to increase to release these budgets. If the press is already pointing out the fact that the Senate has not completed its job, that fact should be pointed out in nearly every story from now on. One would hope, anyway. So, thank you AP. Keep up the good work.

  • Mike Bishop is speaking from both sides of his mouth. On one hand, he calls his job "done" with the passage of the K-12 budget, blowing the dog whistle to the rabid right that demands "more tax cuts" of his candidacy for future office:

    "This proposal puts $100 million back into our schools, completes a state budget that forces government to live within its means, and finally brings tax relief to more than 100,000 Michigan job providers," Senate Majority Leader Mike Bishop (R-Rochester) said in a statement.

    And he also said with the action the two houses completed work on the 2009-10 budget.

    On the other, he goes concern troll on the AP as he tries to dodge responsibility on turning in the remaining budgets. "If we don't act carefully in how we solve this year's crisis, we'll make next year's crisis that much worse", Bishop claimed.

    So, which is it? Are they done, or not? If so, why not turn in the remaining budgets? As Mike Prusi said, "It shows a lack of confidence in the work they've done already, that they're afraid to send them on and stand up and defend them or override the vetoes, if it's that important to them." All this makes the AP scenario above much more likely - this is merely another political game of chicken, perhaps designed to bring about another shut down.

  • And about that "living within its means" statement from Bishop, the non-partisan Citizens Research Council of Michigan is the first off the block to pick up on something that should have been glaringly obvious to everyone involved: Eliminating the surcharge on the MBT without replacing the revenue is going to further exacerbate our structural deficit. MI-Tech News brings us the entire story originally reported in Gongwer:

    A plan by Senate Republicans to create $300 million in new revenue for the current fiscal year in exchange for phasing out the surcharge on the Michigan Business Tax will add to the state's structural deficit in the long run, said Craig Thiel with the Citizens Research Council.

    The proposal calls for delaying a scheduled increase in the Earned Income Tax Credit and curbing the state's film production tax credit.

    The plan (HB 4514, SB 838) brings in less than the surcharge it is intended to replace, Mr. Thiel said, and that will be compounded in 2012, the last year of the surcharge, with scheduled reductions in the income tax rate.

    "It's really intended to raise revenues in a net increase in one year only," Mr. Thiel said. "That's to satisfy a cut in the school aid budget that wasn't palatable."

    Assuming flat revenue from the new source, which Mr. Thiel said is a reasonable expectation, the state would be short $200 million in 2012 on top of any losses from the income tax rate cut.

    "You basically made the problem worse," he said of the plan.

    Republicans and fiscal responsibility shall never meet. Didn't Reagan and Bush teach you that lesson?

  • Doesn't matter, none of this has passed yet. The Legislature may call K-12 "done", but the freeze on the EITC did not get immediate effect in the Senate, and the MBT cut and the film credit reduction has not moved through the House. There is also the little matter of $100 million in unspecified revenue out there, although Dillon apparently told Elsenheimer that would be taken care of with "more cuts", even though he is claiming to the press that House Dems will seek more revenue. How they can call it a "budget" without specified funding is well beyond me.

    Speaker Andy Dillon doesn't seem interested in this anymore. He's already indicated that he has mentally checked out and is moving on.

    House Speaker Andy Dillon said today he wants to “plow into tax reform and health care reform” next week, now that the new state budget is nearly finished.

    “We have to move quickly. After February, it’s all over, it’s campaign season,” said Dillon, D-Redford Township.

    February? If that is the case, it's over now. The Legislature takes two weeks off in November, and usually takes their 6 week or so Xmas break around the second week of December. They don't come back until late January. So, while Dillon claims that he is going to work on health care and tax reform next, he has maybe 20 or so working days before "February" to accomplish it - meaning it won't get accomplished. And most representatives are already moving on, like my Rep. Robert Dean who has announced he is exploring a run for Hardiman's seat. He isn't alone in that, as other reps are making similar noises.

    The House Democrats held splashy news conferences last week to trot out a new program called the "Michigan Future Plan" that is supposed to take care of all the problem areas in the current budget such as Medicaid, college scholarships, libraries, and public safety. Had they done this last February when it was apparent that we were trapped in this avalanche, it might have carried more weight. Now, it looks like a cover-up for their failure to act this entire year. Kathy Barks Hoffman rightly called "bullshit" on the whole thing in this must-read AP analysis.

    If they can sell it, great. Go for it. They promised that they would fight for these key areas in this budget - if they really are serious about that, then this week they should step up and call out Bishop to release the completed budgets, and also move to fix the problems outlined above.

    If they don't, then you know that they have punted on this budget, and intend on using it as a campaign slogan for 2010. Who knows, maybe "We'll fix it next time!" will fly with the public. Stranger things have happened.