Friday, February 12, 2010

House Democrats Already Rolling Over For Republicans on the Budget

We need to face up to facts here, and the facts are - the Democrats, as a party, are cowards. We've seen it in Washington on health care and the stimulus, we've seen it in Lansing ever since we won back the House in '06. Sure, there are individual Democrats who will fight for the things that matter to the people, to our state, to our country, but as a whole, leadership in chamber, such as a Harry Reid or an Andy Dillon, will bow to the wishes of the Republicans every time. And guess what - it's the Democratic lawmakers themselves who put people like that in leadership positions, and leave them to reflect on the party as a whole.

They refuse to start an argument from a position of strength, instead put all their cards (and that's us) on the table, and let popular legislation get watered down from there. As a result, since the blue wave swept them into power in '06 and especially '08, half-measures have accomplished very little, and the Republicans are now using that weakness against them. So it goes in DC, and so it goes in Lansing - and the polls are starting to reflect the damage. You've seen it in special elections, you've heard it from your Democratic friends and neighbors, who are now saying that they won't even bother to vote this November - and it's not because the Democrats aren't being "bipartisan" enough. You know the real reason, even though the media does its best to convince you otherwise to serve their ratings. So be it.

Yesterday, Governor Granholm laid out a tough but fair budget that protects schools, cities, public safety, and health care - and it delivers not only the elimination of the MBT surcharge, but an overall tax cut for business as well. It follows the best practice of what all the civic and business experts have said we need to do to keep out state competitive in this economy. A few highlights:

• College students would get their $4,000 Promise grants, but they'd have to find a job and stay in Michigan at least a year after they graduate, then receive the money through an income tax credit.

• Business that pay taxes would see a cut, but they'd have to wait until 2011 and it wouldn't be fully phased in until 2013.

• Doctors are being asked to shell out a 3 percent tax on the income from their practice, but they'd get higher reimbursement rates for treating Medicaid patients.

• Schoolchildren would not see further classroom cuts.

• Motorists will see the same number of State Police troopers on the highways.

• And municipalities may not have to take another reduction in revenue sharing money to pay police and firefighters.

The budget is revenue neutral. How can that be with an expansion on service taxes? People forget that the 2007 increase in the income tax will sunset in 2012.

State Treasurer Robert Kleine estimates that for a household at an average income of $50,000, the combination of taxing services and a lower rate would mean a net increase of $140 annually. That would be offset starting in 2012, he said, when the state income tax rate will gradually drop back to 3.9 percent from the current 4.35-percent rate.

The Detroit Free Press editorial staff has recognized all the benefits of this budget, and offered praise this morning.

Gov. Jennifer Granholm's proposal for the next spending year, which begins Oct. 1, is refreshingly straightforward, broad-based and free of gimmicks, while firmly rooted in the fact that the 21st Century economy runs increasingly on services that must be included in the tax base.


Granholm has budgeted virtually all the new revenue for shoring up schools. That's essential to keep education on an even keel. Combined with potential savings from reforms she proposed earlier, including a strong early retirement incentive, schools might even come out slightly ahead next year. That's significant, considering that roughly 100 districts are expected to end this school year in deficit and virtually all districts have had to make cuts.

The mix of tax and spending reforms also gives Michigan a good shot at a balanced budget next year and puts the state much closer to having balanced budgets well into the future. Granholm expressed confidence, for example, that the School Aid Fund will come into long-term structural balance with the changes she proposes.

So now it behooves all the interest groups involved to get real about negotiating this through. Business associations and centrist think tanks have long pushed the idea of lowering the sales tax rate while broadening it to services. They have to spread out and give lawmakers the support they'll need to vote yes.

There's a little problem with that already. "Lawmakers", meaning, the Democratic leadership in the House, are already mouthing Republican phrases and indicating that they will bow to the wishes of the Senate. Here is Speaker Andy Dillon, who once again sounds like he is reading straight from the Senate Republican talking points:

Even House Speaker Andy Dillon, D-Redford Township, snubbed Granholm's call for a broader sales tax that includes services and entertainment tickets to generate an additional $554 million for schools -- an earmark Granholm hopes is a selling point.

"It's time, first and foremost, to do the hard work of reforming and streamlining state government," Dillon said. "Tax increases should be a last resort, not a first option.

This, coming from the guy who promised us tax reform in the beginning of 2009, and has yet to deliver that plan. This, coming from the guy who promised that he would fight for schools, public safety, health care, the Promise Scholarship all last year, only to pass a Republican budget using Republican votes at the last minute - and then he immediately turned around and complained about what he had done. This, coming from the guy who has been working on his state employee health care plan since last July, and still hasn't delivered that, either. It appears that Speaker Dillon is stalling on all these things to serve his own self-interests and his run for governor. You can wait another year, can't you Michigan?

And then we turn to his sidekick George Cushingberry, who gives up before the battle has started. Nothing like signaling surrender right off the bat.

But Senate Republicans will decide whether the proposal moves ahead, said Rep. George Cushingberry, D-Detroit, chairman of the House Appropriations Committee.

"The Democrats will vote for whatever we can get through the Senate," Cushingberry said. "Right now, they have the chips on tax increases."

Only because Democrats won't stand up and fight first for the things that matter. If they are going to let the "Senate Republicans decide" everything, why bother having a Democratic House? That is a question that really needs to be answered at this point.

Have the House Democrats passed some good legislation? Yes they have. And it goes absolutely nowhere because they never make the Republicans pay for their obstruction. Once every six months or so they meekly put out a press release calling for the Senate to act on something, but they drop it soon after. Matter of fact, if it weren't for a flurry of bills that were moved at at the end of December, this Legislature would have produced the lowest number of bills passed in the decade in 2009 - and that came at a time when we were in the middle of the worst economic conditions since the Great Depression. So, how is all that "bipartisan" effort extended by the House working out for us?

And, as far as those "special interest" groups go - even the vaunted, blog-spamming Business Leaders of Michigan are complaining because this budget doesn't serve business interests only. Their true colors are flying now.

Business Leaders for Michigan, the CEO group that supports the outlines of the tax plan, reiterated Thursday that any revenue generated by higher sales taxes should be confined to business tax relief. “We believe any tax restructuring should be revenue neutral and we don’t believe the governor’s proposal goes far enough, fast enough to make us competitive,” the group said in a statement.

Once again, we need to repeat that this budget is revenue neutral. It eliminates the MBT surcharge, and provides a business tax cut. Greedy business owners want to keep it all to themselves though. We don't even need to get into what the Michigan Chamber of Commerce had to say.

Maybe the governor made a mistake trying for the best possible solution to our fiscal instability. Like Obama, she insists on these smart, fair-minded approaches to our problems, and her own party immediately undermines it because they are too afraid for their own jobs. Or something. Who knows why they won't act on their own platform and campaign promises, but they certainly are losing the trust of the voters who worked so hard to put them in the majority.

Maybe she should have gone straight to a graduated income tax ballot proposal instead. That is the most popular solution to our problems, and if it makes it to a vote, chances are it would pass easily. If this Legislature insists on following the lead of unpopular extremist Republican solutions that serve the business community only this year - let's work to get it on the ballot.

And then let's work to find Democrats who are strong enough to stand up and fight for what the people want. As it stands, this group has nine months to turn the message around, but you can tell already that they have no intention of doing the right thing - and prolonging this budget fight deeper into the election year certainly won't make it any better.

The governor proposes, and the legislature disposes. What they finally end up disposing will make all the difference in the world this November.