Office of Legislative Affairs

Legislative Update

For the week of November 2, 2009 . . .

BUDGET SAGA CONTINUES - Last week began with the Governor ramping up her efforts to drum up support among the populace-and pressure on the legislature-for increased revenues and ended with Ms. Granholm signing the last six full-year budgets.  During the interim, Republicans remained adamant in their opposition to any tax increase, the Speaker was blind-sided on his efforts to generate more revenue, rumors of a possible veto led Michigan State University to say if such a veto was enacted the University would be forced to close a decades-old agricultural program impacting 3,000 workers, the strain on the Bishop/Dillon relationship increased, the Governor began holding face-to-face meetings with individual Republican senators seeking support for a tax increase, efforts to override the Governor's School Aid budget vetoes intensified and the bipartisan Freshman Caucus in the House sent a letter to the Governor and Quadrant members imploring them to complete the budget in a timely fashion.  Other than those small issues, it was a great week for Michigan's budget and political statement.

Having vetoed some $54 million in funding from the School Aid budget that was earmarked for selected districts and ordered a further proration reduction in per pupil monies, Ms. Granholm began last week by meeting with school superintendent in Rochester-the home city of Senate Majority Leader Mike Bishop.  While reportedly calling for a long-term solution to school funding, Ms. Granholm told the superintendents that a short-term fix was essential to keeping the system whole and urged the superintendents to contact their respective legislators in support of additional revenues.  Mr. Bishop-who also attended the meeting and took offense to the Governor bringing her grassroots effort to his hometown community-called the Governor's effort ineffective and the meeting unproductive.  While agreeing the school officials were upset over the reductions and were looking for "a real solution" to school funding, Mr. Bishop said none of those in attendance told him to "do what the governor said" to generate more revenue.

Tuesday saw the Governor initiate one-on-one meetings with individual Republican senators while she, Mr. Bishop and Speaker Andy Dillon traded barbs over the budget.  The Governor again argued residents want a compromise on the budget while Mr. Bishop charged the Governor's efforts to push a tax increase ignores the Senate Republican revenue plan.  Mr. Dillon said the Senate plan-a program Ms. Granholm and House Democrats have dismissed on the grounds it would actually increase the deficit-would, at best, generate $10 million in new revenue once the plan's loss of matching federal dollars is factored in.  Ms. Granholm called upon legislators to develop a "grand bargain" in an effort to avoid a replay of the current fiscal year's budget drama while restructuring the state's tax system to remain competitive and providing required revenues for state programs.  She also argued neither side could have a "my way or the highway" approach to such a difficult budget.  Mr. Bishop responded by saying, "We've passed over revenues to the House," while noting if the Governor seeks additional revenue "she's going to have to take what she gets." As to the success of the one-on-one meetings, the involved legislators said Ms. Granholm was "charming and concerned" but they reiterated she had to accept the approved spending plan "delivered within the confines of the decisions of the legislature," and said they had not committed to support further revenue increases.

Wednesday was a watershed day in the budget process.  Having just told the media he expected the budget process would linger on for a few more weeks while varied program cuts were restored-and while admitting he did not know if the process would result in restoration bit by bit or all in one fell swoop, Speaker Dillon was stunned to learn the Senate had overwhelmingly rejected a corner stone of his revenue enhancement plan.  In a surprise move which infuriated Senate Democrats, the Senate discharged the House proposal creating a physicians' Quality Assurance Assessment Program (QAAP) from committee and, with minimal support, quashed the measure on a vote of 4-32.  The QAAP plan had been pushed by supporters on the grounds it would free additional federal dollars for the Medicaid program with most of the taxed physicians actually regaining their tax payments and more through increased Medicaid payments.  The tax plan was also the vanguard of Speaker Dillon's plan to restore funding to varied state programs once a final budget had been approved-an approach which the Governor and many of his caucus colleagues questioned from the onset concerned that Senate Republicans would not support tax increases once a budget based on reductions and stimulus monies was in place.

The Senate's action on the QAAP left Mr. Dillon at a loss regarding what actions House Democrats would now take.  The vote also seemed to isolate him in the budget and political process while intensifying the growing strain on his working relationship with Mr. Bishop.  Mr. Dillon said he was "not happy" with Mr. Bishop's actions, noted the rejection would not help their relationship and charged Mr. Bishop had agreed the House plan would "get a good faith effort out of the Senate" which he said the discharge and rejection did not provide.  He also argued the rejection had now created a "serious problem" in the Community Health budget which, if left uncorrected, would lead to nursing home closures and kids being "thrown off of Medicaid." Mr. Bishop argued the plan had been deliberated in committee with the panel taking four hours of testimony on the issue just last week.  He also said the action demonstrated members wanted to get some budget issues off the plate while the final vote demonstrated support for the House plan was lacking on either side of the aisle.  Further, Mr. Bishop said the vote would not impact his working relationship with Mr. Dillon while reiterating that he had always said he did "not have the votes to pass tax increases" in the Senate.

Wednesday also saw the Senate Appropriations Committee take the initial step in officially encouraging the House to override the Governor's veto of the more than $50 million in hold-harmless funds included in the School Aid budget for select school districts.  Any override effort must begin in the House as the legislation in question was initiated in that chamber, but Senate Resolution 88 calls upon the House to begin that process.  Underscoring the significance of the veto, the vote to report the resolution was 10-5 with two Democrats supporting the override call-with the Minority Caucus members arguing their support for the resolution should not be viewed as an attack on the Governor.  Democrats also argued the Senate revenue plan would not provide the monies needed to restore the School Aid monies and expressed hope that realization would bring the parties to the table to properly resolve the issue.

Thursday found House members favoring a veto override-a number insufficient to achieve that goal-opting to offer a supplemental budget proposal to restore the hold harmless funding struck from the School Aid budget by the Governor's veto.  The measure, sponsored by Representative Marc Corriveau, was introduced with 40 co-sponsors including several members who do not represent impacted districts.  Supporters argued the reduction, coming five months into the schools' fiscal year, is unfair and said the identification of a funding source would be part of the overall debate on the measure.  Supporters said they hoped the Appropriation Committee would hold a hearing on the measure this week.

GOVERNOR'S VETOES - Friday marked the end of long week with the Governor hosting a media only press conference call on her vetoes and the release of her veto letters.  The highlight of the day's vetoes was a $7.1 million veto of the state fair for next year.  She also vetoed dozens of special earmarks included in the DCH, DHS, General Government and DELEG budgets.  The Governor did not veto the funding allocated for Michigan State University's Agricultural Experiment Station and Cooperative Extension Service as rumored earlier in the week.

SURVEY FINDS SUPPORT FOR TERM LIMIT CHANGE - Although the vast majority of voters favor term limits for state officials, a new study released by Michigan State University Institute for Public Policy and Social Research found voters would consider changes in those limits.  According to the survey's results, of the 1,036 individuals interviewed nearly 76 percent said they support term limits-although the majority of those individuals did not know what the current term limit is for a member of the House.  The study also found that nearly 62 percent would favor ending the lifetime ban on public service once an individual had served the maximum time in office allowed by term limits if the individual office holder took a four-year hiatus from public life once he or she had completed the 14 years now allowed in office.  In addition, nearly 54 percent said they would support a change allowing a member to serve the 14 year maximum in a single legislative chamber or in any combination of years between the two bodies.  The authors of the survey also found that support for the suggested changes was fairly steady across party lines, with Democrats being the most supportive of the suggested changes, followed by Independents and then Republicans although a strong majority in each political bloc supported the options.  In something of a surprise, the survey found that nearly 82 percent of those surveyed favored the creation of a nonpartisan commission to draw legislative district lines-a number which the authors called "astounding."  Responding to that option, 75.7 percent of the Republican participants, 83 percent of the Democratic participants and 90.5 percent of the Independent participants favored the non-political commission approach.  The survey was conducted during May and June of this year and has a 3 percent margin of error.

METRO DETROIT'S UNEMPLOYMENT LEADS NATION - According to data released by the U.S. Bureau of Labor Statistics, the 7.3 percent unemployment rate in southeastern Michigan for September was the nation's highest among the country's large metropolitan areas.  Of the nation's 49 communities having a population of 1 million or more, the Detroit-Warren-Livonia region also posted the nation's largest increase in unemployment rate for the year with a jump of 8.4 percent.  Overall, California's El Centro market posted the nation's highest metropolitan unemployment rate, posting a dismal 30.1 percent, while 117 markets posted rates in excess of 10 percent-an increase of 107 communities over the same time last year.  The Bureau also reported that of the 13 regional markets recording an unemployment rate of 15 percent or greater five were in California and three were located in Michigan.  Broken into smaller markets, the Bureau's unemployment data found the Detroit-Livonia-Dearborn market at 18.6 percent and the Warren-Troy-Farmington Hills market at 16.6 percent also led the nation.

REVENUE LOSSES NATIONWIDE SAYS REPORT - While Michigan's revenue losses have caused havoc within the budget process, a new report shows the state is not alone in dealing with reduced revenues.  According to a report issued by the New York Institute, with the exception of Vermont, every state in the nation experienced a decline in revenues during the second quarter of 2009.  The report's authors noted the aggregate revenue loss-some 16.6 percent below the second quarter of 2008-was the worst revenue collapse since the compilation of data began in 1962.  The report noted Michigan experienced a 7-percent revenue decline in the quarter, which was neither the worst showing in the Great Lakes Region-Wisconsin led with a 24.2 percent drop-nor in the nation where Alaska led with a staggering decline of 86.5 percent from the prior year.  The New York Institute's study echoes that of the National Conference of State Legislatures which found most states reporting revenue declines as they began their 2009-10 Fiscal Year.

ODDS AND ENDS - With the state books reflecting $2.5 billion in uncollected taxes owed-and estimates that nearly half that amount is collectable-the House Appropriations Subcommittee on General Government has begun holding hearings on a tax amnesty program designed to recover the owed monies.....according to the weekly analysis issued by the Department of Community Health, reported cases of influenza and "flu-like" illness have exploded during the past week with "swine flu" cases rising to 539 cases for the week-a more than four-fold increase over the 92 cases reported in the prior week-while the 458 reported cases of influenza have more than doubled the prior week's total.....late Thursday, the Department of Community Health announced Michigan has access to 635,000 doses of H1N1 (Swine) flu vaccine, but lacked information listing how the vaccine had been distributed to health care workers around the state..... Representative Mike Simpson announced his recent extended absence from session has been due to treatment for a rare blood disorder diagnosed as light-chain deposition.....Representative Fred Miller has introduced legislation aimed at creating a nonpartisan commission to create a plan to consolidate school districts.....saying the turbine is expected to last three decades, the Department of Environmental Quality says a windmill installed at its Bay City office will create energy savings sufficient to pay for the project in less than 25 years.....while they have approved petition language poised for circulation for signatures, supporters of expanding gaming activities at the state's horse race tracks in an effort to save the industry have sent the Governor and lawmakers letters urging them to consider the constitutional amendment since they could place the question before voters more quickly than their planned petition drive.