LSJ Blogs: Capitol Journal by Scott Davis

A whiff of reform in the air....

With this year’s budget still in flux – a full month after the fiscal year started – Senate Republicans are pushing for reforms to deal with an expected crippling shortfall next year.

Senate Majority Leader Mike Bishop said Thursday that Senate Republicans are preparing a package of bills to change how state and local government operate in an effort to save money, according to Gongwer News.

For now, he’s not offering details, but he said the ideas are drawn from several areas, including the Michigan Chamber of Commerce and the Mackinac Center for Public Policy.

Don’t expect tax increases to be a part of any reform package. Just this week, Senate Republicans shot down a proposed physician’s tax.

"Many of the savings are at the state level, but many of them are at the local level too, so we need to figure out ways to be more efficient with the money that we have," he said

Developers granted more time on bonds for police building

Developers of a new Michigan State Police headquarters in downtown Lansing have a little more breathing room to issue bonds.

 

Joel Ferguson and Gary Granger, the developers, are now working out a deal to sell the building to the state, but if a glitch arises, the state Strategic Fund Board agreed to give the developers until February 2011 to issue up $53 million in bonds for the project, if needed, Gongwer News reported.

 

Developers say the building is complete and they now are negotiating a deal in which the state would first lease it and then buy it by January 2011. A state police budget authorizing negotiations is now awaiting approval by Gov. Jennifer Granholm.

Hunkering down and lessons learned

Gov. Jennifer Granholm was featured recently in “Time,” responding to 10 reader inquiries on subjects ranging from whether Detroit will rebound (“Absolutely!”) to what’s on her iPod (Aretha Franklin, Bruce Springsteen.)

But the most interesting response came to the question about her plans when her term expires next year. She spoke of her leadership during a sustained crisis and lessons learned.

“The biggest lesson is that you have to play offense,” she said. “You can't just hunker down. You have to continue to lead and push forward despite all the challenges, and you have to have a skin as thick as a rhinoceros's.”

Ironically, that’s been the biggest slam against her in recent weeks; that she did not play offense as the budget was taking shape in the Legislature in September and failed to speak up publicly about what she insisted in a budget. More recently, she has taken to the bully pulpit and has vetoed some school funding while flexing her muscle.

But some critics have maintained that if she had flexed her muscle earlier, a budget crisis might have been averted.

Buy good walking shoes for those kids....

In a budget-cutting frenzy, state lawmakers are putting Michigan school districts in quite a quandary.

The Legislature recently passed a K-12 budget that slashed $1.4 million for all school bus inspections by state police – a budget signed into law by Gov. Jennifer Granholm. Problem is, the inspections are required annually by state law, and school districts legally cannot operate their buses without them.

There currently is no proposed legislation to deal with this Catch-22, and naturally school district transportation heads are scratching their heads, wondering whether they will have to ground vehicles when their buses are up for inspection renewal.

Remember those stories from Grandpa about walking three miles to school in the snow? Those days may be coming back.

Study: No savings in Dillon healthcare plan

Forget that national healthcare rumpus. Health insurance reform wars, Michigan style, are in full swing.

For months, House Speaker Andy Dillon has preached the benefits of his proposal to place all public employees in Michigan in the same insurance pool, claiming it will save an estimated $900 annually. But a newly released study claims it will not save any money at all, Gongwer News reported.

The analysis was done by Public Policy Associates for Citizens for Accountability in Reform, which is an umbrella group of several labor unions, including Michigan Education Special Services Association. Unions have opposed the plan.

Douglas Drake, senior policy consultant for Public Policy Associates, said Dillon’s proposed savings are “illusionary” because they rely on administrative savings at the local level and because the economies of scale the pool seeks have mostly already been realized.

The study found the state will likely need to expend $295 million to $370 million to run the pool, which was based on comparisons from the commercial insurance market and the experience of other states studied. In the first few months, the state will need $400 million to $500 million to help cover initial claims. The report also questions the legality of requiring universities to be in the pool since they have constitutionally protected autonomy from state government.

Point to employee unions. Serve goes to Dillon.

New Hollywood genre: Bill hostage thriller

Someone please, send in the negotiators.

In a move viewed as unprecedented, the state Senate is holding six final budget bills hostage in the chamber, refusing to send them to Gov. Jennifer Granholm for approval until she tells Senate leaders whether she’ll veto or adopt the measures.

It’s only the latest chapter in a budget drama that resulted in a missed deadline Sept. 30, a two-hour government shutdown and a temporary 30-day budget that has resulted in deep cuts in funding for agencies.

“If we don’t act carefully, in how we solve this year’s crisis, we’ll make next year’s crisis that much worse,” said Senate Majority Leader Mike Bishop, who has sent unofficial copies of the six bills to Granholm so that she can review them.

Meanwhile, Granholm has refused to say how she’ll proceed, but has stated repeatedly that she is not happy about deep cuts in social spending and other programs. Senate Republicans are concerned that she will proceed with proposals to raise revenues to fund those programs.

In short, it appears to be an ole’ fashioned Hollywood-style standoff, with Senate Republicans apparently trying to run down the clock until the next budget deadline at the end of the month.

Some are hoping the conflict ends early, the credits roll and the drama fades to black.

The budget abyss widens

If you were hoping that the revenue gods up above will cut Michigan a break, your prayers were in vain.

The House Fiscal Agency reported this week that the state collected $130 million less in revenues through September than officials had predicted back in May. That means whatever plans lawmakers are developing this month to deal with a $2.8 billion shortfall in this budget could be partly scuttled by an even bigger budget hole.

And with record high unemployment and soaring home foreclosures in Michigan, don’t expect revenue dollars to start raining from the sky anytime soon.

Dance marathon: The weary waltz continues...

For all the supposed urgency in passing a budget for 2009-10, things seem to be moving at a snail’s pace at the Capitol.

On Tuesday, the Democratic-controlled House passed revenue proposals that would increase fees on doctors and stop an inflationary increase in the personal income tax exemption – part of a plan to address a gaping $2.8 billion deficit projected for the fiscal year that began last week.

Already, the Legislature has missed an Oct. 1 deadline to submit a balanced budget to Gov. Jennifer Granholm, and most state departments are now operating from a slimmed-down temporary 30-day budget.

Regardless, Senate Majority Leader Mike Bishop has basically declared the House proposals dead on arrival, saying he doubts they will garner any Republican support – and not even solid support among Senate Democrats. To be fair, lawmakers also now are working on a continuation budget for K-12 to help schools hobble along for the next few weeks.

Meanwhile, the deadline of Oct. 31 to approve a new budget is approaching.

 

Spartans! (the other ones) Prepare for glory!

No one can accuse State Rep. Rick Jones, R-Grand Ledge, of not having a flair for the dramatic.

To whip up the Republican minority in the House to block any Democratic tax proposal Tuesday for the 2009-10 budget, placed a “300” Spartan battle helmet on his desk on the House floor as a kind of rallying cry.

The Spartans were immortalized in the 2006 movie, “300,” as the small Grecian army who held the line against massive Persian forces in the fifth century B.C.

House Republicans did hold the line, but in the end, math is math. The House, which has 67 Democrats and 43 Republicans, passed two tax proposals, mostly along party lines. One proposal would increase fees on doctors and another would stop an inflationary increase in the personal income tax exemption.

Both proposals now go to the Republican-controlled Senate for consideration.

Other tax proposals are expected to be considered in the House today and later this week. No doubt, that battle helmet will stay on Jones' desk.

Oh George Romney, where have you gone to?

 

The hits keep coming….

Make of it what you will, but a newly released poll suggests that more than half of Michigan voters say that state politicians have less integrity and work less hard than politicians of 40 or 50 years ago.

The poll likely captures the dismay among some in the public at last week’s failure by the State Legislature to adopt a 2009-10 budget, resulting in a partial shutdown of state government. Part of it also may reflect the feeling among some, bordering on cliché, that “things were better in the old days.”

The poll was commissioned by “Inside Michigan Politics” and conducted by Marketing Resource Group. Inc.