Politics & Government

 Tomorrow, Governor Rick Snyder will present to the legislature his proposed budget for the next fiscal year. The state is currently running a deficit of close to two billion dollars.

The governor also wants to make changes to the business tax system that would further add to that deficit. Keep in mind that by law, a balanced budget has to be enacted by September 30th.

Dale Kildee won his first term in the United States Congress in 1976. Next year, he plans to run again. The Associated Press reports Kildee's spokesman says the octogenarian politician has always planned to run for another term. 

Each Wednesday, Morning Edition Host Christina Shockley sits down with Michigan Radio’s Senior Political Analyst Jack Lessenberry to get an update on state politics. This week, the focus is on Governor Snyder’s budget proposal and what cuts he might suggest.  

The details of the United States and Michigan budget cuts are beginning to leak out.  The United States Congress is trying to come together on a plan to cut a huge amount of spending. Governor Rick Snyder will be delivering his budget proposal for next year on Thursday.

One area of debate is how the Environmental Protection Agency can regulate greenhouse gas emissions. A new statewide poll shows voters in Michigan would support these rules, but Republicans in the US Congress are moving against them this week.

Al Quinlan conducted the poll funded by the Energy Foundation, a pro-renewable energy group.

"We asked people simply whether they favor or oppose the EPA regulating these emissions the results were 64% favor, 27% oppose. And there was broad based support across partisan lines."

Michigan Congressman Fred Upton is a leading opponent of EPA regulation of greenhouse gasses.

Sarah Alvarez-Michigan Radio Newsroom

Report: "Fireworks" over part of Snyder's Budget Plan

Chris Christoff, the Lansing Bureau Chief for the Detroit Free Press, says Governor Snyder plans to "eliminate Michigan's generous income tax exemptions for retiree pensions and IRA withdrawals as part of his budget plan" to be released tomorrow. Christoff wrote "a source familiar with the plan" says doing away with the tax exemption could generate more than $1 billion in revenue. From the Free Press:

Many expect Gov. Rick Snyder to set off political fireworks Thursday when he unveils a budget and tax revision plan he says will be simple, fair and efficient...Perhaps nothing will boom louder than a plan to tax pensions and other retirement income the same as all other income -- at 4.35%.

A Snyder spokesperson would not comment on the "speculation." Doug Pratt, a spokesman for the Michigan Education Association, told the Freep that Snyder will "will hear from a lot of retired employees in this state that are not going to be happy with that one." And an aide to republican State Senator Jack Brandenburg said the plan is "a nonstarter."

The Associated Press writes that Michigan's benefits for retirees are one of the most generous in the country:

The Washington-based Center for Budget and Policy Priorities says Michigan's benefits are twice as generous as those of second-place Kentucky. A retired couple in Michigan can have more than $100,000 of income without having to pay any state income tax...

Political pressure in the past has made it hard to reduce senior tax breaks to help the state's bottom line, even as Michigan steadily loses more to the tax breaks as the number of older taxpayers grows.

Governor Snyder will release his budget plan tomorrow.

Prison staff fear privatization is coming

Almost everything in the state is on the chopping block. There has been talk of privatizing parts of the prison system as a way to save money. The Associated Press says the Governor's budget plan will look at cutting around 10 to 20% out of the state's corrections budget.

State workers in prisons fear that will mean privitization. The Associated Press spoke with United Auto Workers Local 6000 spokesman Ray Holman:

The Prison support staff fear the governor may outsource their jobs to private companies to save money.

"If you're cutting $400 million ... you're going to have to go after something," said Holman, whose union represents tens of thousands of state workers, including prison support staff. "We stand to take a substantial hit." 

Former GM exec may return as advisor

The Detroit News says former GM executive Bob Lutz may return to the company as an advisor. From the Detroit News:

General Motors Co. has been in talks with former product chief Robert Lutz about bringing him back as a paid consultant, The Detroit News has learned.

The details were unclear Tuesday, but the 79-year-old Lutz continues to have a close relationship with GM, and the two have been in discussions about formalizing an advisory role, according to sources familiar with the discussions.

Lutz was known as a plain speaking executive at GM who was skeptical of the commercial appeal of electric cars and hybrids. As the Guardian reported when he retired in 2010, Lutz once described global warming "as a total crock of shit."

The Guardian writes that Lutz "predicted the internal combustion engine would reign supreme for at least a further decade, and that it would be "years and years" before alternatives make up even a tenth of the market."

Update 4:23 p.m.:

Rick Pluta, from the Michigan Public Radio Network, says the House will likely vote on a repeal of the Item Pricing Law tomorrow. Pluta spoke with the sponsor of the bill, State Rep. Lisa Lyons. She says individual price tags wouldn't be required, but stores would be required to prominently post prices so consumers know how much things cost:

"It does eliminate the antiquated requirement that every item be priced which has been in effect since before I was born, but it also upholds and provides for consumer protections that Michigan shoppers have come to know, expect and they deserve," said Lyons.

2:06 p.m.

The Michigan legislature is a step closer in repealing the state's Item Pricing Law.

The law requires that most items on store shelves carry an individual price tag.

The Lansing Bureau of the Detroit Free Press reports:

Legislation to rescind the requirement that almost all retail goods sold in Michigan be individually priced cleared its first hurdle in the state House this morning, winning approval in the Commerce Committee on a 16-3 vote. The measure was approved after its sponsors agreed to an amendment that will require retailers to clearly display prices in close proximity to the item for sale.

Governor Syder has said that a repeal of the law will send a signal that Michigan is a business-friendly state. Retailers say the law is antiquated and drives up prices.

Rick Pluta reported for the Michigan Public Radio Network that

The last effort to repeal the law was five years ago, but it failed under the threat of a veto by Governor Jennifer Granholm.

Proponents of the law say the individual price tags protect consumers from being overcharged.

Michigan Attorney General Bill Schuette says the state should save money in the corrections budget by cutting the costs of incarceration - not by closing more prisons or releasing more inmates.

Schuette says he hopes that's the strategy Governor Rick Snyder will display when he unveils his budget proposal on Thursday.

Schuette says he advised the governor to focus on reducing the cost-per-inmate by bidding out more prison services:

Update 3:50 p.m.:

The city of Flint did not get approval today from the state for a $20 million bond.   The city needs the money to pay its bills.

The state Treasurer’s office asked the State Administrative Board to table the bond request, which it was expected to approve. The Treasurer’s office is concerned that the city doesn’t have a plan to deal with its long-term debt.   

Flint Mayor Dayne Walling is optimistic the city will get some help from the state. 

“I’m confident the city of Flint and the state Treasurer’s office will work together on a short-term, if not a long-term solution here in the next few weeks.”

Flint faces a multi-million dollar budget deficit.   The city has laid off police officers and dozens of other employees and has reached pay cuts with other city unions. But it still might have trouble making payroll in the coming months. 

Update 2:50 p.m.:

The State Administration Board put off a decision on the city's budget plan this morning. The city wants to borrow money in the form of $20 million in bonds to cover its budget deficit.

The Flint Journal has an update from Flint City Councilman Josua Freeman:

By the end of this month or next month, the city will only have about $500,000 in cash on hand, Freeman said. That's not nearly enough money to meet the payroll expenses of $1.5 million to $2 million every two weeks, he added.

"If nothing changes and we don’t improve our cash flow, we're not going to have enough money to operate," Freeman said.

If the city cannot make payroll, a state takeover or Chapter 9 bankruptcy might be next.

12:42 p.m.

The city of Flint wants to issue bonds to cover it's $17 million budget deficit, but state officials have yet to green light that plan.

The State Administration Board was scheduled to vote on that plan today, but it appears plans have changed.

The Flint Journal is reporting the Board voted to remove the city's request from its agenda today. The Journal reports that led to a cancelation of a Flint City Council meeting scheduled for tomorrow:

Tomorrow's City Council meeting to discuss a $20 million bond request from the state has been canceled.

The meeting, which was scheduled for 5:30 p.m. at City Hall, was canceled after The State Administration Board voted to remove the city's request from its meeting agenda this morning...That move came at the request of the state treasurer's office...City Council President Jackie Poplar said she was made aware of the situation and had no comment until she receives further information.