Tagged: state legislature

LANSING, Mich. (AP) - State economists agree that Michigan is expected to take in $429 million more this fiscal year than they forecast in January.

But their predictions for the next budget year have dropped as deep business tax cuts take effect.

Lawmakers will be able to use some of this year's surplus in the next budget year, and lawmakers are likely to consider putting some of the money toward easing deep cuts for public schools in 2011-12.

Without the business tax cut, the state would have gotten nearly $500 million more in the next budget year than state economists had predicted in January. But that will largely disappear as business revenue declines.

The heads of the Treasury Department and House and Senate fiscal agencies agreed on the revenue figures Monday.

Governor Rick Snyder had to compromise along the way-- but approval of his tax reform package hands the governor a significant legislative victory. And, signing the bill will allow the governor to retire the signature issue of his election campaign.

Governor Snyder campaigned heavily on scrapping the complex and unpopular Michigan Business Tax and replacing it with a corporate profits tax. He took office saying fulfilling that promise would be part of an agenda of “relentless positive action.”

“So I believe we’re on a positive path to make that happen. It’s that old ‘relentless positive action.’ I think it’s a little bit contagious and I hope it is.”

His legislative win caps months of negotiations that often placed him at odds with Republicans who opposed extending the state income tax to pensions. He scaled back his original propose, and also relented on ending the earned income tax credit for working poor families. The governor says he’s still happy with the result and predicts it will help spur job creation.

But not enough to convince many Democrats, who intend to make this tax package an issue in legislative elections next year.

Governor Rick Snyder enters a critical week as he tries to sell his tax and budget plans to state lawmakers. The governor is still trying to build support from his fellow Republicans in the Legislature. There’s wide agreement on scrapping the Michigan Business Tax and switching to a corporate profits tax while giving most businesses a tax cut. But even a lot of Republicans are balking at a new tax on pensions as well as ending nearly two dozen tax breaks.

On the budget side, many lawmakers continue to push back against the size of cuts the governor’s suggested for to K-through-12 schools. But the governor says the work will get done on time:

“I just view it as part of the process. We did our proposal.  We get different feedback from the House and the Senate. There’s differing views in both of those houses, and we’re going to work through it and we’re on a path to get it done by May 31st.”

That’s the deadline the governor has set for finishing work on the budget and tax reforms.

A state Senate committee is expected to hold hearings and vote on the governor’s tax plan this week -- with a Senate floor vote as soon as Thursday.

Leaders in the Republican state Senate say they still have to wrangle more votes to get a sweeping tax-reform package passed.

Senate Majority Leader Randy Richardville says he will meet with Governor Rick Snyder and House Speaker Jase Bolger to update them on where the tax overhaul stands in the Senate.

"We want to be in sync. We're worked together as a team so far, and we want to continue to do that."

Even though Richardville has been able to work well with Snyder and Bolger on the tax reform package, it appears he is still meeting resistance to the deal from his fellow Senate Republicans. A handful of Republican senators have said they will not vote for the deal that includes a tax on future pensioners. Richardville says he will not make changes to the proposal as it was agreed upon and passed by the House. But he hopes to have enough votes to pass it through the Senate next week.

A state House panel has voted to cut aid to the state's 15 public universities by about 15 percent. The Associated Press reports:

The Republican-led state House appropriations subcommittee dealing with higher education funding approved the plan by a party-line vote Wednesday. The measure next goes to the House Appropriations Committee.

The funding plan started by the House is similar to one proposed by Gov. Rick Snyder but it has a few differences.

The House plan calls for an across-the-board funding cut of 14 percent to each of the state's 15 public universities in the budget year starting Oct. 1. Another 1 percent would be weighted depending on how much state aid each university gets on a per-student basis.

Funding cuts could be higher if universities don't agree to certain tuition restraints.

It's been a busy couple days at the state Capitol as Governor Rick Snyder and Republican legislative leaders announced yesterday that they had agreed on a tentative tax deal. And, earlier today, a GOP-led Senate committee approved measures to require public employees in Michigan to pay at least 20 percent of their health insurance costs.

Governor Snyder has said he wants a completed state budget for the new fiscal year by May 31st. The state is currently facing a projected $1.5 billion deficit for the fiscal year that begins October 1st.

Governor Rick Snyder and Republican leaders in the Legislature have struck a tentative bargain on tax reform and the state budget. The plan delays an October 1st income tax rollback and includes a compromise on taxing pensions.

Michigan is one of just a handful of states that does not tax pensions. The deal between Governor Snyder and GOP leaders would shield people 67 years old and older from a pension tax. The governor originally wanted to tax all pensions, but he says compromises were necessary. Governor Snyder:

“So it’s a transitional plan that I think addresses the shorter-term requirements while being structurally sound for the long term.”

The plan also calls for scrapping the complicated and unpopular Michigan Business Tax in favor of a corporate income tax. That’s part of an overall tax cut for most businesses to spur job creation.

The plan would eliminate the tax break for working poor families, but offer some new tax relief for low-income homeowners and renters.

The plan must still be approved by the House and the Senate.

With the detailed U.S. Census numbers in, Republicans in the state legislature can begin the process of redrawing the state's political boundaries for Congress and for the State Senate and the State House of Representatives.

Some ground rules first.

• Because the state lost population, Michigan will now have 14 Congressional districts (down from 15). When these districts are drawn, they must hold an equal number of people in them. That's why you see districts that cover large areas in the state's northern districts (places where there's less population) and smaller districts in the southeast (places where population is more concentrated).
• For Michigan's state legislature, districts must hold close to an equal number of people (they can deviate within 95% to 105% of each other), and "existing municipal and county boundaries should be respected as much as possible."
  

Michigan lawmakers return to the state Capitol today for the first day of the 2011-2012 legislative session. Lawmakers will be sworn-in and adopt rules, including a dress code.

As the Associated Press reports, the majority of lawmakers in both the Senate and the House will be new to their jobs:

The turnover is caused partly by the state's term limits law and a strong showing by Republicans in last year's elections. Republicans built on their advantage in the Senate and grabbed control of House from Democrats.

Lawmakers will begin the new session with a new Republican Governor and a projected $1.8 billion dollar budget deficit for the fiscal year that begins October 1st.

Both the Senate and House will also see new legislative leaders. Republican Randy Richardville will be Senate Majority Leader and Democrat Gretchen Whitmer will be the Senate Minority Leader.  In the House, Republican Jase Bolger will be Speaker and Democrat Richard Hammel will be the House Minority Leader.