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Capitol Corner for June 16, 2008
K-12 School Aid Budget Moves from House to Conference Committee
House Votes: On Tuesday, June 10, 2008 the full House voted to pass their version of the K-12 budget (SB 1107). The vote was 61-48, the split was mainly along party lines, with Rep. LeBlanc (D-Westland) joining the Republicans in voting "no" and Republican Representatives Gaffney (R-Grosse Pointe Farms) Hune (R-Hamburg), Marleau (R-Lake Orion), Rocca (R-Sterling Heights) and Ward (R-Brighton) voting "yes."
The House version comes in at $13.4 billion and includes a $114.8 million increase in foundation allowances to schools. The per pupil foundation grant funding formula will give every district an increase of at least $55 per pupil to as high as $110 per pupil. The total increase over the current fiscal year's K-12 School Aid budget is $517.6 million. The budget as passed by the House spends $34.3 million more than expected revenue in the School Aid budget.
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Capitol Corner for June 6, 2008
Budgets Begin to Move Back Out of the House
The House was able to pass back to the Senate five budget bills on Thursday before they ran into a procedural problem and decided to go home in the early evening. Prior to adjourning, the House passed budgets for Community Colleges (SB 1094) the Department of Community Health (SB 1093), the Department of Corrections (SB 1095), the Department of Education (SB 1096), and the Department of Natural Resources (SB 1106).
The Senate when it receives these bills will reject the House versions and send the bills to conference committees. The conference committees made up of six members, three from each chamber (two from the majority caucus and one from the minority caucus) will meet after the Legislative Leadership and Governor have agreed to budget targets for each of the budgets. Legislative leaders are still optimistic that the budgets can be passed before the summer recess schedule to begin just before the July 4th holiday.
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Capitol Corner for May 30, 2008
Star Power Rally Takes Capitol by Storm
A special thanks to everyone that attended the 2nd Annual Star Power Rally. It was a
smashing success. Despite abnormally cold May weather we still had over 500 parents,
children, teachers and early childhood advocates attend the rally and meet with their
legislators.
At the Rally, representatives from Consumers Energy, the United Way, and Dr. William
Miller were recognized and honored for their hard work and efforts to increase the build a
state and local Great Start system. They were all saluted as our “Rising Stars,” and
applauded by the crowd.
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Capitol Corner for May 15, 2008
Revenue Conference Paints Negative Picture
Earlier this week, both House and Senate Fiscal agencies signaled that Friday’s Revenue Estimating Conference would bring more bad news about the State's finances and that was certainly the case. The agencies prediction of about a $500 million short fall in revenue for Fiscal Year 2009 was worse than the final $395 million shortfall. School Aid Fund revenue alone missed the mark by $163.2 million.
Michigan's struggling economy and stagnant real-estate market coupled with a major tax break for movie-makers and the federal stimulus package are the primary reasons next years numbers are off.
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Capitol Corner for May 9, 2008
Blueprint for Fighting Crime Emphasizes Early Childhood Education
On Monday, several law enforcement representatives unveiled the first step in developing a comprehensive plan to reduce crime in Michigan. A report entitled "Blueprint For a Safer Michigan" offers a variety of crime prevention strategies including early childhood education.
The blueprint backed early childhood education as a proven way to combat criminal acts. According to Kent County Commissioner Nadine Klein, since 2000, her county has spent $1.8 million into pre and post-natal care, early education, truancy prevention, after-school programs and other programs designed to steer children away from hard lives that can lead to future criminal behavior.
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Capitol Corner for May 2, 2008
Passage of School Aid Budget on Hold
This Wednesday, School Aid and Education Committee Chair Matt Gillard announced that he is in no hurry to pass the House version of the School Aid Fund budget. Gillard, who is planning on two more weeks of testimony, said the results of the next Revenue Estimating Conference in May has nothing to do with his decision.
"I'm not concerned about putting it out before or after the May Revenue Estimating Conference," reported Gillard. The Chairman went on to say that the House version would be based on the same state budget estimates as the Senate version.
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Capitol Corner for April 25, 2008
CMS Energy Makes $175,000 Contribution to Local GSC
On Friday April 25th, the Jackson Citizen Patriot reported that CMS Energy will be stepping up to the plate and making a commitment to furthering early childhood education through the Jackson Great Start Collaborative. CMS President and CEO David Joos said the company will be investing $175,000 in three key areas: child-care payment assistance, a program to provide free books to preschoolers and four site-based mentoring programs.
Great Start coordinator Sheri Butters certainly thought Joos and CMS hit a homerun. "Consumers is really taking a leap of faith with us. It's amazing," said Butters.
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Capitol Corner for March 21, 2008
Budget Process Moving Faster than Last Year
The word around Lansing is that the Legislative Leadership would like to have the budget process wrapped up by June 15th. By the look of the progress being made this week in the Capitol, there may be a good chance of the legislature meeting that deadline. Traditionally, the budget is targeted to be finished before any legislator has to walk in a Fourth of July Parade.
The budget bills are usually divided up equally between the two chambers. The chambers try to finish up their half of the bills by the Spring Recess and then pass them over to the other chamber for action after the Spring break. This year that recess came early due to an early Easter. The House and Senate are taking slightly different recess schedule, with the House being off the next two weeks and the Senate working next week before leaving town for two-weeks.
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Capitol Corner for March 7, 2008
More Bad Financial News for the State
Just when the Governor and Legislators figured they had corrected Michigan’s financial ship, Senate and House Fiscal Agency Directors announced this week that their projections show the current fiscal year and next fiscal year to be facing a combined potential deficit of $383.6 million.
On Wednesday, Gary Olson, Director of the Senate Fiscal Agency, briefed the Senate Appropriations Committee on his projections. He told them that in the current fiscal year, the state’s is facing a $134 million shortfall, including $119 million in the general fund and $15 million in the School Aid Fund, from revenue projections made at the January Revenue Estimating Conference.
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Capitol Corner for February 11, 2008
Governor’s Budget Proposes Increase for Early Childhood
On Thursday, February 7, 2008, Governor Jennifer Granholm presented her Fiscal Year 2009 budget to the Legislature. The total budget allocates spending of $44.8 billion, which is 2.9 percent increase over the current year budget. The General Fund totals $9.849 billion which is actually slightly less than the current year total by less than 1/10 of one percent. The budget, as proposed, is funded with no new taxes or fee increases.
While this could be considered a “flat” budget when compared to the current spending, one area of noticeable increase in recommended spending is in early childhood. The Governor has proposed to increase spending by $31.5 million for early childhood initiatives.
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Capitol Corner for December 21, 2007
Legislature Misses Deadline but Kills Service Tax
The Legislature in true fashion for this year came to agreement with the Governor on replacing the much maligned service tax just after it went into effect early on December 1, 2007. The service tax was repealed just before 5 a.m. when the Senate (30-4) and the House (66-42) voted to approve HB 5408 (S-8).
The service tax was replaced in the legislation with a 21.99 percent surcharge on the new Michigan Business Tax and was capped at $6 million for any one business. The surcharge will sunset on January 1, 2017, with economic triggers that could end the surcharge as early as 2014.
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Capitol Corner for November 21, 2007
Senate Back from Recess to Pass Service Tax Replacement
The Senate came back from its two week recess to pass a bill to replace the new service tax. The Senate passed its version of the replacement on a straight party-line vote, 20 -16.
The Senate version of HB 5408, like the House version, places a surcharge on the new Michigan Business Tax. It differs in the rate of the surcharge 13.85 percent versus 32.9 percent, it raises the cap of the surcharge from $2 million to $7.5 million, and it has a sunset of January 1, 2011 which the House did not included. The Senate version would also use some $219 million in one time funds from the MBT to make up for some of the lost revenue.
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Capitol Corner for November 9, 2007
Governor Signs School Aid Budget Bill
On Thursday, November 8, 2007, the Governor signed the School Aid Budget bill, House
Bill 4359 (now Public Act 137 of 2007), for fiscal year 2008. The overall School Aid
Fund/K-12 budget shows a 1 percent increase to state payments to school districts, as
agreed to in the overall budget deal reached at the end of September. In the $13 billion
budget, the school aid foundation grant minimum was increased by $96 per pupil, from
$7,108 to $7,204 per pupil. All but 51 public school districts will see this $96 per pupil
increase; these 51 districts will see a $48 per pupil increase.
The bill as signed by the Governor includes increased funding of $750,000 for local
Great Start Collaboratives for a total $1.75 million. This funding will ensure the
continuation of 21 existing Great Start Collaboratives across the state and provides for
the opportunity to bring in additional communities.
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Capitol Corner for November 2, 2007
Budget Deal Done!
It took until 4 am on Wednesday, October 31, 2007 but the Legislature passed all the necessary bills to complete the budget. The Governor worked up to 11:59 pm to sign as many of the bills as she could to keep government operating before the 31-day budget extension expired. The seventeen appropriation bills contained the necessary $433 million cuts in general fund spending.
The total state budget for Fiscal Year 2007-2008 (FY ’08) totals $42.8 billion, including $9.8 billion in general fund.
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Capitol Corner for October 26, 2007
Week Ends without State Budget Being Completed
The legislative week ended without a completed budget deal. While most budgets have been agreed upon in principle, no Conference Committee has met to pass any of the needed bills out of committee. This will leave only three days next week for all the 17 budget bills to be passed out of conference committees and voted on by both chambers.
The negotiations have centered on where and how to make the necessary $435 million budget cuts to balance the new fiscal year budget. Most of the outstanding issues have been resolved, but several big ones including where the $80 million cut will come from in the Department of Human Services budget remain to be settled. Senate Republicans want to privatize close to half of the children’s welfare system, which is opposed by the Governor and the Department as not being needed, not saving any money, or being anymore efficient or effective in service delivery than the public sector.
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Capitol Corner for October 19, 2007
Business Groups Target New Service Tax
The "Ax the Tax" Coalition has formed to repeal the newly passed use tax on services in Michigan. The service tax that was part of the budget deal reached on October 1, 2007. The business groups, 39 of them so far, want the legislature to repeal the service tax or if that fails they will try to launch a petition drive to place the question before the voters. Either way a repeal of the tax would produce a sizable hole in the state's budget. The expanded service tax, if repealed, would cause a $600 million to $750 million hole in the budget. The legislature would then have to either find more revenue or make additional cuts to the departments. Neither option seems likely.
The business groups, trade associations, and corporations that make up the coalition are upset that the tax was passed in the "dead of night", with no public input. They are also worried about how much of the service tax will fall on Michigan businesses especially those that utilize a lot of outside consultants. Several manufacturers and their representatives are fearful that the beneficial changes in the new Michigan Business Tax will be erased by the new service tax.
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Capitol Corner for October 12, 2007
Legislature Begins Work on Setting Budget Targets
The legislature began work this week on setting budget targets for each department. As part of the budget agreement that included raising new revenue, passing governmental reforms, the legislative leadership agreed to cut $433.3 million out of the budget for the new fiscal year.
Legislative leadership will continue to meet with the Administration to set overall spending targets for each of the state departments. Then the appropriation conference committees for each budget will work on the underlying budget detail. Those “conference reports” will be forwarded to the House and Senate for an up or down vote. Once passed by each chamber the bills will be sent to the Governor to be signed or vetoed or line-item vetoed.
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Capitol Corner for October 1, 2007
Budget Deal Reached in the Thirteenth Hour
The State experienced a partial shutdown for just over four hours, from Midnight to 4:18 a.m. on Monday morning, October 1, 2007. The Governor rescinded the shutdown, once all the pieces of the budget deal had been passed by the legislature. State parks had been emptied on Sunday night, freeway rest stops were closed, and several drawbridges were left in the raised position so boats could get through during the shutdown period.
In the end, the House and Senate passed enough new revenue, $1.48 billion, from an increase in the state income tax and extending the sales tax to some services to end the stalemate in Lansing. In Fiscal Year ’08, the new revenue will only be $1.3 billion, since the extension of the sales tax will not be implemented until December 1, 2007 to give the Treasury Department time to set up the new tax. Read More...
Capitol Corner for September 27, 2007
Count Down To Budget Deal or Shutdown:
As the end of the month and fiscal year draw closer, the potential for a partial state
government shutdown increases with each passing day of inactivity by the legislature.
Depending on the day, the hour and the minute, it is either doom and gloom or a ray of
sunshine peaks through only to be gone again.
Sunday, Day 8 to Shutdown:
Senate Passes $931.9 million in budget cuts in both the General Fund and in the School Aid/K-12 budget, even with these cuts and the use of one-time revenue from the new Michigan Business Tax the deficit in the coming Fiscal Year budget is still a whopping $600 million. More than 2,000 employees would be cut and almost every part of the state budget would be reduced. Read More...
Capitol Corner for September 21, 2007
Budget Deal Stalls Again:
The Income Tax Increase:
Thursday looked like the day that the House would finally gather enough votes to increase the income tax and make significant movement towards solving the pending budget crisis. But another marathon session day produced only another strike out. The effort to increase the state income tax rate to help fill the budget deficit fell four votes short. With no budget agreement, the start of the new fiscal year just 10 days away, and the budget deficit is a whopping $1.75 billion the threat of a partial state shutdown looms larger with each passing day. Read More...
Capitol Corner for September 7, 2007
Budget Discussions Stall as Potential Deal Falls Apart
As activity increased and anticipation built at the Capitol this week, a potential budget deal seemed imminent, but by the end of Thursday any chance that the parties would come to agreement faded as daylight became nightfall. The Governor, Speaker Dillon and Majority Leader Bishop all sat down this week to work out a potential budget deal before the new fiscal year begins on October 1, 2007.
Finding new revenues, the source and amount, has been the major stumbling block in resolving the budget impasse. Senate Majority Leader Bishop has suggested raising the sales tax by 1%, from 6% to 7%, as a potential revenue source. This would have to be approved by the voters, and could be placed on the ballot with a 2/3 vote by each chamber. The hope was that if the Senate and House both acted this week then the ballot question could be placed on the November 6, 2007. Read More...
Capitol Corner for August 24, 2007
Budgets Start to Move...In Opposite Directions
On Wednesday, the House and Senate both began to move their "first House" budget bills out of their chambers and over to each other. Each chamber appears to be moving in the opposite direction from the other. The Senate, for the most part, continued to make budget cuts to departments and the House, for the most part, increased the budgets for the departments. This action comes on top of the on-going discussions between the Speaker and Senate Majority Leader on how to resolve the budget impasse.
The House was in session from 1:30 PM on Wednesday until 6 AM on Thursday morning. The Senate had a long day, but nothing compared to the House. In both chambers, the budgets passed mostly along partisan lines. With first House bills that isn't so unusual. What is unusual, is how late first House bills are moving this year. It will be a real race and struggle to get all of the budgets and necessary revenue bills completed by October 1, 2007, the beginning of the fiscal year. The clock is ticking. Read More...
For more information about ECIC legislative updates, please contact Chris Kolb at ckolb@ecic4kids.org
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New Report from the Center on the Developing Child, Harvard University, August 2007 
