budget deficit

News Roundup
7:08 am
Wed February 16, 2011

In this morning's news...

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."

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State Budget
4:49 pm
Wed February 9, 2011

Reaction to Lt. Governor's "A-bomb" remark

Lester Graham Michigan Radio

Reactions are coming in after some intense--maybe radioactive is a better word?--comments made by Lieutenant Governor Brian Calley on the governor's budget proposal, which will come out next week.

On Tuesday, Calley compared next week's budget announcement to an atomic bomb. Calley's comments, from WKZO:

"Here's why I think that our message on the 17th of February is going to be dropping an atomic bomb on the city of Lansing: We're going to do an all-cuts solution to our budget deficit."

Sara Wurfel, Governor Snyder's press secretary, claims that Calley misspoke. From the Detroit News:

"This was an extremely unfortunate choice of words," she said.

"It certainly doesn't take into account the very difficult decisions that are being made and the extensive efforts we are taking to help protect citizens and ensure we leave no one behind. We are doing everything we can to address the state's fiscal crisis and trim spending in all areas of the budget, but also to help preserve critical services."

Also, "this is not an all-cuts budget," she said.

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Politics
11:57 am
Mon January 31, 2011

A "citizen's guide" to the state's financial troubles

Governor Snyder will roll out a citizen’s guide to the financial troubles facing the state, local governments, and school districts before a meeting of business leaders in Lansing this afternoon.

The governor is a retired investor and certified public accountant. He says the guide will give the public an easy-to-grasp outline of the condition of government finances in Michigan.

Governor Snyder says the state’s official financial report runs more than 200 pages and is too big and complicated, and it’s filled with too much bureaucratic jargon for most people to understand.

Snyder says his administration has picked what he considers the most critical information, such as the state’s revenue-to-expenditures, its reserves, and long-term obligations such as pensions, and put it into an easy-to-follow 13-page briefing:

“So I think this will be a big help in terms of the stage for a more-informed discussion, where all the public can participate because we’ll all have better facts to work off of and we’ll see how far beyond our means we’ve actually spent.”

Estimates peg the state’s budget shortfall for the coming fiscal year at about $1.8 billion.

The governor will present his plan to balance the budget later this month.

Lansing
9:09 am
Tue January 25, 2011

"It’s happening in Lansing" - The State of the City of Lansing

Lansing mayor Virg Bernero delivered his sixth state of the city address last night.  He had a lot to say about past accomplishments,  but said next to nothing about the city’s projected $15 million budget deficit. 

Look around and see for yourself, it’s happening in Lansing.

Lansing mayor Virg Bernero told the audience during his state of the city address.  To that end, Bernero  spoke a lot about recent business investment in the capitol city.

He didn’t speak directly to Lansing’s projected $15 million budget deficit. He did suggest part of the budget problem can be found across the street from Lansing city hall at the state capitol. 

City budgets across Michigan are on life support.   The loss of property tax values means the loss of property tax revenue.  High unemployment means the loss of income tax revenue.  And the continued failure of state government to manage its own budget problems has cost of tens of millions in state shared revenues.

Bernero also said Lansing needs to work with its neighbors to deal with a variety of regional problems.

Politics
4:32 pm
Mon January 24, 2011

Lawmakers seek a 2-year budget cycle for Michigan

The Michigan House of Representatives
Lester Graham Michigan Radio

The state could be headed toward a two-year budget cycle.

Governor Rick Snyder and many lawmakers say they need to start thinking farther into the future when putting together a budget.

However, creating a two-year budget cycle would require an amendment to the Michigan Constitution. The Legislature would have to put it on the ballot for voters to approve.

State Senator John Proos says that could and should happen, but it will take time. He says in the meantime lawmakers can create a two-year projection:

"That’s something that every year instead of scrambling to fix a budget hole and not really telling the whole story about what our budget will look like out into the future, this will give us the time instead to say our revenue picture and expenditure picture is going to look like X. Once we’ve made that determination, then we can say are we actually getting value for the tax dollars that we’re spending."

Proos is expected to introduce a measure that would amend the constitution to create a two-year budget cycle as well as a part-time Legislature.

Proos says for now it’s important to complete work on the budget by Governor Snyder’s May 31st deadline.

City Budgets
8:44 am
Thu December 2, 2010

Pontiac closer to shutting down Police Department

The city of Pontiac is a step closer to shutting down its Police Department
Nikonmania/FLICKR

The city of Pontiac is one step closer to shutting down its Police Department and having the Oakland County Sheriff's Office take over the city's patrols.

Pontiac faces a projected $9 million budget deficit and Michael Stampfler, Pontiac's state-appointed emergency financial manager, has asked the Oakland County Sheriff Department to take over policing the city.

The Detroit Free Press reports:

A committee of the Oakland County Board of Commissioners voted 4-3 Wednesday to approve the $10-million contract. The county's Finance Committee will consider the plan today, and the full board is to vote on it Dec. 9... Undersheriff Mike McCabe said the department is expected to hire more than 60 of the Pontiac department's 70 employees and operate out of the city's headquarters in downtown Pontiac.

If approved, the Oakland County Sheriff Department would takeover on January 1st, 2011.

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