budget

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Governor Rick Snyder continues to negotiate with lawmakers to try to get his budget proposal through the Senate.

Parts of his proposal are facing a tough sell, even among his fellow Republicans.

The Snyder administration changed its position on eliminating the earned income credit, and now says families should still be able to claim it, but at a reduced rate.

Families eligible for the state credit in 2009 claimed an average of $432 per household. The Michigan League for Human Services says the reduced credit will still allow eligible families to take $140 off their 2011 tax bill, or add part of it to their return.

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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.

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This past Wednesday, the Michigan State House of Representatives approved their proposed budget for the coming fiscal year. Some pieces of the bill include a forty-eight month limit on welfare benefits, a cut to clothing allowances for poor children, a twenty million dollar cut to local bus systems, a ten million dollar cut to funds appropriated to the Detroit Institute of Arts, as well as the cutting of thirty-four State Police officers. 

The state House met late into the night last night to approve an education spending plan by a narrow margin. It took several hours for Republican leaders to wrangle enough votes to approve the budget proposal that cuts funding for universities and K-12 schools. Democrats argue the cuts would hurt graduation rates and opportunities for kids.

Republican House Appropriations Committee Chairman Chuck Moss says Democrats’ complaints don’t tell the whole story on school funding.  

“Now I’ve heard a lot of talk about how we’re destroying our education system. I’d just like to say something that this budget cuts K-12, cuts School Aid by 3-point-five percent. The School Aid Fund has gone up 14 percent over the last 10 years."

Democratic state Representative Tim Melton tried to persuade Republican lawmakers not to vote for the measure that would move money from K-12 schools to reduce cuts to colleges and universities. He says it violates what voters intended when they revamped school funding in the mid-1990s.  

 “This is a historic vote, and I don’t think this vote should be taken lightly. We’ve heard conversations about Proposal A, and I wish folks would go back and read Proposal A, especially the new members of this chamber, and tell me one time in that bill do you see the word ‘community colleges’ or ‘universities,’ and keep looking, because it’s not in there."

The House budget proposal would also sanction universities that offer domestic partner benefits to their employees.

The House version of the budget must be reconciled with a Senate spending plan before it goes to Governor Rick Snyder for his signature.

Cedar Bend Drive / Flickr

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.

The federal budget left many groups wanting more money, but those lobbying to restore Lake Michigan and the rest of the Great Lakes are actually pretty pleased with the President and Congress.

Andy Buchsbaum co-chairs a group that’s trying to get enough funding over five years to restore the Great Lakes. He says the Great Lakes Restoration Initiative didn’t get all the money it wanted in the 2011 federal budget. But Buchsbaum says given the tight economic times, the $300 million they did get will keep the program on track.

“The Great Lakes did remarkably well this year in the federal budget, and the people in this region will benefit from it.”

In Michigan, Buchsbaum says the money is being used to restore wetlands. It’s also being used to get rid of toxic hot spots, such as the so-called black lagoon in the Detroit River area. And it’s being used to prevent Asian Carp from getting into Lake Michigan.

Buchsbaum says both parties supported Great Lakes restoration because of the economic benefits, and everyone wants their children to be able to swim at the beaches and drink the water.

-Julie Grant for The Environment Report

Budget hearings continue today in Detroit. The Detroit City Council’s budget, finance and audit standing committee will discuss the city's Finance Department budget later this afternoon, the Associated Press reports. From the AP:

The Detroit City Council is continuing hearings on Mayor Dave Bing's proposed 2011-12 budget…

Bing presented his proposed $3.1 billion budget to the council last month. He says the city faces a $155 million deficit that could swell in several years unless there are more cuts, and payments to two city pensions and health care expenses are reduced.

Bing met Monday with union leadership where he detailed needed concessions to help cut into the deficit.

The council is expected to make recommendations or changes to Bing's proposal. The new fiscal year begins July 1.

Lester Graham / Michigan Radio

Update 5:14 p.m.

Governor Rick Snyder’s tax overhaul plan began working its way through the Legislature today as it cleared the state House by a mostly party-line vote.

The Republican tax reform bill would replace the complex and unpopular Michigan Business Tax with a corporate profits tax.

Two-thirds of Michigan businesses would not have to pay the tax.

Part of the revenue lost to the state would be made up by eliminating dozens of tax breaks.

Many of them go to businesses and charities. Also gone would be earned income credit for working poor families and the income tax exemption for most seniors on pensions.

“This is a turnaround moment for Michigan,” said Republican House Speaker Jase Bolger. “Today’s winners are our local small business owners. Today’s winners are the unemployed because now those small business owners can create jobs.”

Democrats say it’s not fair to make working families and seniors make up the difference while most businesses pay less. Democratic state Representative Barb Byrum says it's not a fair trade.

“This legislation is not a shared sacrifice and should not be adopted. Today is just another day another day to give an 82% tax break to wealthy, corporate special interests. Another day to take from our children, our seniors, and our working poor."

The measure now goes to the Republican-controlled state Senate.

3:41 p.m.

Governor Rick Snyder’s tax overhaul plan has begun its march through the Legislature.

It won the approval of the state House by a mostly party-line vote.

The measure would scrap the complicated and unpopular Michigan Business Tax.

It would be replaced by a corporate income tax that would not be paid by two-thirds of the state’s businesses.

Part of that lost revenue would be made up by ending many tax breaks for businesses, working poor families, and seniors on pensions.

Allan Cleaver / Flickr

Governor Rick Snyder says he may want to bank the money from an unexpected improvement in tax collections – if the windfall exists.

Early revenue projections suggest Michigan may collect $500 million more than anticipated.

But Governor Snyder says he’s not ready to count that money as part of his budget plans.

He says the state may be better off putting it into savings.

“I’m bullish that we’re on a positive economic path, but to say we’re going to see just an upward curve without a few bumps, I would be careful about speculating that given the challenge of gasoline prices and such.”

Democrats want to use any windfall to scale back proposed cuts to schools. The next official revenue estimate comes in mid-May.

The House and Senate are continuing to work this week on budget proposals with an eye toward finishing before June first.

screen grab from TV commercial

People and businesses that owe back taxes to the state of Michigan have until June 30th to pay up without paying fines and penalties.

There are potentially hundreds of thousands of people and businesses that owe the state unpaid taxes.

The state hopes to net $90 million dollars from the tax amnesty program. 

State Treasurer Andy Dillon says if you owe, now is a good time to pay:

"It doesn’t matter why you didn't pay your taxes – the penalties can be forgiven. And the penalties can be quite stiff. It depends on the tax that you’re talking about, but it can be as much as 25% of the liability that can be forgiven, and the sooner you pay it off, the sooner you stop paying interest on that obligation."

This is the third time since the 1980s the state’s offered amnesty to people and businesses with unpaid back taxes.

The program requires payment of all back taxes plus interest.

The amnesty program was approved by the Legislature last year to find some new revenue to help balance the budget.

The Michigan Tax Amnesty website declares "all excuses welcome."

Here's the program's TV spot:

Governor Rick Snyder offered some hints as to what his soon-to-be unveiled education reform plan will look like.

The governor addressed an education conference in East Lansing today.

Governor Snyder says student test scores are both “startling and scary,” and that Michigan is falling behind the country and the world in preparing young people for life after school:

“We need to do better and that’s something we need to focus on and we will,” said Snyder.

The governor says he wants to relax school regulations s to give teachers and principals more freedom and responsibility over educational decisions. And then he says the state will measure what happens:

“We need to put much more focus on proficiency, on growth, on measurements and results than we have had in the past," he said. "It’s about really delivering results for these kids. The whole system has to be geared to say, 'how do we make sure each and every child in our system gets a good year’s education each and every year?' Think about all the great talent, all the great resources that we have in our system, yet we’re not achieving the results that we have to achieve."

The governor also says he wants to do more to keep gifted teachers in classrooms instead of promoting them into administrative positions.

The governor says he envisions an education system that starts with pre-school and continues past college.

The governor will roll out his education reform agenda on Wednesday in Detroit.

Sarah Hulett / Michigan Radio

It appears Michigan may be in for a revenue windfall of about $500 million dollars more than  it was expected to take  in this year.

The state Senate Democratic leader says Governor Rick Snyder and the Legislature should use that money to avert cuts to schools.

The state Senate Democratic leader is calling for protections in the Michigan Constitution against using the School Aid Fund for any purpose other than K-through-12 education.

Senate Minority Leader Gretchen Whitmer says she’s looking for any way she can to avert school aid cuts as high as $470 per student.

Nissim Benvenisty / wikimedia commons

Governor Rick Snyder says he is opposed to provisions in Republican budget plans that would restrict how money is spent on embryonic stem cell research at public universities.

Republican lawmakers are renewing efforts to enact additional rules surrounding the voter-approved amendment that allows public funds to be used for the research.

Voters approved the amendment to the state constitution in 2008.

Since then, Democrats have blocked efforts by opponents of embryonic stem cell research to demand reports or enact additional restrictions on  it, but now Republicans are in charge in the Legislature.

Governor Snyder is a Republican who supports the voter-approved amendment and stem cell research.

The governor says he wishes Republican lawmakers would leave stem cell research out of the debates on university spending:

"I think we need to focus on higher education, not stem cells. We passed a constitutional amendment on that topic some time ago and we need to follow through on what our voters said."

The governor has the authority to veto budget line items.

The governor and the Legislature are continuing to negotiate on the budget with the goal of having it wrapped up by June first.

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A story by Michigan Radio’s Rina Miller about foster care expenditures went viral over the weekend, thanks to a post on Gawker. Gawker, it seems, caught wind of the story after the Michigan Messenger posted it.

The story deals with money that the state allocates to families to buy clothes for foster children.  

State Senator Bruce Caswell wanted to require foster families to purchase clothes at thrift stores like the Salvation Army and Goodwill.

From the original article:

Foster children in Michigan would use their state-funded clothing allowance only in thrift stores under a plan suggested by State Senator Bruce Caswell.

Caswell says he wants to make sure that state money set aside to buy clothes for foster children and kids of the working poor  is actually used for that purpose.

He says they should get "gift cards" to be used only at Salvation Army, Goodwill or other thrift stores.

"I never had anything new," Caswell says. "I got all the hand-me-downs. And my dad, he did a lot of shopping at the Salvation Army, and his comment was -- and quite frankly it's true -- once you're out of the store and you walk down the street, nobody knows where you bought your clothes."

The story originally aired on Friday, April 15. Since that time, we have received more than 270 comments - most people expressing their outrage over Caswell's proposal.

We received this comment from Sonja S. who says she was in foster care from ages 11-17:

Unfortunately, by demanding the money be spent in thrift stores, Mr. Caswell is doing emotional harm to the children. It doesn't matter what his motives are, the fact is that they're ill thought-out.

Senator Caswell said he received a lot calls after the story aired from people asking him to change his proposal.

Ifmuth / Flickr

From the Associated Press:

Commissioners in Bay City are bracing for another year in the red heading toward Monday's presentation of the proposed 2011-12 city budget. The Bay City Times reports a deficit similar to the $1.6 million faced this year is expected due to anticipated cuts in state funding.

The budget year begins July 1. Commission President Kathleen Newsham warns that the news is "going to be bad." City Manager Robert Belleman says no municipal layoffs are expected in the proposed budget and that money from a reserve fund will be used to cover a deficit.

Bay City registered $1.4 million in savings last year. Belleman says the city's revenue sharing from the state is down by at least a third.

Michigan House Republicans

(This story originally aired on Marketplace)

Across the country, states are weighing competing funding priorities as they work to close gaping budget deficits.

In Michigan, Republican Governor Rick Snyder isn’t just trying to erase $1.4 billion in red ink. He also wants to fundamentally remake the state’s tax code. Snyder says it’ll help reverse years of economic decline.

Re-writing the tax code

Today's tweet from the Governor... "Let's focus on doing the right things to get our fiscal house in order and create an environment where jobs can grow."

For a state with $1.5 billion budget deficit and leaders who want to ease taxes on businesses - that means cuts.

The Appropriations Committee has voted on some cuts in education today.

From the Associated Press:

A Michigan Senate committee has voted to cut state aid to school districts by an additional $170 per student for the fiscal year starting Oct. 1.

The Republican-led Senate Appropriations Committee approved the cut along party lines Thursday. The reduction would be in addition to a $170 per student cut already on the books for the current fiscal year that would be continued into next year. That makes the total reduction $340 per student.

The proposal advances to the Senate floor. The cuts recommended by the Senate panel aren't as deep as the additional $300 per student cut recommended by Republican Gov. Rick Snyder, which would make the total cut $470 per student.

Most state departments will be cut next fiscal year as Michigan continues to struggle with budget problems.

The state's new fiscal year starts on October 1st. The State Legislature and Governor Rick Snyder are hoping to finalize the budget by June 1st.

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A state Senate budget subcommittee has rolled back the size of Governor Rick Snyder’s proposed cut to K-through-12 schools.

The Senate subcommittee recommendation would still cut school funding by $170 per student, but that’s less than the $300 per student cut called for by the governor in his budget proposal.

State schools superintendent Michael Flanagan says more money for K-through-12 education is always welcome, but Flanagan says he’s concerned about what might have to be cut to make up that money.

"I don’t want to see pre-natal care for moms go at the expense of a couple of bucks in the formula, so that we actually have a bigger problem than we would have had, and I hope that’s what we can start to get people to think about is the continuum of services for kids – not just the K-12 issue."

The full Senate Appropriations Committee is expected to vote on the budget recommendation tomorrow, along with budgets for universities, community colleges, and state agencies.

The governor has set a goal of wrapping up the entire state budget by June first.

screen grab of YouTube video

In an attempt to reach people who are hanging out online, President Obama is holding an "online town hall" meeting at the headquarters of Facebook in Palo Alto, California. There he'll discuss his ideas for bringing down the deficit, and take questions posted on the White House Facebook page.

Here's the invite from the President released this morning:

Carla Marinucci on the Politics Blog of the San Francisco Chronicle writes:

...only a few lucky invitees and reporters will actually be allowed inside the headquarters of Facebook to see the town hall...White House communications director Dan Pfeiffer told reporters last week in a conference call that Obama isn't necessarily aiming for the youth demographic with his event. "It is an attempt to reach people who may not get their news through traditional news sources like newspapers and the network news,'' he said. "And we want to go to where people...congregate online and communicate with them there. And Facebook is certainly one of the premiere places to do that."

More than 300 local officials and prospective emergency managers are in Lansing today and tomorrow to be trained in the state's new fiscal crisis law.

The law gives sweeping authority to emergency managers named to run school districts and local governments that can no longer pay their bills.

Terry Stanton of the Michigan Department of Treasury says the goal is for the state to intervene earlier to avoid the drastic step of a state takeover.

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