Flint Mayor Dayne Walling spent much of last night address talking about what’s working in his city. But he also talked about what he thinks would help the city deal with a growing budget deficit, ‘shrinking the size of city hall.’ Walling wants to drop funding for some city commissions and eliminate some executive positions.
"My proposed changes would save the city of Flint $6 million over 4 years. Over $15 million dollars over 10 years. Its not the whole solution. But its an important part of it. Its an important part that makes a difference."
The city of Flint wants to cover its $17 million budget deficit by raising funds on the bond market.
It has to get permission from the State Administration Board to do that. So far, the Board has tabled its decision.
If the city can't raise bond money, it might be facing bankruptcy or a state takeover.
You can start by adding $1.2 billion to the state's budget woes by cutting business taxes, or you can leave business taxes alone and deal with the current budget hole the Center estimates at $1.4 billion.
Once you start, your options are to cut, cut, cut (cuts to education, cuts general government, cuts to prison and police, cuts to the public workforce, and cuts to welfare and health care) - or - you could raise taxes.
So far, of the 300 or so people who have participated - raising the Beer Tax is the most popular option.
They say there are now more than 1,000 such groups around the country, the first time the SPLC has seen the number of "hate groups" top 1,000 since it started counting them in the 1980s.
From the SPLC press release:
Several factors fueled the growth: resentment over the changing racial demographics of the country, frustration over the lagging economy, and the mainstreaming of conspiracy theories and other demonizing propaganda aimed at minorities and the government.
A hate group is defined by the SPLC as a group that has "beliefs or practices that attack or malign an entire class of people, typically for their immutable characteristics."
The SPLC lists 35 "hate groups" in Michigan on their map.
Rick Pluta, of the Michigan Public Radio Network, filed a report on the protests in Lansing saying they were organized by "public employee unions, and attracted state and local government workers as well as teachers who had a snow day." From Pluta's report:
They’re fighting against anti-union bills sponsored in the Michigan Legislature, and to show support for union rallies in Madison-Wisconsin and Colombus-Ohio.
Sally McNamara is a teacher in the Adrian Public Schools:
"I’m here supporting the children of our state and our nation. Are we in debt? Are we in trouble? You bet we’re in trouble. Is it really hard-working people who are driving us down in the gutters? No. It’s not."
Pluta says dozens of Tea Party protestors also gathered to rally in favor of the proposed budget cuts.
Protestors came to Lansing today to voice their opinion on the proposed cuts by the Snyder administration and to protest bills in the Michigan legislature they see as anti-union.
The Detroit News reports that "unofficial estimates put attendance at close 1,000" people:
After a brief rally and march to the Capitol, members streamed across to the House office building to call on legislators, and about 200 construction workers poured into a hearing room where testimony was to be taken at noon on a bill to repeal prevailing wage requirements.
Members plan to cram the gallery of the House chambers this afternoon where lawmakers are slated to discuss bills that would grant authority to emergency financial managers to toss out collective bargaining contracts.
The Detroit Free Press says the protestors in Lansing were inspired by the protests taking place in Wisconsin:
Many protesters...said they thought Snyder's proposal was an attack on unions similar to a bill being pushed by Wisconsin's new Republican governor. They said they were inspired to turn out by eight straight days of protests that have drawn tens of thousands of people to the Wisconsin Capitol.
The Detroit News reported on Tea Party protestors who turned out in smaller numbers in Lansing today. They're supporting Governor Snyder's proposed cuts and some hope Snyder will take a similar stand on unions that the legislature is taking. From the Detroit News:
Tea party supporters Annamaria Evans of Clarkston, Pat Miller of South Haven and Jack Stone of Lake Orion said they want Michigan to end collective bargaining rights for public employees, just as Walker has proposed in Wisconsin.
Miller, a member of the Southwest Michigan Tea Party Patriots, said he wants to see Snyder get as tough on unions as the Republican-controlled Michigan Legislature is.
Hundreds of outraged union members filled a State House committee room and the surrounding hallways to protest a proposal to eliminate Michigan’s Prevailing Wage law. Many union members people began chanting and banging on the walls of the committee room.
Unions say the law makes sure workers are paid fairly and that union members get work.
Some Republicans want to get rid of the Prevailing Wage law, saying developers and contractors could save money on construction costs by making wages more competitive.
Jeff Mowry, a member of Plumbers and Pipefitters Local 333, says the proposal to get rid of the wage law is not a direct attack on the collective bargaining rights of unions, but it still tries to hurt unions.
"You know, that’s the scary part – everything gets very complicated and very confused but it sure seems like it’s all tied together. And it seems like this is just one piece of a great big puzzle that’s looking to take away our collective bargaining rights, yeah."
Some Republican lawmakers say eliminating the prevailing wage law would save about 10% on construction costs and could create more jobs in the state.
Chris Fischer with the Association of Builders and Contractors gave a presentation to lawmakers on how the state could save money by eliminating the wage law.
Fischer says the chanting was distracting, but he was not deterred.
"It is difficult to make a factual presentation when there’s a lot of white noise in the background. It is disconcerting, but the bottom line is prevailing wage does come at the expense of two things Michigan does not have right now – and that’s jobs and taxpayer dollars."
Union members were told they will be able to testify on the wage law when legislation is before the committee for a vote.
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.
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.
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.
A state board made up of Michigan's top elected officials (or their delegates) is expected on Tuesday to consider the city's application to issue $20 million in bonds, part of Flint Mayor Dayne Walling's budget plan.
The State Administrative Board meeting will take place at 11 a.m. in the Lake Superior Room of the Michigan Library and Historical Center in Lansing. The meetings are open to the public.
Michigan Radio's Steve Carmody reported that without the money, Mayor Walling said the city will have trouble making payroll in March:
“There is nothing more important for our city right now than the bond. We’ve been carrying a crushing load of past deficits on our shoulders. And we’ve come to the point where the pooled cash is not there to make payroll throughout the entire month of March without an infusion of cash,” said Mayor Walling.
If state officials do not approve of the bond plan, the state may eventually takeover Flint’s finances.
Detroit Mayor Dave Bing is expected to reveal his plan for getting police officials to live in Detroit this morning. As Michigan Radio's Sarah Hulett reports:
Detroit had a residency requirement until 1999, when the state Legislature outlawed it. Now more than half the officers on the police force live outside the city limits. Mayor Bing has said he believes neighborhoods are safer when the cops who patrol them live there too.
Not all police officials agree with Mayor Bing and say they can live outside city limits and still be effective for the residents of Detroit.
Michigan Radio's Sarah Cwiek will have more Mayor Bing's proposal later today.
A replacement for the Michigan State Fair?
The Michigan State Fair was canceled in 2009 after budget cuts and declining attendance. Now the Associated Press is reporting that another cast aside in Michigan might fill the gap.
The AP reports that the "Great Lakes Agricultural Fair" would be held in and around the Pontiac Silverdome and would be run without any state funding. From the AP:
Oakland County Executive L. Brooks Patterson and U.S. Rep. Gary Peters are expected to be among those on hand Monday to unveil plans for the Great Lakes Agricultural Fair…The annual festival would feature a farm market, live animals and musical performances.
Ford to increase production
If the amount of Super Bowl ads from car makers didn't clue you in, here's another sign that automakers are expecting much better sales this year. The Detroit Free Press reports that Ford Motor Company plans to boost factory production in the U.S.:
Ford Motor Co. says it will increase U.S. factory production by 13% in the first quarter due to higher sales. Ken Czubay, vice president of U.S. sales, says Ford is studying additional shifts at plants that are now running on overtime. The Dearborn-based automaker said retail sales to individual buyers rose 27% in January. Global marketing chief Jim Farley said to expect further increases through the year.
It says college-educated public employees earn 21% less than private sector workers with degrees.
It also found local government workers were compensated at about the same rate as their private sector counterparts.
Jeff Keefe is the Rutgers University management and labor relations professor who conducted the study:
"So the study concludes that state government employees are under-compensated in the state of Michigan, while local government employees are neither over- or under-compensated in the state of Michigan."
The report takes into account education, salaries, and benefits.
Ethan Pollack, with the Economic Policy Institute, says employee compensation is not the biggest factor behind the state’s budget trouble:
"Michigan isn't significantly different than the deficits you are seeing all across the country…This is not about over-compensation of public sector workers. This is [about] two things. The cyclical deficit is from the recession, and the structural deficit is health care costs."
The Economic Policy Institute says its seven-state study found growing health care costs, and not employee compensation, are the biggest factor in budget deficits.
A measure to fully fund the Pure Michigan advertising campaign for the rest of the year appears poised for a vote next week in a state House committee.
Tourism officials and travel-related business owners showed up at the first hearing to support the legislation.
Dan Musser’s family owns the Grand Hotel on Mackinac Island. He says the national ad campaign has helped draw a growing number of out-of-state visitors to the island.
"Our potential is even greater than our success at this point, but if the campaign is not fully funded, we’ve wasted the opportunity for the Pure Michigan brand to reach its full potential. That potential brings tax revenues to the state, supports and creates jobs for Michigan residents."
Musser also says Mackinac Island is splitting the cost of a $1 million nationwide Pure Michigan ad purchase with the state’s tourism agency, Travel Michigan.
The ad will use the Pure Michigan brand to specifically promote Mackinac Island to travelers.
The Henry Ford in Dearborn will also share the costs of national campaign promoting the museum and the Pure Michigan brand.
Travel Michigan says about 30 other resorts and regional tourism offices are also forming Pure Michigan ad partnerships with the state.
A representative from Dickstein Shapiro LLP spoke with Michigan Radio's Lindsey Smith. The rep. told Smith that Hoekstra plans to continue living in Holland. Hoekstra will apparently split his time (50/50) between home and Washington D.C. for now.
No word yet on whether Hoekstra is looking for a couch to crash on in D.C.
Former West Michigan Congressman Pete Hoekstra has a new job.
He'll be working as a senior advisor to Dickstein Shapiro LLP, a law firm and lobbying group with offices in Washington D.C., California, Connecticut, and New York.
Going from a member on Capitol Hill to a member of a group that lobbies Capitol Hill is a common path for many former members of Congress.
Hoekstra will join former Speaker of the House Dennis Hastert and former Senator Tom Hutchinson at the firm.
In the firm's press release, Hoekstra said he looks forward to collaborating with Hutchinson and Hastert on a "daily basis," and using his expertise in "strategic and contingency planning":
"National security—from homegrown terrorism to cyberwarfare —continues, by necessity, to be a governmental imperative at all levels, and lawmakers in Washington make crucial decisions every day that impact corporations across America. As the Republican leadership in the U.S. House seeks to rein in federal spending, and as these important issues continue to loom large, there are few things more important than seasoned strategic counsel who understand the nuanced interworkings of government. Dickstein Shapiro has what it takes."
Before he left, Hoekstra was the ranking Republican and a former chairman of the House Permanent Select Committee on Intelligence.
Governor Snyder says he wants you to understand the state's budget crisis. He's rolled out a guide to help you do that. It's called the "Citizen's Guide to Michigan's Financial Health." Michigan Radio's Morning Edition Host, Christina Shockley, spoke with Lester Graham this morning.
Graham heads up Michigan Watch, Michigan Radio's investigative unit. Graham took a look at the Guide and gave us his first impressions. You can listen to the audio here:
People in the state are gearing up for the coming storm that's expected to dump around a foot of snow in the region in less than 24 hours. Survival instincts are kicking in as people flock to grocery stores, gas stations, and hardware stores. The Kalamazoo Gazette reports some plow drivers are getting their sleep now in anticipation of staying up for the next couple of days. Andy Northey, the owner of R & A Lawn Maintenance and Landscaping in Plainwell, said:
"We're not going to be able to keep up with all the snow that’s expected," said Northey, whose company clears snow from residential and commercial properties from Allegan to Kalamazoo to Battle Creek. "Absolutely no way."
The Detroit News reports that Delta airlines is allowing people to change their flight plans without charging an extra fee:
Delta and other airlines encouraged passengers to change their travel dates. Anyone scheduled to fly this week can switch their flight to a time through Feb. 8 without incurring a fee, said Delta. The waiver involved Michigan and 19 other states expected to be hammered by the storm. The states range from Nebraska to Maine, and Wisconsin to Oklahoma.
The National Weather Service has issued a blizzard warning for the southern part of Michigan as the dense snow band travels across the state. The warning takes effect around 5 p.m. for the western part of the state and around 7 p.m. for the eastern half. The warning will last through much of the day tomorrow.
Snyder releases report on state's finances
Governor Rick Snyder released the "Citizen's Guide to Financial Health" yesterday around 3 p.m. The Governor said the report is "a plain-English, easy-to-understand look at Michigan's financial situation and the challenges ahead."
One of the more controversial parts of the report said that state employees are over-compensated compared to their private sector counterparts. Many state employees and union members are disputing the numbers in the report. The Detroit Free Press said that Snyder called the report a 'call to action':
"Here are the facts; let's solve the problem," he told 430 people who attended the Business Leaders for Michigan Summit in Lansing. "Now we can have an intelligent discussion about what we need to have to put the state on the road to success."
Snyder is expected to release his budget proposal for the state's next fiscal year on February 17th.
Red Cross looking for blood
Bad winter weather has hampered the Red Cross' blood supply. They've made pleas before, and now with a big storm bearing down on the Midwest, they're renewing those pleas. Monica Stoneking, communications manager for the American Red Cross, was quoted in today's Bay City Times:
"Those who live in the path of the storm are asked to schedule a donation time when it is safe to travel," Stoneking said. "All blood types are needed, but there is a special need for donors with O-Negative and B-Negative blood."
The Red Cross says 18,000 expected blood donations have gone uncollected over the last several weeks due to bad winter weather.
He said the overall compensation of the average private sector workers fell 13% from 2000-09 while rising 19% for state employees and 13% for local government workers. For state workers, the average annual compensation -- $53,453 in salary, $31,623 in fringes and $13,000 for insurance-- was more than twice that of the private sector, the report said.
The governor was quoted as saying, "I'd be careful about over generalizing on this data but it does show an important trend that needs to be addressed."
Rick Pluta from the Michigan Public Radio Network reports:
Public employee unions and advocates for human services question some of the data used in the report. They also say they’d like to see Snyder’s plans for investing in schools and infrastructure, as well as protecting people hurt by the economy.
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.
Governor Snyder makes no bones about wanting to get rid of the Michigan Business Tax. Some details of his plan were revealed today.
But by getting rid of the business tax, the state will be left with $1.5 billion tacked onto its existing projected deficit for the next fiscal year.
Today, the Governor spoke to the Michigan Press Association at the Detroit Marriott. In his speech, he addressed how he plans to make up the shortfall.
From the Associated Press:
Gov. Rick Snyder says he wants to include most tax breaks in the budget rather than burying them in the tax code...Snyder says it's imperative to get rid of the Michigan Business Tax, which he considers "a dumb tax." To make up the revenue lost by having a lower corporate income tax, he wants to look at existing tax breaks and get rid of those that aren't moving the state forward. The governor says tax breaks should be included in the budget so they can be debated and weighed on their merits.
The Detroit Free Press reported on Snyder's speech as well. The Governor said that one of the "biggest tasks as the chief executive of the state is to find the elusive “they” in state government." From the Freep:
Snyder said his first days in office were a revelation. “The IT guys were in hooking up my computer and I had a square screen,” he said, explaining that it didn’t make sense because the larger, landscape computer screens are better and less expensive. “They told me ‘It’s been 10 years and they said that’s what we had to do,’” Snyder said the IT guys told him. “Almost on a daily basis, I hear about ‘they’ and they tend to have a different opinion that I have. I need to find out who they are and where they reside.
"We have some districts where 18% to 20% of the people are filers of this, and they’re putting multi-millions of dollars back into small businesses. So we kind of need to ask people to see this up-close and personal and to really be open to understanding what this is all about."
Republican House Speaker Jase Bolger says the state cannot afford the Earned Income Tax Credit right now:
“The Earned Income Tax Credit is very new in Michigan. It didn’t exist a couple of years ago. It was added at a time where I believe we couldn’t afford it. So as we look at how we are going to revamp Michigan and how we are going to move forward, we have to evaluate things that we can maybe no longer afford, however we do have to look at that with a broader tax structure, and we have to understand that the best social program is a good-paying job.”
Bolger says eliminating the Earned Income Tax Credit will be part of a large package of reforms that are expected to be introduced soon in the House.
Supporters of the tax credit say they have a lot of work to do to convince lawmakers that getting rid of it would hurt people in their districts.
Retailers say they are more hopeful than they’ve been in many years that Michigan is close to repealing the law that requires them to put a price sticker on every item they sell. But unions and Democrats say they will put up a fight to preserve what they say is a significant consumer protection.
James Hallan is the president of the Michigan Retailers Association. He says store-owners were pleased to hear in Governor Rick Snyder’s State of the State address that he is on their side. And Hallan says retailers hope the Legislature’s large Republican majorities will go along with scrapping the 35-year-old law.
“We have a new administration that is progressive. We have a legislative body that is progressive, and technology has come a long ways from where it was in 1976. Cell phones were not around in 1976. You look at all the new technology, and it’s time we embrace this and not walk away from it."
“What we’re hoping is our Republican governor and our Republican majorities in the House and the Senate will listen to consumers and members of their community and when they look to change this law, do it in a way that voters are comfortable with and do it in a way that protects consumers and protects jobs.”
Employee unions say the law remains popular with the public for a reason and, if anything, the item pricing law should be more strongly enforced.
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.
In the world of corporate business, bonuses, perks and cash incentives rule the day. They're used to drive productivity.
Governor Snyder, a former corporate president, is bringing that mentality to Lansing.
Now, he says he wants to reward local governments that find better, cheaper ways to provide services.
Rick Pluta, of the Michigan Public Radio Network, says Snyder's budget proposal will call for cash incentives that encourage cities and townships to innovate.
Rick filed this report saying the Governor's announcement was a small bit of welcome news to local officials bracing for more budget cuts from the state:
Governor Snyder outlined his idea at a drop-by with local government officials meeting in Lansing.
He says local governments provide most of the services that people use, and the state should reward the ones that find ways to consolidate, cut costs, and innovate:
"So it's really to create an environment to say, here's a positive incentive to be the very best...so people first and foremost in Michigan and then people around the country and the world will look at Michigan are going to look and say, these people have their act together, this is the place to be, this is the place to have your kids grow up and succeed."
The governor provided few details.
He says those will wait for his budget proposal next month, and a special address on government reform that he will deliver in March.
The farm lobby has been pushing hard to increase the amount of ethanol allowed to be mixed into gasoline. And it seems like the Obama Administration is obliging.
The vast majority of today's ethanol comes from corn. The alcohol is mixed in gasoline to make it burn more cleanly.
Right now, the standard is 10% (a 10% ethanol, and 90% gasoline mix is most likely in your gas tank right now).
The EPA increased the allowed amount of ethanol to a 15% mix last fall for cars made after 2007.
Now, the Associated Press reports the EPA is poised to allow the 15% mix for more cars. From the AP:
Two people familiar with the decision said late Thursday the agency is expected to announce on Friday that 15 percent ethanol in gasoline is safe for cars manufactured between 2001 and 2006. Both officials requested anonymity because they were not authorized to speak publicly about the decision.
Republicans and Democrats say they're encouraged by what they heard from Governor Rick Snyder last night. The Republican delivered his first State of the State address to a joint session of the legislature in Lansing. Laura Weber sent this report:
Democratic lawmakers say they are eager to work with Governor Snyder on many of the issues he brought up, but their optimism is tempered with caution.
They say they’re waiting for Snyder’s budget proposal in February. "At this point the voters have given him the ball, he needs to advance it up field, and I think the next big play will be on February 17th where we’ll really get to see what their priorities are and how they’re going to balance the budget," said Democratic Senate Minority Leader Gretchen Whitmer.
Republican lawmakers say they are most eager to work with Snyder to reform or eliminate Michigan’s complicated business tax.
Update - 1/19/11, 8:58 p.m.:
For those wishing to keep track of the goals laid out in the State of the State address, Governor Snyder announced a new website. The "Michigan Dashboard." The information on the website claims to tell you "how the state performs in areas that affect you and your family."
Update - 1/19/11, 8:20 p.m.:
Here's the audio of Governor Snyder's State of the State address: