Politics & Government

Proposals to require public employees in Michigan to pay at least 20 percent of their health insurance costs have advanced in the state Legislature, the Associated Press reports. From the AP:

A Republican-led Senate committee approved the measures Wednesday on party-line votes. Republican Sen. Mark Jansen of Kent County's Gaines Township says the measures could come up for votes on the Senate floor later this month.

The legislation would affect employees with the state, local governments, public school districts, public universities and other public employers.

Republicans say the measures are needed to help public employers control costs. Democrats say health care costs should be bargained in contracts.

Local units of government could exempt themselves from the act by a two-thirds vote of its governing body.

 The legislation is Senate Bill 7 and Senate Joint Resolution C.

There’s one thing everyone has agreed on ever since Rick Snyder burst on the scene less than a year and a half ago.

The man is not a politician.

Before he announced he was running for governor, Snyder’s name was barely known to anybody in political circles. He had never  been involved in politics at any level. When he began running his famous “nerd” commercial during last year’s Super Bowl, the verdict from the experts was clear: Clever commercial. Catchy concept.

Calling yourself a “tough nerd” might work in some sophisticated high-tech west coast place. But not in lunch-bucket, brawling, blue-collar Michigan.

And we all knew that Snyder’s lack of political sophistication will eventually do him in. That seemed to be confirmed when he began ducking most of the primary campaign debates. Not ready for prime time. Yet the non-politician won the Republican primary easily last August, leaving a prominent congressman and the state attorney general in the dust. The general election wasn’t even a contest.

Snyder, GOP Leaders Come to Tax Agreement

Governor Rick Snyder and Republican leaders in the state House and Senate outlined a tentative tax agreement yesterday afternoon in Lansing.  The plan includes a compromise on taxing retiree pensions. From Rick Pluta:

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.

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.

Bing Outlines Budget

Mayor Dave Bing proposed his budget for Detroit yesterday. The mayor warned that the city’s unions will have to make contract concessions in order to keep Detroit out of the hands of a state appointed Emergency Financial Manager. The city is facing a $155 million budget deficit. Bing said the deficit could grow to over a billion dollars in the next five years unless cuts are made now. Bing proposed $200 million in cuts and revenue in his budget proposal.

New Auto Jobs

The Detroit Three are poised to create new auto jobs for the first time in years, Tracy Samilton reports.  But, Sean McAlinden, an economist at the Center for Automotive Research, says auto manufacturing jobs will never recover to their former levels. McAlinden says the Detroit Three will likely hire 35,000 people in the next five years. That’s only about a third of the people who lost jobs with the auto companies in the past few years.

Thousands of teachers, public employees and their supporters are expected to protest at the state Capitol today.

Organizers say a rally scheduled for Wednesday could be the biggest yet for the state's current budget cycle, the Associated Press reports. From the AP:

Michigan AFL-CIO President Mark Gaffney says Republican Gov. Rick Snyder and lawmakers are moving ahead too quickly with budget plans.

Unions are upset about proposals they say would undermine collective bargaining rights. Other groups are upset about proposed cuts to education funding and other programs.

Snyder has said the protests are part of the democratic process.

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.

West Michigan had the most population growth in the last ten years, while the east side of the state saw the biggest regional population declines in the state. That’s according to state demographer Ken Darga. He testified before a state House panel on redrawing Michigan’s legislative and congressional districts.

Detroit is expected to lose a few seats in the Legislature after Michigan’s political maps are redrawn. The city saw a 25 percent decline in population since 2000. State demographer Ken Darga says it’s unclear right now how political clout will shift around the state:

“We’ll have to see how the numbers—how the districts are drawn. It certainly does though, it does increase the political clout of areas that are growing, and decrease the political clout of areas that are declining in population.”

The state’s political maps need to be redrawn before this fall. But some Democrats fear Republicans will force the redistricting process through this spring. They say they hope the process is open and fair, and they say the only way to do that is to take time to draw the new lines.

Governor Rick Snyder and Republican leadership in the State House and Senate appear to be close to a deal on the budget.

From the Associated Press:

Gov. Rick Snyder and Republican state lawmakers are reporting "significant progress" on proposals related to business and pension taxes for the fiscal year starting in October...

Two people with knowledge of the talks tell The Associated Press that the proposals include many elements of Snyder's original business tax plan. They spoke on the condition of anonymity because the deal hasn't been finalized.

The Republican governor wants to replace the state's main business tax with a 6 percent corporate tax applied to corporations with shareholders.

The plan would include taxes on pensions and other retiree income but it would be modified from Snyder's original proposal. The new proposal calls for phasing in or scaling back the tax.

Some lawmakers have been loathe to accept any taxes on pensions, but it appears a plan to phase in a pension tax may be more palatable.

Peter Luke of Booth Newspapers reports on some of the details of the agreement:

Under the phased-in alternative, the status quo would apply to those 67 and up, whose pensions would continue to be tax exempt.

A middle group of retirees 60 to 66 would be subject to a pension tax, but the first $20,000 of pension income for single filers -  $40,000 for joint filers - would be tax exempt.

Those younger than 60 would pay tax on all their pension income.

An AARP spokesman said they remain opposed to a tax on pensions, whether its phased in or not.

A public announcement of the agreement is expected to come this afternoon.