Michigan Watch

The Michigan Freedom of Information Act is 34-years-old this month.  According to a ranking by the Better Government Association, it’s one of the stronger Freedom of Information laws in the United States. 

Governor Rick Snyder’s budget proposal would change how we fund public schools. That change would start with a cut to schools at a time when the School Aid Fund is growing.

The School Aid Fund is one of the main sources of money for K-12 public schools. Since it was established by the 1908 Michigan Constitution and even though in the 1963 Constitution “higher education” was added, the money in the School Aid Fund only has been used to pay for educating public school children. That is, until this year. 

The last legislature ‘borrowed’ a couple of hundred-million dollars from the School Aid Fund to give to community colleges. I say ‘borrowed,’ but there’s no indication that it’s going to be paid back.

Federal stimulus money helped make up the difference. But for this coming fiscal year, there is no more federal stimulus money.

It was only a few months ago that Republican Rick Snyder and the majority Republican legislature were voted into office. Snyder said on the campaign trail that he wanted to change the way state government works.

He promised to “re-invent” Michigan.  People liked the sound of that.

As he’s revealed the path to his vision of Michigan, not everyone is pleased. 

(sound of protestors in capitol)

Union members, Democrats, public employees, retirees and the poor have been holding rallies at the capitol about as often as the legislature meets in Lansing.

When the budget was introduced, it was left to Lieutenant Governor Brian Calley to explain some of the details.  Among them was the Governor’s proposal to eliminate the Earned Income Tax Credit, a move that would take away a tax break for the state’s working poor.

When he presented his budget to the legislature, Governor Snyder explained part of the shared sacrifice would be taxing public and private pensions.  There is no state income tax on pensions right now.  The Governor noted, retirees still use government services.  He also said there are some retirees who are still working, paying the current 4.35% in state income taxes.  He said taxing pensions is a matter of fairness to people of retirement age who are still working.

Update 12:21 p.m.

The State of Michigan will have to honor some tax credits for years to come because of contractual obligations.  In a speech today, Governor Snyder indicated over the next four years, the state was on the hook for $2-billion dollars in credits.  About $500-million of that is in next year's budget. 

March 2nd, 8:23a.m.

Governor Snyder says his approach to taxes in Michigan is “simple, fair, and efficient.”  One way the Governor wants to make the tax structure more fair is by eliminating all tax credits for business.  It’s a controversial move which surprised many people in Lansing.

For eight years, year after year, the state of Michigan has been cutting the money it distributes among the 15 public universities.

“We haven’t been chiseling around the edges.  We haven’t been making minor adjustments.  We’ve been really making huge cuts.”

You can talk about tax structure and decisions by governors and legislatures in the past, but above all, the state's financial difficulties have to do with the economy.  

Because Michigan has been heavily reliant on manufacturing, specifically the automakers and their many suppliers, Michigan has been hit especially hard.

Mitch Bean is the Director of the House Fiscal Agency.  Basically, he’s one of the economists who keeps the legislature informed about the economy and the state’s budget.

Nationwide and in Michigan the rate of foreclosures has slowed a bit in recent months.  But Realty Trac experts say that’s less a sign of a robust housing recovery and more a sign that lenders have become bogged down.  They’re reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing, the so-called robo-signing scandal.

Since producing a Michigan Watch series on the "hydraulic fracking" boom in Michigan last September and October on Michigan Radio, not much has been said or done about this method of drilling for natural gas.

A leak has now put the issue back in the news.

The Associated reports a leak has shut down a drilling operation not too far from Traverse City.

It's not yet clear whether it will damage underground water sources.  It does raise questions as to whether Michigan regulations are adequate to protect the environment while exploiting the gas reserves in the state.

When the Governor gave his State of the State speech, I was standing on the crowded floor of the House of Representatives.  Governor Rick Snyder outlined his plans to get Michigan back to work.  We all listened as he said the Michigan Economic Development Corporation would lead the way.

“The MEDC will recalibrate its efforts and become a better partner with these regional groups to enhance economic gardening, talent enhancement, and support service to companies.”

I was sifting through the many reports by Gongwer News Service.  Gongwer covers just about everything that happens in and around the Lansing capitol complex.  What caught my eye was an article entitled "State Estimates Tax Expenditures of $33.8 Billion for FY'11." 

I read through the Gongwer story which linked to a 111-page report by the Michigan Department of Treasury.

There are close to 10-million people in Michigan.  And almost three-million are now receiving some kind of state assistance.  Half of them are children.

“A lot of them are my next-door neighbors.  It’s bad in Michigan right now.  And people are in a position where they’ve never been," says Becky Clark, who works with the Michigan Department of Human Services in Lenawee County.

The money the state sends to local governments is called revenue sharing.  But "sharing" might not be quite the right word.  It’s actually a promise, a deal the state made with the towns we live in. 

Summer Minnick is with the Michigan Municipal League.  It represents the interests of the cities, villages and townships to state leaders.  She says decades ago, local governments gave up the power to charge their own sales tax to raise money.