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Oct 07

More Live Blogging Michigan’s Budget Crisis

Comments (1) 9:00 AM posted by admin |

UPDATED October 9, 2009 at 3:59PM

The following is a list of all of the updates from the City of Ypsilanti’s lobbyist Kirk Profit for the past week detailing how incompetent some of our leaders in Lansing still are.

From Kirk Profit, Tuesday, October 09, 2009 2:08 AM

Tonight, the House and Senate passed the conference report on the K-12 budget for 09’-10. In doing so, they reduced the amount of the cut to the foundation grant from an amount in excess of $200 to a drop of $165 per pupil. However, this takes that budget away from the “target” and takes it out of balance.

In order to restore the balance, the Senate passed two bills that would result in more revenue for the state. Specifically, the Senate moved legislation tonight which would diminish the film credits in the Michigan Business Tax, and delay the increase in the Earned Income Tax Credit (EITC). However, a brief informal survey of House Democrats indicates their opposition to the use of a delay in the EITC increase as a revenue source.

As a result, there is still considerable disparity between the House and Senate on:

  • Revenue to pay for the desired reduction in the per pupil foundation grant
  • Revenues for any of the other concerns that arose as a result of the budgets that were passed last week by the House and Senate (these would include revenue sharing, community health funding, department of Human Service program cuts, financial aid for higher ed. and community colleges, and others that we have described in earlier emails).

Additionally, the Senate Republican leadership and Senate Republican caucus members continue to be consistent in their statements that they will not vote for revenues (other than those described above for the K-12 budget) for the purpose of balancing the ’09-’10 budget — budgets they believe they have already balanced (in the budget bills passed last week by both the House and the Senate) under their no new revenues, all cuts approach.

Although the House has passed some revenue bills (bills to delay the increase in the personal exemption, a “shell bill” that would seek to increase the MBT by reducing a series of existing credits and deductions, and a bill to impose a physician QAAP), the Senate remains opposed to them. Furthermore, even those that have passed the House would be insufficient to achieve the goals of restoring many of the budget shortcomings we have described last week during the budget deliberations, and House and Senate voting.

So now, as the legislature adjourns for until next Tuesday, much remains unsettled. Will there be any restorations ?? and if so, by what revenues ?? and what will the Governor do with her veto power ?? Additionally, a wide variety of measures of “structural reform” that have been discussed for some time still remain as variables in this process.

The Government is operating under a 30 day extension that expires at the end of October. House and Senate leadership has indicated their confidence that there will not be another extension.

We will continue to stay engaged on your behalf – as always, contact us with your questions –


From Kirk Profit, Thursday, October 08, 2009 3:59 PM

The Governor will be releasing an Executive Order today which has as its primary purpose the combination of the Departments of Natural Resources and Environmental Quality. It also makes several changes to the organization of the Department of Agriculture.

More specifically, effective January 17, 2010, the Executive Order would:

New Department. Create a new Department of Natural Resources and Environment (“DNRE”) to protect and conserve Michigan’s air, water, and other natural resources.

Abolish DNR & DEQ. Transfer the powers, duties, functions, personnel, and resources of the existing Departments of Environmental Quality and Natural Resources to the new DNRE. Abolish the existing Departments of Environmental Quality and Natural Resources, reducing the total number of state departments to 16.

Director of DNRE. The Director of the Department of Natural Resources and Environment will head the new DNRE and will have the responsibility to develop and administer a new and more efficient management structure for functions previously performed by the Departments of Environmental Quality and Natural Resources. The Director will be appointed by the Governor with the advice and consent of the Michigan Senate and directly accountable to a statewide elected official.

Natural Resources Commission. The Commission of Natural Resources will be transferred intact to the new DNRE, but will be renamed the Natural Resources Commission (“NRC”). Commission members will continue to serve through the end of their existing terms and vacancies will continue to be filled by the Governor with the advice and consent of the Senate. Members appointed will be required to be knowledgeable about conservation and committed to scientific management of natural resources. The NRC will retain existing authority to regulate the taking of game, establish periods of validity for hunting and fishing licenses, and regulate the feeding of deer and elk, without review by, or appeal to, the DNRE Director. The NRC will assume functions currently performed by the Citizens Committee for Michigan State Parks and the Water Resources Conservation Advisory Council to further reduce administrative overhead.

Department of Agriculture. Maintain the Department of Agriculture as a separate principal department. As with the DNRE, the Director of the Department of Agriculture would head the Department of Agriculture and any future vacancy in that office would be filled by the Governor with the advice and consent of the Michigan Senate. The Director would be directly accountable to a statewide elected official. The Commission of Agriculture would continue perform other functions in an unchanged manner. To achieve additional administrative efficiencies within the Department of Agriculture, the Agricultural Preservation Fund Board, the Michigan Family Farm Development Authority, and the Pesticide Advisory Committee would be abolished. The Director would have continued authority to convene advisory workgroups.

Office of Racing Commissioner. Transfer the regulation of horse racing from the Office of Racing Commissioner in the Department of Agriculture to the Executive Director of the Michigan Gaming Control Board to assure adequate regulation of gaming activities, reduce administrative duplication, and abolish the politically-appointed position of Racing Commissioner.

Trails Advisory Council. Consolidate the functions of the existing Snowmobile Advisory Council and Michigan Trailways Advisory Council into a new 7-member Michigan Trails Advisory Council focused on the creation, development, operation, and maintenance of snowmobile, equestrian, hiking, skiing, and off-road vehicle trails, for more effective organization and reduced administrative overhead.

Environmental Science Boards. The Director of the DNRE will be authorized to convene 7-member Environmental Science Review Boards (“ESRB”) composed of persons with expertise in biological sciences, chemistry, ecological science, geology, risk assessment, and other related disciplines. ESRBs will advise the DNRE on scientific issues affecting the protection and management of Michigan’s environment and natural resources. Abolish the existing site review board process for greater efficiency in environmental proceedings.

Timely Permitting. Require the DNRE Director to continue efforts to reduce the time for the processing and issuance of environmental permits and related customer service practices with the objective of achieving best-in-class permit processing time and improved customer service.

Transition Manager. To assist in this transition the Governor has appointed Bruce Rasher as Transition Manager.

We will keep you posted as further action on this develops. And, as always, feel free to contact us with questions –


From Kirk Profit, Tuesday, October 06, 2009 8:35 PM

The bill has now passed with 56 votes; the House has ended it voting for tonight on revenues.


From Kirk Profit, Tuesday, October 06, 2009 8:35 PM

Correction on the last email update on revenue efforts by the House – they are still working to get the votes on the QAAP physician tax (they are several votes short in the Dem. caucus – no Republican votes are there for this). I will let you know on this when the final vote is tallied –

Sorry !! I got a little ahead of myself in anticipating the vote on this !!


From Kirk Profit, Tuesday, October 6, 2009 7:23 PM

The House is completing their voting on a package of bills that would raise approx. $223m in new revenue from the following sources:

1) HB 5384 – an across the board reduction in the credits and deductions contained in Michigan Business Tax – this yields approx $116m
2) HB 5352 – a suspension of the inflationary increase in the personal exemption on Michigan Income tax – this yields approx. $55m
3) HB 5386 – a new QAAP surcharge on physicians in Michigan – this yields approx $52.5m

These bills have passed the House on straight party line votes (all Republicans voting no, a majority of Dem.’s voting yes).

Other revenues are being considered by the House Dem. leadership, and action on them is anticipated in the near future.

In the meantime, the Senate Republican leadership is continuing its position of no new revenues will be considered as part of the continuing effort to resolve the full year budget for ’09-’10.

As we have indicated in previous communications, we expect October to be a very busy month as legislators and the Governor continue to search for a solution to the budget for the fiscal year that we are now in. You may recall that the Senate Fiscal Agency anticipates a budget gap of extraordinary proportions — and while this action by the House today is a start, there is no agreement with the Senate on any of this, and much more in revenue (or even more drastic cuts than what we saw in last week’s action) will be needed to respond to anticipated shortfalls. Remember, much of this budget is the beneficiary of the use of most of the stimulus $$ that that state has received. This will put even MORE pressure on the budget for next year.

We will continue to work to advance your interests; and as always, don’t hesitate to contact us if you have questions. This is clearly a long way from being resolved.

Stay tuned……….


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1 Comment »

  1. Comment by Ruth
    October 9, 2009 @ 12:06 pm

    It is so great that you are sharing this information–thanks.

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