KEY LEGISLATION:
Budget Experts Forecast More Deficits
State fiscal experts predicted deficits of between $800
million and $1
billion in the 2004-05 budget year that begins October 1. The projections,
based on the Consensus Revenue Estimating Conference’s finding
that the
General Fund will see no revenue growth in the new fiscal year, will
once
again put the governor and legislature to the test regarding how to
balance
the state budget—through cuts to state services, increased taxes
and fees or
a combination of the two.
Governor Jennifer Granholm indicated she favors striking
a balance between
defining Michigan as a low-tax state and ensuring the quality of life
it
offers its citizens. She compared it to a corporation producing a
product—one that is cheap with a low price or one with more quality
at a
high price. When low prices and quality are properly balanced, the consumer
finds a good value in the product.
Legislative Democrats said they didn’t believe
the budget could withstand
another $1 billion hit without additional revenue. In contrast, Senate
Appropriations Chair Shirley Johnson (R-Royal Oak) said she would like
to
see the legislature make cuts, especially in the areas of revenue sharing
and higher education. House Appropriations Chairman Marc Shulman (R-West
Bloomfield) echoed her comments and said revenue enhancements would
be the
last option.
Legislature Returns—Budgets Dominate Early Work
After nearly a month-long break, the House and Senate
returned to Lansing to
focus on the Revenue Estimating Conference findings and to attend their
party caucus retreats. The real work will begin after Gov. Granholm
delivers
her State of the State Address on January 27 and submits her proposed
2004-05 budget on February 12.
Rep. Shulman said the appropriations subcommittees will
review department
budgets starting February 17 and report them to the full Appropriations
Committee by March 18. Full committee action will take place March 22–26,
with floor action scheduled for March 29–April 2, immediately prior
to the
legislature’s spring break. The budgets will then be sent to the
other
chamber for work to be completed by May 28. Final conference committee
reports are to be completed by June 11.
Sen. Shirley Johnson expressed her desire for the legislature
to go
"line-by-line" through the budgets, a departure from recent
years when the
budget was mainly a summary of department expenditures and services.
GOP Seeks Income Tax Cap
A proposal to cap the state income tax at 3.9 percent
is on a fast track in
the legislature; House Republicans are pushing the proposed constitutional
amendment with the support of Speaker Rick Johnson (R-LeRoy). In order
for
the legislation to become law, it would need to pass with a two-thirds
majority in the House. That would require the votes of at least 11 House
Democrats—an unlikely scenario.
The tax rate is scheduled to drop to 3.9 percent from
the current 4.0
percent on July 1. It had been scheduled to drop on January 1, 2004,
but was
delayed six months as part of a budget-balancing deal struck in December
to
avoid more spending cuts.
Democrats are calling the proposed cap an election-year
gimmick.
Nevertheless, Johnson said he plans to have the House take a vote on
the
issue as early as next week. Senate Majority Leader Ken Sikkema (R-Wyoming)
indicated that if the House passes the legislation, the Senate would
take
the bill up right away.
Legislator Becomes Dearborn Heights Mayor
Rep. Daniel Paletko (D-Dearborn Heights) resigned from
the House in order to
serve as mayor of Dearborn Heights. Paletko, who served on that community’s
city council for two decades before being elected to the House, was
chosen
by the council to become mayor.
Gov. Granholm will call a special election to fill the
vacancy. The district
has only a 52-percent Democratic base and could be ripe for a Republican
victory in a special election. Paletko defeated his Republican opponent
by
681 votes in the last election.
KEY BILL INTRODUCTIONS:
No bills to report at this time.
To view the content and current status of retail-related
bills, visit BillTrack,
MRA's legislative tracking database exclusively for members, at
www.retailbilltrack.com
If you are currently receiving Capitol F@cts by fax
and would like to receive
it via e-mail, please contact Kathleen Wilson at 517.372.5656 or
kawilson@retailers.com.
For back issues of online Capitol F@cts, visit MRA's main Capitol F@cts page.
Specific comments or questions regarding this bulletin
should be directed to:
Kathleen Wilson, Administrative Assistant to the Governmental Affairs
Office at
kawilson@retailers.com.
Michigan Retailers Association
603 South Washington Avenue
Lansing, MI 48933
517.372.5656
Toll-Free: 800.366.3699
Fax: 517.372.1303
govt_affairs@retailers.com
www.retailers.com
www.mallofmichigan.com
