November 27, 2006
SBT Replacement
Could Be Decided During Lame Duck
Finding a replacement plan for the Single Business Tax (SBT) and the
$1.9-billion budget hole it will create has not been considered a pressing
issue, as the current tax does not phase out until Dec. 31, 2007. Most
expected the next legislature to tackle the issue early in the new year.
Against expectations, however, Governor Jennifer Granholm has called
for lawmakers to take care of this issue prior to adjournment of the
current session.
It’s surprising that the governor, not the lame-duck legislature,
is calling for the quick fix. Come January 1, Granholm will be in a
better position to get more of what she wants, as the House will be
under Democratic control. Still, she plans to roll out the administration’s
new proposal on Wednesday during a Senate Finance Committee meeting.
MRA will meet with State Treasurer Bob Kleine on Tuesday to go over
details of the proposal. Key to retail will be:
• Keeping cuts to personal property tax small. Too large a cut
clearly favors manufacturers over retail as a result of their heavy
investment in equipment;
• Making sure the tax is based on profits, not gross receipts,
as retail operates on a very slim profit margin compared to manufacturing
and other industries;
• Ensuring that the rate of taxation applied to retailers is less
than that applied to other industries. The Michigan Chamber of Commerce
plan calls for a .24 rate for retail vs. a .48 rate for all other industries.
It remains to be seen whether the governor can get a replacement tax
plan through the legislature in such a short period (the lame-duck session
may be as short as nine days or last until Dec. 29). MRA will make sure
that retail has a seat at the table so that whatever emerges, at whatever
time, it will be as beneficial as possible to retail.
Election Recap
As previously reported, the Nov. 7 election brought much change to the
Lansing political landscape. With Gov. Granholm cruising to victory
with a much greater margin than expected, the “coattail” effect
extended down to the state House, where Democrats took control of that
chamber.
House Republicans saw their 58-52 majority reversed to a 52-58 minority.
It had been expected that they might lose one or two seats, but few
predicted the GOP would lose control.
Senate Republicans held off a challenge by Democrats, losing only one
seat and holding onto their majority at 21-17. After a tense leadership
election on Nov. 14, Sen. Mike Bishop (R-Rochester) will become the
new Senate majority leader in the next session, taking over for term-limited
Sen. Ken Sikkema (R-Grandville).
On the Democratic side, Sen. Mark Schauer (D-Battle Creek) will take
over as minority leader for term-limited Sen. Bob Emerson (D-Flint).
With the House going Democratic, Speaker Craig DeRoche (R-Novi) will
relinquish his position in January. He was elected House minority leader
by his colleagues.
Speaker-elect Andy Dillon (D-Redford) will take over for DeRoche. His
election is seen as an attempt to hold onto a Democratic majority in
2008, as he is a moderate, business-friendly Democrat who works well
with the other side of the aisle.
The key leadership positions for 2007:
Governor Jennifer Granholm
Lt. Governor John Cherry
Atty. General Mike Cox
Secretary of State Terry Lynn Land
Senate Majority Leader Mike Bishop
Senate Minority Leader Mark Schauer
Speaker of the House Andy Dillon
House Minority Leader Craig DeRoche
Senate Appropriations Chair Ron Jelinek
House Appropriations Chair George Cushingberry, Jr.
KEY BILL INTRODUCTIONS:
No new key bill introductions to report
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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
