Fingers Pointed Over Pending Shutdown
What appears to have been a loose plan to raise revenue by putting a
sales tax increase on the ballot and immediately passing a temporary
income tax hike fell apart Thursday, sending budget negotiations back to
square one with the state's legislative leaders broaching who will be to
blame for a possible government shutdown. 

As with so many supposed almost-deals this year, it's an open question
whether the plan could have ever been classified as firm. At one point
this evening MIRS asked a well-placed source if the plan included how
the teacher retirement reforms and additional budget cuts would be
tie-barred together. The simple answer was that talks had never
progressed that far. 

One thing that appears to be clear is that the Senate was hoping the
House would send them a bill to put the sales tax hike on the November
ballot, and House Republicans were also laboring under the assumption
that there would be a tax hike vote in the House tonight. But when it
became clear this wasn't going to happen, at about 10 p.m., the Senate
abruptly adjourned, and House Republicans got angry. 

Meanwhile, the House stayed in session a little more than an hour
longer, as House Speaker Andy DILLON
<>  (D-Redford Twp.) took a
few verbal swipes at Senate Majority Leader Mike BISHOP
<>  (R-Rochester), accusing
the Senate Leader of walking away from a proposal that would have kept
the budget talks moving ahead. Then Bishop defended his position, while
trying not to insult Dillon, but took verbal swipes at Senate Minority
Leader Mark SCHAUER <>
(D-Battle Creek). 

Adding a little more angst to the entire debacle, House Minority Leader
Craig DeROCHE <>  (D-Novi)
accused Dillon of bad faith, for not taking up a tax hike, and trying to
steer the state toward a shutdown. 

Bishop blamed the fallout on Schauer as he walked past reporters and
encouraged them to ask Schauer about a plan that was so complex he
couldn't even explain it. 

Schauer punted the details to Dillon, who explained his plan, which may
have been developed somewhat late in the day, to put two vehicle bills
(one on a sales tax hike, the other on an income tax hike) into
conference committee and send them out with both the sales tax increase
and the temporary income tax increase. 

MIRS asked if the plan would have required Republicans in the House to
vote for a tax hike. 

"No," Dillon said. "You need to have Republican votes in the Senate to
do anything, but this could have been done basically on a party line
basis." (Apparently because the bills wouldn't represent tax hikes when
they were initially voted on.) 

"What about reforms, are they a part of the deal?" MIRS asked. 

"I can do the reforms myself," Dillon said. 

One thing both Dillon and Bishop did agree on tonight is that Bishop
turned down the idea. 

"There's no way we would ever do that," Bishop said. 

Dillon told reporters on the House floor that today was a "step
backward" in the budget process, and claimed Bishop's refusal to go for
the plan was just the latest roadblock the Senate Majority Leader has
put in the way of finding a budget compromise. The Speaker also broke
away from his longstanding demeanor of refusing to attack Bishop. 

"I've been chasing Mike Bishop to try to get a budget deal since
February," Dillon said. "All I've asked of Mike is to 'tell me what you
want.' But he'd never say anything definitive. When I offered the
proposal today, he said 'I can't do that.' If there's a government
shutdown, the responsibility for it is Mike Bishop's." 

For months the story has been that Dillon and Bishop have been getting
along great - and have productive discussions. But tonight Dillon said
he was breaking his silence on the alleged budget deal Bishop claims
didn't happen in May. 

"He (Bishop) cut a deal in May with the Governor that did include new
revenues," Dillon said. "We weren't supposed to talk about so I haven't
up to now. But yesterday Mike Bishop went too far when he made some
remarks (the fetal position statement) about the House. He went over the
line. I'm not going to keep getting punched by him." 

The Speaker also remarked that the House was sill in the chamber and
ready to work through the weekend if necessary, but the Senate had

"Mike Bishop has a golf outing to raise funds," Dillon said. 

During the final House Democratic closed-door caucus, Bishop entered the
House he said, just to see what was going on. 

MIRS told Bishop that the Speaker claimed he'd crossed over the line
with Wednesday's fetal position remark. 

"He's right, I probably shouldn't have said that," Bishop said. "I have
apologized to him for that. It's something I shouldn't have said. That's
not my style." 

Then MIRS asked about Dillon's statement that he'd been chasing Bishop
since February trying to get a deal. 

"I don't now how to respond to that," Bishop said. "That's so far from
the truth. Look, the Senate Republicans are the ones who have actually
shown on paper how we could balance the budget without a tax increase.
We've actually passed cuts and reforms. If the House Democrats don't
agree then they should do their own plan and send it over. But they
still haven't done that. If there's a government shutdown I don't see
any way the Republicans can be blamed." 

Bishop also stressed that he has had constructive discussions with

Earlier in the evening Dillon had referred to the teacher retirement
reforms as "measly" and not representing anything that immediately
affects the budget. MIRS asked Bishop if Dillon has ever offered any
budget proposals that included reforms. 

"Actually, he has - yes," Bishop said. "But they've always been pie in
the sky." 

Another problem Bishop said he had with Dillon's two-bills to conference
committee plan was that he thinks it was unconstitutional. 

The income tax hike vehicle bill involved was a Sen. Patti BIRKHOLZ
<>  (R-Saugatuck) bill
providing for a breast cancer check off. Bishop says he believed it
would have been unconstitutional to use the bill as Dillon suggested
because it would change the purpose of the bill. 

"There's no way in the world we could ever agree to it," Bishop said. 

Tying a revenue hike to a Senate bill is also a major issue. Senate
Republicans have repeatedly said they don't want the revenues coming out
of the Senate. Bishop said his members have already had to take hard
votes and, by agreeing to originate some kind of revenue increase, the
House would finally do the same. 

"In this case the House has not put a single tough vote up," he said. 

Bishop said he also doesn't want revenue increases put up behind closed
doors, away from the public eye. 

As Schauer was telling the media that there was a deal that was
"disregarded," Bishop walked by, pointed at Schauer and told the media
to ask him what his plan is. A visibly hot Bishop continued into the
hallway where he laid into Schauer, but didn't directly insult Dillon. 

Though the Legislature missed today's deadline that would have allowed
it to put a pick-your-poison proposal on the November ballot, it can
still shoot for the January ballot. 

Bishop told reporters that he preferred the November date to the January
date because he didn't want the tax increase to come out in March, which
is already several months into the budget cycle. 

Before today's shenanigans, Senate members walked over to the House and
mingled with House members, apparently trying to get them to move on
some kind of revenue increase. Senate members remained on the floor for
roughly 10 minutes and were then kicked off by the Democrats, after Rep.
Alma Wheeler SMITH <>
(D-South Lyon) requested that Sergeants at Arms clear the visitors from
the floor. 

House members told MIRS afterwards that it did not appear that all of
the senators had a united message to pass on to their House colleagues.
Curiously, Gov. Jennifer GRANHOLM
<>  was lobbying House
members when the other unexpected guests showed up. 

The House did conduct some business during session today, zeroing out or
not concurring with changes to budget bills so they can be sent to
conference committees. However, when it became obvious that House
Democrats were not going to take a vote on a tax hike, DeRoche and
Dillon had a heated exchange that was out of earshot from reporters,
although TV cameramen tried to catch it on film. 

Afterwards DeRoche told reporters he had agreed to hold back Republican
amendments, to help clear the budget bills out of the way and facilitate
the Democrats taking a vote on a tax hike. MIRS learned that some of
those GOP amendments were about the same sex benefit issue and the
illegal alien issue that gave Democrats so much trouble two weeks ago. 

"This was about trust and relationships," DeRoche said. "We agreed to
hold back amendments to help out with the understanding that they (the
Democrats) were going to fund their budgets (vote for a tax hike). They
should either fund their budgets (the House budgets have been long on
spending increases) or make cuts." 

"This is about the Speaker moving us to a shutdown," DeRoche added. "The
Governor has at least offered a budget, the Senate has offered a budget,
but the House Democrats haven't done anything but posture." 

When reporters asked Dillon about DeRoche's comments, the Speaker noted
it's been known for some time that at least 10 Republicans would have to
vote for a tax hike to get it out of the House. 

"The budget solution has to be bipartisan," Dillon said. "[And] I told
Rep. Richard BALL <>
(R-Bennington Twp.) we weren't going to vote on a tax increase three
hours ago." 

Dillon then went on to explain his proposal to send the two vehicle
bills into conference committee. 

At the end of session today, it was announced that the house would meet
again at 3 p.m. Friday. This was apparently so the Democrats would be
able to claim the House met, while Bishop was golfing. Unofficially,
House Majority Floor Leader Steve TOBOCMAN
<>  (D-Detroit) let members
know there would be no voting or attendance taken at Friday's session.



Senate Passes Budgets Without Funds
The Senate moved all eight House-originated budgets today after
stripping the budgets of all funding (See "MBT 'Fix' Leaves Senate
<> ," 9/5/07). 

The bills were passed with the understanding that whatever points of
difference may exist between what the Senate really wants to do with the
budgets and what the House proposed could be ironed out in conference
committee. The budgets in question include the state's big-ticket items
- Corrections, School Aid, Universities and Community Health. 

The strategy helps Senate Republicans in that they don't have to reveal
budget plans that either require additional revenue or cut budgets so
deeply as to translate into nasty hometown headlines or future campaign

The majority of Democrats said they couldn't support the empty budget
bills, regardless of promises that they be filled. 

"I say that I believe that I have some responsibility to represent
citizens in my district and I believe that each of us are giving up that
right if we pass this bill," said Sen. Deb CHERRY
<>  (D-Burton) after the
Senate passed a zero-budget Department of Community Health (DCH) bill
(HB 4344
-HB-4344> ). 

Sen. Roger KAHN <>
(R-Saginaw) included boilerplate in the budget for vaccination funding,
an early mental health intervention pilot, nurse family partnership
program funding and in-home services funding. 

This budget, as well as the majority of the other seven budgets, passed
24-14 with Sens. Mickey SWITALSKI
<>  (D-Roseville), Jim BARCIA
<>  (D-Bay City) and John
GLEASON <>  (D-Flushing)
voting yes with Republicans. 

Switalski said he voted in favor of the bill because he doesn't want to
slow down the process. 

The Department of Education (MDE) bill (HB 4346
-HB-4346> ) didn't get through without Sen. Gilda JACOBS
<>  (D-Huntington Woods)
attempting to add a placeholder for the Detroit Zoo to the bill. This
amendment got defeated, but the Senate agreed to a Sen. Hansen CLARKE
<>  (D-Detroit) amendment
that would require an audit on the Detroit School District to make sure
money's being spent wisely. Sen. Irma CLARK-COLEMAN
<>  (D-Detroit) was the only
no vote on this roll call amendment. 

The MDE bill passed 25-13 with Clarke joining the other Dems who voted

Sen. Liz BRATER <>  (D-Ann
Arbor) tried to add placeholders for mental health services onto the
corrections budget (HB 4348
-HB-4348> ), but these amendments failed. Sen. Martha G. SCOTT
<>  (D-Highland Park) put
forth her yearly attempt to get funding for testing state prisoners for
Hepatitis, but this failed as well. 

The Higher Education bill (HB 4350
-HB-4350> ) passed with an amendment that requires all higher education
institutions that receive state funding to submit to an independent
audit of their expenditures. 

(R-Monroe) successfully added an amendment to the School Aid Fund bill
(HB 4359
-HB-4359> ) that requires districts to give an annual update on
expenditures. A Sen. Nancy CASSIS
<>  (R-Novi) amendment
allowing districts to set up funding for K-3 students also made it on
the bill. 

Sen. Mike PRUSI <>
(D-Ishpeming) got an amendment added to the Department of Natural
Resources (DNR) bill (HB 4354
-HB-4354> ) that would provide funding for the now more than $6 million
fire in the Upper Peninsula 

The Department of Environmental Quality (DEQ) budget created a little
back and forth between Brater and Richardville. Richardville introduced
an amendment that would prevent the DEQ from forcing a cement plant in
Dundee to follow certain pollution rules. 

Richardville argues the company, which he said could close, already
follows environmental regulations. Brater said the company should follow
DEQ rules because there is technology that can reduce these pollutants.
Richardville's amendment passed.

These bills all passed 24-14. The Community Colleges budget (HB 4360
-HB-4360> ) and Higher Education bill (HB 4350
-HB-4350> ) also passed 24-14.