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 adjourned.

"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 Dillon.

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,"

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 material.

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).

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) 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 yes.

Sen. Liz BRATER (D-Ann Arbor) tried to add placeholders for mental health services onto the corrections budget (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) passed with an amendment that requires all higher education institutions that receive state funding to submit to an independent audit of their expenditures.

Sen. Randy RICHARDVILLE (R-Monroe) successfully added an amendment to the School Aid Fund bill (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) 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) and Higher Education bill (HB 4350) also passed 24-14.