MICHIGAN
REPORT

The Capitol Record Since 1906

REPORT NO. 161, VOLUME 48-- FRIDAY, AUGUST 21 2009

BISHOP: BUDGET TALKS SNAGGED AS EFFORTS CONTINUE

Negotiations to strike a deal on the 2009-10 fiscal year budget have moved into a phase where progress has stalled, said Senate Majority Leader Mike Bishop.

Still, Mr. Bishop (R-Rochester) told Gongwer News Service in an interview this week that lulls happen in the process.

"You'll hit those. In every negotiation, you'll hit a point where you plateau," he said. "But on any given day, it can bounce one way or the other. That's why you've got to keep the discussion and dialogue going."

Mr. Bishop's comments come after Senate Minority Leader Mike Prusi (D-Ishpeming) told Gongwer last week that budget talks had hit a "standstill" with the October 1 start of the fiscal year looming ever closer.

Governor Jennifer Granholm and legislative Democrats have said the state needs to raise new revenue on top of federal stimulus money to avoid excessive cuts to programs while Mr. Bishop and the Republican-controlled Senate have preferred the plan it passed to solve the $2.8 billion deficit through spending cuts and the stimulus funds.

Mr. Bishop said the negotiations with Ms. Granholm have covered all manner of possible tax increases.

Asked if the proposal Ms. Granholm reportedly has made to apply the 6 percent sales tax to entertainment and sporting event tickets came up, Mr. Bishop said, "We've had lots of discussions about various different things - wine, beer, water, air, who knows? But we've never had a serious discussion about all the ones that she's serious about. It just seems like, you know, you throw them all out there and then you can say, 'I warned you.'"

Granholm press secretary Liz Boyd declined to respond.

"Because the governor and the leadership have agreed to hold their conversations in confidence, I'm not going to respond to any characterizations the Senate majority leader has made about those conversations," she said.

Ms. Boyd said the governor and the Quadrant continue to have "constructive conversations" and everyone agrees on meeting the deadline to avoid a shutdown. Tempers have occasionally flared, but they are making progress, Ms. Boyd said.

And Mr. Bishop lambasted the proposed tax on event tickets. The issue is particularly notable for Mr. Bishop because he has three major entertainment venues in his district - the Palace of Auburn Hills, DTE Energy Music Theater and Meadow Brook Theater.

"It's one of the dumbest ideas that I've seen in this whole discussion," he said. "That hits families right in the pocketbook at a time when they can least afford it. People want to go to a ballgame, they want to go to the theater, they want to go to a live event. It's one of the very few things that we have right now to do as a family."

Mr. Bishop said, as he has many times, that there are no Senate Republican votes for a tax increase. But he said the Senate GOP is open to reducing or eliminating some tax exemptions if they are failing to generate economic growth and if the revenue they create goes toward reducing the hated Michigan Business Tax surcharge.

"That would be our ultimate goal," he said.

Ms. Boyd said the governor supports repealing the surcharge if other revenues can be found to replace the money it generates.

Despite a growing chorus of criticism about some of the possible spending cuts - there seemed to be at least one group protesting every day this week at the Capitol - Mr. Bishop said Senate Republicans stand by their plan.

But Mr. Bishop did appear to show willingness to negotiate on the controversial cuts the Senate-passed budget made to college scholarships. The Senate eliminated the Michigan Promise Grant to save $80.5 million, as well as sharply reducing funding for competitive scholarships, tuition grants and nursing grants.

Asked if Senate Republicans were steadfast on the scholarship cuts, Mr. Bishop said, "That's all part of negotiation. We as a caucus have always identified education as a priority. That was not easy. ... We did that with great trepidation. It was one of those realities that we had to live with."

Mr. Bishop said Senate Republicans continue to polish their proposal in an effort to find common ground, and that talks continue is a good sign.

"I hate to be in a position where somewhere down the road in September, we haven't talked openly about every option," he said. "That's where we get into trouble because you end up on October 1 in the early morning and the people don't even know what's going on. We want to be as transparent as possible, and I think that's the biggest difference between last time and this time."

Ms. Granholm has sought to reassure residents the state would not repeat the temporary government shutdown that occurred in 2007. Mr. Bishop said that experience "was a disaster, and we just don't want to repeat it."

Of a possible shutdown this year, Mr. Bishop said, "Sure there's that prospect. That's always possible."

But that's why, unlike 2007, Senate Republicans passed their own plan, Mr. Bishop said.

Another change is that Ms. Granholm and Democratic-led House are not presenting competing proposals, Mr. Bishop said. Republicans wanted the Democrats to present joint proposals this year so it would be a clear two-sided negotiation, Mr. Bishop said.

Dillon spokesman Dan Farough said he could not reach House Speaker Andy Dillon (D-Redford Twp.) to respond to Mr. Bishop's characterization of the process.

M.E.G.A.: Mr. Bishop said he is pleased with Sen. Nancy Cassis' thorough review of a bill that would expand the number of tax credits that the Michigan Economic Growth Authority can offer from 400 to 500. The Granholm administration has been anxious for the Senate to act on HB 4922 [log in to unmask]" alt="*">since House passage of the legislation more than two months ago.

Administration officials say without the bills, it cannot offer any more tax credits until January to lure economic development. Ms. Cassis (R-Novi), chair of the Senate Finance Committee, has said she wants the government to show more transparency in the data about the credits (SB 71[log in to unmask]" alt="*">).

"I think that Senator Cassis is asking the exact question that she should," Mr. Bishop said. "We just want to make sure we're not throwing good money after bad. If you look at these MEGA credits over time, they have not been performing the way they should."

SMOKING BAN: Mr. Bishop reiterated that the Senate Government Operations and Reform Committee that he chairs would not take up a bill to ban smoking in most workplaces until after officials wrap up budget work (HB 4377[log in to unmask]" alt="*">).

H.A.L. BREAK-UP: Mr. Bishop said the Senate will seriously consider rejecting Ms. Granholm's executive order eliminating the Department of History, Arts and Libraries (SCR 18[log in to unmask]" alt="*">).

Mr. Bishop said the transfer of assets to Michigan State University is particularly troubling.

"We're definitely looking at that," he said. "We're concerned about some of the jewels of the state."

The House also would have to reject the executive order to nullify it. When a governor hits a legislative roadblock with an executive order, sometimes he or she will withdraw it and issue a new one that addresses the concerns.

Mr. Bishop said the Senate has not broached "that subject with the administration yet, but that's the kind of outcome that I think would be of value now."

2010 ELECTIONS: Mr. Bishop said he is confident that Republicans can extend their winning streak in the Senate and maintain control of the chamber for another four years.

Republicans won control of the Senate in 1984. A 2010 victory would extend their streak to 30 years and eclipse the most recent winning streak a party held on a house of the Legislature when Democrats ruled the House from 1967-92.

2006 and 2008 were disastrous election years for Republicans in Michigan, but Mr. Bishop said the backlash to the growth in federal spending under President Barack Obama and fatigue with Ms. Granholm will boost the GOP here.

"We're seeing the pendulum start to swing the other way," he said. "I think momentum is building forward behind the Republican cause right now."

Mr. Bishop said he has not yet decided who to support in the race for the Republican gubernatorial nomination. He said only that the party has "got a lot of great candidates."

CON-CON: Mr. Bishop said he hopes voters reject the call for a constitutional convention in next year's elections, saying he is worried about opportunists trying to completely rewrite the Michigan Constitution after the Michigan Democratic Party's attempted constitutional amendment in 2008. Reminded that voters would choose the delegates and have the final say on a proposed new constitution, Mr. Bishop said, "I do have confidence in the system. I just don't think this is the right environment."

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Pamela Ann Martell

Higher Education Consultant

King-Chavez-Parks (KCP) Initiative

Michigan Department of Energy, Labor & Economic Growth

201 N. Washington Square

Victor Office Center, 3rd Floor

Lansing, MI 48913

Direct Line: (517) 335-3009

Main Line: (517) 373-9700

Fax: (517) 373-2759

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