Sep 26, 2007

Senator predicts budget agreement in sight

Sen. Mark Jansen, R-Grand Rapids, told a room full of Michigan nonprofit executives Wednesday that he expects the Legislature to reach a budget deal and avoid a government shutdown before the deadline on Monday.

“I do believe today and tomorrow are going to be historic days for us,” Jansen said at the annul Nonprofit Day sponsored by the Michigan Nonprofit Association (MNA) at the Lansing Center. “I’m going to predict in the next 24 to 48 hours, like the UAW, we are going to have a tentative agreement.”

The House and Senate leadership had originally been scheduled to be part of a panel discussion on the budget at the annual event, but they were locked in fevered negotiations as the budget deadline draws nearer. Jansen and fellow freshman lawmaker Rep. Kim Meltzer, R-Clinton Township, served as pinch-hitters for the leadership

In the case of a budget shutdown much of the slack for human service needs and emergency relief help will fall to some of the more than 1,000 non-profits that the MNA represents. The theme of the annual nonprofit day is “Looking through the crystal ball: Where do we go from here,” but no on at the conference expected the budget to still be up in the air when the date for the 8th annual event was chosen last year.

“As partners with government, government and non-profits provide some essential services to our citizens,” said Karla Hall, an MNA board member. “The financial health of our state is of great importance to us.”

Although both House and Senate Republicans have, with the exception of Rep. Chris Ward, refused to vote for any tax increases, they have admitted publicly it will take a combination of cuts, reforms and new revenue to make up the $1.8 billon budget deficit.

“It we don’t get it done, shame on us,” Jansen said. “It won’t be a perfect solution, and everyone is probably going to be mad.
“If both sides are mad then I probably did something right,” he said.

Some Republicans have welcomed a government shutdown, and that prospect drew cheers at the Mackinac Republican Leadership Conference held last weekend. However, Meltzer is not one of those Republicans welcoming a shutdown. As the owner of a small tool and die shop, she said a shutdown would have the same effect on many Michigan residents as the short labor strike by the UAW had on her shop.

“In my opinion, the worst thing we can do is shut down the government,” she said. “I am a Republican and I have heard some Republicans say shut it down we don’t need government, but government provides some needed services.”

She favors the 30-day continuation or temporary budget passed last weekend by the Senate but frowned upon by Gov. Jennifer Granholm unless there is an agreement in principal in place.

“I think a continuation budget is the best way to go, even if I wasn’t an advocate for a continuation budget at first,” Meltzer said. “We simply owe it to the people not to shut government down.”

Following the legislators, a panel featuring long-time Lansing lobbyists weighed in on the budget, and they have been around Lansing and the Capitol much longer than lawmakers in the era of term limits. Although they were less enthusiastic than the lawmakers about getting a budget in place in time, they believe the budget will get done, and they expect to see an increase in the income tax rate from 3.9 percent to 4.5 percent. But they think it will take a continuation budget just to get a short-term budget in place.

Jeff Williams, a senior vice-president at Public Sector Consultants, said any government reforms will take anywhere from 3-8 years to have a positive effect on government spending, including going to a retirement plan that utilizes a defined contribution plan for state employees.

“If you think Michigan is going to fix the next eight years in 48 hours you are mistaken,” he said. “Show us a budget for 12 months.”

Tom Hoisington, the president of Public Affairs Associates, said the rancor and posturing between the Republican-controlled Senate and Democratic-controlled House that we are seeing in the media is not what’s going on behind closed doors. However, he said the plan of cutting taxes 30 times since 1993 to spur economic development and lure companies into investing here has not helped the economy or the budget.

“This is part of a failed experiment that began 10 years ago,” he said. “It was if you cut taxes they will come; they have not.”

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