Dec 31, 2007

Brief State Government Shutdown Leads Top 10 Legislative Stories of 2007

It was an historic year for the Michigan Legislature. Michigan residents saw things from the legislature they have not seen in many years, and in some cases we saw things we had never seen before. The obvious big story in the legislature was the first state government shutdown since the time of Gov. G. Mennen “Soapy” Williams almost a half century ago.

1- State Government shutdown
The first shutdown of state government since the 1950s occurred in the wee hours of Oct. 1 when the legislature missed the midnight deadline for passing a state budget that erased the $1.8 billion deficit. The shutdown only lasted a few hours, and the legislature balanced the budget with a combination of spending cuts, reforms and new taxes. Following 15 consecutive years of tax cuts, the resulting tax increase was perhaps a bigger story than the shutdown itself. The lawmakers voted to set a 6 percent sales tax on certain services and raised the state income tax rate from 3.9 percent to 4.45 percent. The historic legislation came after months of charges and counter charges, one-upmanship and bad blood between the two political parties and between the governor and the senate majority leader.

2- Democrats take control of the House
Democrats took over control of the House of Representatives on Jan. 10 for the first time in almost a decade with the swearing in of the 110 House members. The Democrats won control of the House with a 58-52 margin following the general election in November 2006, and they already had their work cut out for them with a $700 million deficit in the current budget needing to be fixed and a projected $1.8 billion deficit in the budget that needed to be approved by Oct. 1. Lawmakers also had to find a replacement for the Single Business Tax (SBT) the Republicans had killed in a campaign move in the summer of 2006 without a replacement for the revenue in sight. Rep. Andy Dillon took the gavel as Speaker of the House, and he immediately restored debate to the House floor that had been silenced in recent years under Republicans' control. Despite picking up a few seats in the Senate and the fact more people voted for Democrats for the Senate, because of gerrymandering of the district boundaries, Republicans were able to hang on to control of the Senate. Sen. Mike Bishop, R-Rochester, was elected as senate majority leader.

3 - Recalls
The tax increases approved by the legislature in October led to recall attempts after months of threats that any lawmaker voting for a tax increase world be recalled from office. The Michigan Taxpayer Alliance, led by Republican Macomb County Commissioner Leon Drolet, and an Oakland County group calling itself "Stop Hurting Michigan's Kids," led by conservative activist Tom McMillin, launched separate recall attempts against primarily Democratic lawmakers who voted to increase the state income tax and implement a sales tax on certain services that helped do away with a $1.8 billion budget deficit. However, the process has not gone well for the two groups, and so far only two of the nine lawmakers targeted for recall have had the recall language approved: Reps. Robert Dean, D-Grand Rapids, and Marie Donigan, D-Royal Oak. Those rejected of because of unclear language intended for the recall petitions include Sen. Jerry Van Woerkom, R-Norton Shores; Rep. Mary Valentine, D-Muskegon; House Speaker Andy Dillon, D-Redford; Rep. Marc Corriveau, D-Northville; Rep. Ed Gaffney, R-Grosse Pointe Farms; Rep. Steve Bieda, D-Warren; and Rep. Joel Sheltrown, D-West Branch.

4- Michigan Business Tax approved
In June the legislature ended almost a year of worry, hand-wringing and speculation by passing the Michigan Business Tax (MBT) that replaced the Single Business Tax (SBT) following another all-too-common late-night session. The bill ended months of business uncertainty that scared off investors to the state. The new structure provides tax cuts for more than seven out of 10 Michigan businesses and provides tax cuts to both small businesses and Michigan’s major manufacturers. It is a fair, simple tax that will provide the same amount of revenue as the Single Business Tax it replaces, while encouraging job creation in Michigan. The GOP-controlled Legislature voted in August 2006 to eliminate the SBT two years earlier than planned, without a replacement in sight. The move led Standard & Poor's to lower the state's rating on general obligation bonds to "AA,” costing the state more money to borrow funds for any reason.

5- First budget deal reached
The first marathon legislative session and the first possible state government shutdown was avoided in May when House Democrats stymied a shutdown of state government and avoided cuts in health care and education by eliminating most of the $800 million deficit in the current budget, which had just three months to go, with spending cuts and other measures. The deal ensured there were no cuts to the K-12 per-pupil foundation grant and Medicaid.

6- Service tax repealed
Just hours after the sales tax on services that was just approved in October was set to go into effect, the legislature repealed it during another all-night marathon session in December. The service tax will be replaced by a 21.99 percent surcharge on the taxes businesses already pay under the new Michigan Business Tax (MBT), effective Jan. 1, 2008, but the surcharge will sunset in 2017. The move followed months of pressure by business groups claiming they would be seriously hurt by the 6 percent sales tax on services, and it came after lots of closed door negotiations between House and Senate leaders.

7-Rock-bottom prices on iPods
A chicken in every pot and an iPod for all 1.65 million Michigan school kids. That was a story that made national news, and Republicans hammered Democrats with it, even though it was not true. During an April press conference with Speaker Andy Dillon, House Democrats talked about bringing technology to education. In that discussion, the idea of buying iPods or mp3 players for students came up, and some reporters ran with the false story that Democrats wanted to buy an iPod for every school kid for a mere $38 million. It was front-page news for a few weeks at a time when spending cuts and tax increases were being discussed before the story was debunked.

8-Majority leader censors blog
Senate Majority Leader Mike Bishop, R-Rochester, took the unusual step of censoring a liberal blog that apparently had been very vocal in pointing out what it called Bishop's failure to negotiate in good faith during the budget crisis. Subscription-only Gongwer News Service reported Bishop ordered "Blogging for Michigan" blocked from being accessed from Senate computers, claiming that the blog was “created by a Senate employee using Senate equipment.” The blog was actually created and operated by Shiawassee County resident Christine Barry, a systems engineer, from her home. After four days of solid pressure from both the left and right side of the political spectrum, Bishop relented and lifted the ban.

9-House Democrats deliver on campaign promises
House Democrats got to work immediately on issues they campaigned on and that won them control of the House. House Democrats introduced and approved a bill in January that ended immunity for drug companies if their drugs kill or maim the people who take them, and the measure also repealed the current ban enacted in 1996 by then-Gov. John Engler designed to shield huge pharmaceutical companies from responsibility. The Democrats also addressed voters' concerns about Canadian and out-of-state trash streaming across our borders - some 6.2 million tons of out-of-state-trash in 2005 alone-, and legislation approved by the House banned any landfill expansion until 2011. However, the bills remain stalled in the Senate.

10-Publication of staffers' and state employees' salaries draws ire
The Lansing State Journal irked both state employees and legislative staffers with their salary database this year. In July, the LSJ published the name, title, department, workplace county and salary of every state employee. In June, the salaries of legislative staff members in the Michigan House of Representatives were added to the searchable list of salaries maintained by the LSJ. There was an immediate backlash, and many state employees boycotted the LSJ. The Coalition of State Employee Unions told state employees the unions were coordinating efforts to address the problem, pledging to pursue legal action and urging members to reconsider their Journal subscriptions. Critics claimed the decision to publish the information was an invasion of privacy that could lead to possible identity theft, and it was a cheap shot because of the timing of publication when spending from the state budget was being cut. The Michigan Senate decided not to wait around for a Freedom of Information request from the LSJ for salary information on Senate employees, and the Senate established a web site with that information without the names to protect employee privacy.

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