Monday, December 31, 2007
In a perfect world Tom Tancredo would have had a chance but as you know we certainly don't live in a perfect world so after watching the debates, reading and researching I've eliminated;
Giuliani, liberal with an "R" by his name, Romney, flip, flopping moderate Ken Doll and as a citizen of the kingdom of God, I could not vote for someone involved in a deceptive cult, therefore helping to legitimize the deception, Huckabee, spare me another big spending "compassion conservative", McCain, on the wrong side of every right issue so I've chosen.......(drum roll) Fred Thompson as the most Conservative Republican candidate who CAN win
Thursday, December 20, 2007
For God so loved the world that He gave His only begotten Son, that whoever believes (trusts in, clings to, relies on) in Him should not perish but have everlasting life. John 3:16
Monday, December 3, 2007
A friend loveth at all times, and a brother is born for adversity.
Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof.
For to me to live is Christ,...
A post script to my "Dream on Hold" lament.
Ever have a light bulb moment? I know we all have.
I did. I realized what the Lord was trying to show and teach me through this experience of unrealized expectations and dreamsBy using an e-mail message send my a friend.
He has showed me that I am a "yesterday and "tomorrow" person.
I rarely live in the "now", today. He showed me through my friend's e-mail message what the results can and has been in my life...
“There are two days in every week about which we should not worry-two days which should be kept free from fear and apprehension. One of these days is Yesterday, with its mistakes and cares, its faults and blunders, its aches and pains. Yesterday has passed forever beyond our control. All the money in the world cannot bring back yesterday. We cannot undo a single act we performed. We cannot erase a single word we have said. Yesterday is gone.
The other day we should not worry about is Tomorrow with its possible adversities, its burdens, its large promise and poor performance. Tomorrow is also beyond our immediate control. Tomorrow’s sun will rise either in splendor or behind a mask of clouds-but it will rise and until it does we have no stake in tomorrow, for it is as yet unborn.
This leaves only one day-Today. Any man can fight the battles of just one day. It is only when you and I add the burdens of those two awful eternities-Yesterday and Tomorrow-that we break down. It is not the experience of today that drives men mad, it is the remorse or bitterness for something which has happened yesterday or the dread of what Tomorrow will bring. Let us therefore live one day at a time and leave the rest to God.”
He is showing me, Joanie live one day at a time and that I need to call on Him for help , every day, every hour and every minute sometimes!
He has showed me, a Rhema word to my spirit, that I can truly do nothing apart from Him.
He only enables me to glorify Him and day by day reflect Him
And He is helping me to let go and truly trust Him, with my life, my future, my happiness. Yup even after all these years as a Christian.
Trust & Faith = Hope
My faithfully tender loving God, He is so patient
Sunday, December 2, 2007
I am now a " Qualified Staging Professional " having completed a training program through the Midwest Staging Redesign Institute, an I.R.I.S approved training institution.
Which in a state that has one of the highest unemployment rates held captive by a socialist's Governor whose idea of a turn around is to tax its citizens and its businesses more and add to that a housing market in crises stage, it doesn't really mean a whole lot
Speaking of housing, I took my house off the market....It is certainly not news that we are in one of the worst housing market in 21 years and most of 2008 expected to be worst than 2007
I have worked my fanny off for over a year getting my house ready, de-cluttering, perfecting the staging, only to get a low ball offer, repeat showings to a couple that couldn't even make an offer and a real estate agent who thinks I am trying to mask odors because I have candles lit and who takes umbrage that I asked, "Please and Thank You" to extinguish candles and close the glass door to my fireplace so my house wouldn't burn down before I get back!
Even if I did get an offer again, why would I expect it to be anything close to acceptable?
Buyers know they have free rein, there is always another house or a foreclosure
I was just emotionally spend from bouncing between hope and disappointment and physically tired from cleaning or staging
So the house comes off the market and the dream of full timing is on the shelf *sigh*
I will probably re-list in March 2008, I don't know. I will pay close attention to the real estate report first.
It may make more sense to list in the Fall as "the prediction" is that the market might pick up in the 3rd quarter
Sooooooo I just gotta redirect my energies this winter (2008 election) and live, "on the road" vicariously through my RV buddies
But before I close that door for now, I did get the opportunity to see my RV (rig) of choice, a Bigfoot when in the Chicago area for my Home Stage Interior Redesign training
So for now these pictures are in my "hope chest" and my heart...
Sunday, November 11, 2007
A mere "thank you" seems so inadequate however I most sincerely thank you, those who have gone on and to those who remain, the VETERANS
July 14, 1861
My very dear Sarah:
The indications are very strong that we shall move in a few days—perhaps tomorrow. Lest I should not be able to write again, I feel impelled to write a few lines that may fall under your eye when I shall be no more . . .
I have no misgivings about, or lack of confidence in the cause in which I am engaged, and my courage does not halt or falter. I know how strongly American Civilization now leans on the triumph of the Government and how great a debt we owe to those who went before us through the blood and sufferings of the Revolution.
And I am willing—perfectly willing—to lay down all my joys in this life, to help maintain this Government, and to pay that debt . . .
Sarah my love for you is deathless, it seems to bind me with mighty cables that nothing but Omnipotence could break; and yet my love of Country comes over me like a strong wind and bears me unresistibly on with all these chains to the battle field.
The memories of the blissful moments I have spent with you come creeping over me, and I feel most gratified to God and to you that I have enjoyed them for so long. And hard it is for me to give them up and burn to ashes the hopes of future years, when, God willing, we might still have lived and loved together, and seen our sons grown up to honorable manhood, around us.
I have, I know, but few and small claims upon Divine Providence, but something whispers to me—perhaps it is the wafted prayer of my little Edgar, that I shall return to my loved ones unharmed. If I do not my dear Sarah, never forget how much I love you, and when my last breath escapes me on the battle field, it will whisper your name.
Forgive my many faults and the many pains I have caused you. How thoughtless and foolish I have often times been! How gladly would I wash out with my tears every little spot upon your happiness . . .
But, O Sarah! If the dead can come back to this earth and flit unseen around those they loved, I shall always be near you; in the gladdest days and in the darkest nights . . . always, always, and if there be a soft breeze upon your cheek, it shall be my breath, as the cool air fans your throbbing temple, it shall be my spirit passing by.
Sarah do not mourn me dead; think I am gone and wait for thee, for we shall meet again . . .
Sullivan Ballou was killed a week later at the first Battle of Bull Run, July 21, 1861.
When he died, his wife was 24. She later moved to New Jersey to live out her life with her son, William, and never re-married. She died at age 80 in 1917.Sullivan and Sarah Ballou are buried next to each other at Swan Point Cemetery in Providence, RI. There are no known living descendants.
We are the dead.
Take up our quarrel with the foe:
This was the poem written by World War I Colonel John McCrae, a surgeon with Canada 's First Brigade Artillery. It expressed McCrae's grief over the "row on row" of graves of soldiers who had died on Flanders ' battlefields, located in a region of western Belgium and northern France. The poem presented a striking image of the bright red flowers blooming among the rows of white crosses and became a rallying cry to all who fought in the First World War.
It is the Veteran
Sunday, November 4, 2007
The pressure on Republicans to vote for "the only guy who can beat Hillary Rodham Clinton" continues.
That's what the political know-it-alls are telling the grass-roots GOP voters about Rudy Giuliani.
He's the only one. He's the best they can do in 2008.
I have a few problems with this line of thinking:
What difference does it make if Giuliani is president or Hillary? I ask this as someone who knows first-hand the repressive instincts of the former first lady. I was public enemy No. 1 in the media during her reign of terror. Nevertheless, the fact remains, Giuliani isn't much different from the Clintons in substance. He said so himself in an interview with the Village Voice a decade ago: "Most of Bill Clinton's policies are very similar to mine."
In fact, I'm not even sure he is eligible to run as a Republican. To run for the Republican nomination, you have to be a Republican. Giuliani denied he was really a Republican shortly after winning the race for mayor of New York – insisting that he was a "liberal."
Was he lying then or now? I think he's lying now.
He's got a long and undistinguished track record of support for liberal Democratic politicians – including Mario Cuomo in his bid to become governor of New York over George Pataki.
Where does he stand on the great issues of the day?
- special rights for homosexuals as a class, including same-sex union
- pro-amnesty and fought federal government as mayor of a "sanctuary city"
Does that sound like a conservative to you?
"But he can win!" insist the pragmatists.
To which I say, "So what. Who needs him?
Why work hard for Hillary light when you can get the real deal with no sweat at all?"
And, I might add, I don't even believe he can win – not with a record like that.
I'm reminded of what the pragmatists told California voters when Arnold Schwarzenegger was running for governor.
"He's the best Republicans can do in this state," they said.
And now, as a result of that foresightedness, we have so-called "anti-discrimination laws" in place in the Golden State that many believe will make it illegal to use "biased" terms like "Mom" and "Dad" in the public schools.
Schwarzenegger signed those bills after promising not to do so. That's the kind of character and commitment you get from these RINOs – Republicans in name only.
As for me, I won't vote for people like Rudy and Arnold and Mitt. No more phonies, no more pretenders. No more "compassionate conservatives." No more flip-floppers. No more men who govern like sissies and claim to be the second coming of Ronald Reagan.
I've had it. I'm done, through, finished, completed.
I understand I am a minority. I understand Rush Limbaugh and Sean Hannity and other celebrities disagree with this position. I don't care. I'm not compromising. I'm not going to be a part of electing an immoral and corrupt president – not again.
Sometimes I wonder if we would have been better off with Al Gore as president in 2001.
If we had, I am confident the country would have rebelled by now.
With a weak-kneed RINO in the White House, nobody is quite sure whom to blame – there's so much to go around.
Don't get fooled again.
No more Bushes.
No more Schwarzeneggers.
No more Romneys.
No more Rockefellers.
No more Fords.
No more Nixons.
And no more Giulianis.
There's still time to demand better from the Republicans in 2008.
Friday, October 26, 2007
Fri Oct 26, 2007 at 07:43:48 AM EST
No, you didn't misread the headline. The Democrats in Lansing apparently aren't satisfied with a nearly $1.4 BILLION tax hike and are moving to raise taxes again and to bury them in the "cuts" portion of the 10/1/07 budget agreement.
You'll remember that the Dems agreed to make a few cuts before November 1st. Of course, they haven't. And now word comes that they'd very much like to avoid the cuts when at all possible. According to the Detroit News:
Sources familiar with closed-door negotiations reported advances Thursday, but no final deal on the outstanding sticking points, including privatizing foster care, slicing money from disease prevention programs and raising hunting and fishing license fees.
The governor's office, the Democratic state House and the Republican Senate must agree to an additional $430 million in cuts to balance the state's books and avoid another partial shutdown of government services.
This at the same time that the Governor rejects calls from Congressman Pete Hoekstra to reexamine hundreds of thousands of dollars of new state spending on a turtle fence.
More taxes so that we can buy fences for turtles. Oh, and to pay for special gifts to the city of Detroit. Items like:
$12 million for the Detroit Zoo, $10 million for the Detroit Institute of Arts and $1.9 million for the Detroit Historical Museum.
And on top of it all, we're now only 5 days away from a government shutdown. The second in a month.
Tuesday, October 16, 2007
I have only had one showing of my house in a month *sigh*
I have decided to take it off the market the end of November, before the holidays and give myself a break
I have worked sooooooooo hard on the presentation of my home, I am beat!
I will re-list in February 2008 and keep it listed until it sells
Hopefully in the early Spring so I will have time to find and buy a rig and a truck to pull it
Speaking of rigs, I will finally have an opportunity to see a
Bigfoot rig (RV) in person!
I am going to a Home Staging training seminar near Chicago the end of the month.
There is a Bigfoot dealer about 1 1/2 hour from where I'll be.
I called him today and he is expecting a 21ft RB in any day, just like the one I want!
Of course I am not gonna buy new although his price of $30,000 is very good for a new Bigfoot
I just want to actually SEE and be IN one!
For those of you unfamiliar with Bigfoot, http://www.bigfootrv.com/ they are a quality built molded fiberglass 4-season rig, very capable of snow camping.
After much researching and thinking about how
I want to camp, its my rig of choice
So I'll go and look, feel and take pictures and KNOW that sometime SOON I'll be in my own Bigfoot, on the road, me & Maddie, apackof2
Sunday, October 7, 2007
Automakers lose millions in refunds
David Shepardson / Detroit News Washington Bureau
WASHINGTON -- General Motors Corp. stands to lose more than $100 million in state refunds under the budget deal approved by Michigan lawmakers early Monday -- in addition to paying tens of millions of dollars in new service taxes.
In all, automakers and Michigan car dealers will lose $350 million in refunds of sales taxes paid on demonstration vehicles and defaulted leases since 1999. The state has not reimbursed the automakers because the issues have been wrapped up in court.
In a pair of rulings earlier this year, the Michigan Supreme Court upheld two separate decisions awarding the automakers and dealers of hundreds of millions of dollars in back tax refunds. Specifically, automakers and dealers are owed $250.2 million for demonstration vehicles, and $93 million for sales taxes on defaulted leases.
State legislators early Monday rewrote the laws to eliminate the sales tax exemption on demonstration vehicles -- which include vehicles test driven by customers at dealerships and management leases for automakers' white-collar employees -- and to bar automakers from collecting sales tax paid on defaulted leases.
The House Fiscal Agency estimated the loss in future years at about $60 million in annual refunds for the automakers and dealers.
In addition, the Detroit Three automakers stand to pay tens of millions of dollars in new taxes on services, among them consultants and administrative services.
The companies' lobbyists in Lansing privately expressed their unhappiness with several provisions in the budget deal. GM declined to say how much it stood to lose. "We're studying the tax package to better understand its overall effect," said Greg Martin, a GM spokesman.
Ford Motor Co. also said it was studying the budget deal. "We are still studying Michigan's new tax policy in order to understand the full impact it could have on business and manufacturing competitiveness in the state," spokesman Mark Truby said.
Chrysler LLC spokesman Jason Vines said the company supported the budget agreement. "Our tax guys are looking at it. Nobody is in favor of higher taxes but we're glad there's an agreement and the state isn't shut down," Vines said.
Liz Boyd, a spokeswoman for Gov. Jennifer Granholm, said it's not uncommon for retroactive tax decisions. She said a meeting was set for later in the week between state officials and automakers and their staff to discuss the ramifications of the new provisions.
"Our administration is very committed to our manufacturing sector and to the Big Three," Boyd said. "We understand there are concerns about the changes in tax policy."
Friday, October 5, 2007
Small business Association of Michigan at 1.800.362.5461
National Federation of Independent Business/Michigan at 517.485.3409
OR Toll Free at 1.866.458.7584
When I talked with both, they are joining together along with other organizations such as Michigan Taxpayers Alliance to fight the obscene Service Tax (list of services taxed at the end of the article).
I truly believe we have a better chance of making this happen as opposed to recalls. Although I am looking and waiting for someone to come up with a viable recall of Queen Jenny.
After all doesn't the buck stop at the top?
Service tax repeal is plotted
Businesses unleash uproar
October 3, 2007
BY CHRIS CHRISTOFF
FREE PRESS LANSING BUREAU CHIEF
LANSING -- Business groups inflamed by the new sales tax on many services are plotting a campaign to repeal it, just days after it passed.
"There are a lot of discussions going on," said Todd Anderson of the Small Business Association of Michigan.
He said measures include a possible petition drive -- which could place the issue on a statewide ballot -- or merely lobbying the Legislature to rescind or make major changes in the new tax.
The tax on services is a key piece of the state budget deal lawmakers finished early Monday, hours after a deadline passed to shut down state government. It will generate about half the new tax revenues needed to help erase a $1.75-billion deficit.
Legislators closely guarded the list of services under discussion for the service tax until Sunday morning.
The Legislature and Gov. Jennifer Granholm also raised the state income tax from 3.9% to 4.35%.
Charles Owens, state director for the National Federation of Independent Businesses/Michigan, said his members are incensed by the new law signed by Granholm to levy a 6% sales tax on a wide array of services. Soon after the new law passed, he said, it became clear the tax would apply to more business services than many first believed.
"We had a meeting with some of our members this morning, and the most-asked question was: 'Where are the recall petitions,' " Owens said, referring to recall campaigns planned against legislators who voted for the tax increases.
The businesses say they fear the tax will raise the price of their services enough to cost them clients who decide to go without the service, such as janitorial, or to change to an out-of-state company that might avoid the tax.
The tax is especially onerous, they say, in business-to-business transactions, where the cost could be passed on through several businesses and ultimately to consumers.
LIST OF SERVICES TAXED 6%
Astrology,Baby shoe bronzing,Bail bonding,Balloon-o-grams,Coin-operated blood pressure testing machine services,Bondspersons,Check room services,Coin-operated personal service machines,Comfort station operation services,Concierge services,Consumer-buying services,Credit card notification services,Dating services,Discount buying services,Social escort services,Fortune-telling services,Genealogical investigation services,House-sitting services,Social introduction services,Coin-operated rental locker services,Numerology services,Palm-reading services,Party-planning services,Pay telephones,Personal fitness trainers,Personal shopping services,Coin-operated photographic machine services,Phrenology services,Porters,Psychic services,Rest-room operation services,Shoeshines,Singing telegrams,House-sitting services,Wedding chapel services,Wedding planners,Consulting (including lobbying),Tanning,Escort services,Massage,Administrative services (like payroll),Investment advising,Janitorial,Armored cars,Private investigators,Packaging and labeling,Landscaping, Skiing,Business service centers,Carpet and upholstery cleaners,Couriers and messengers,Document preparation services,(Tax preparations, wills, buying selling real estate, etc),Self-storage,Transit and ground passenger services,Office administration,Travel agents,Scenic transportation Service contracts,Interior design Tour operators Warehousing and storage
Monday, October 1, 2007
Deal is 'right solution for Michigan,' Granholm says
October 1, 2007
BY CHRIS CHRISTOFF, DAWSON BELL AND ZACHARY GORCHOW
FREE PRESS STAFF WRITERS
UPDATED AT 5:20 A.M.: LANSING – The shutdown of state government was halted early this morning when the Senate voted to expand the 6% sales tax to various services, the final major piece of a plan to erase a $1.75-billion deficit and balance a 2007-08 budget.
Democrat Lt. Gov. John Cherry cast the deciding vote for a 20-19 tally, the minimum needed for passage of an historic budget agreement that stopped what would have been a chaotic and embarrassing interruption of state services.
Three of 21 Republicans voted for the sales tax change, and only one of 17 Democrats opposed it.
“This budget agreement is the right solution for Michigan,” Gov. Jennifer Granholm said in a news release after the vote. “We prevented massive cuts to public education, health care and public safety while also making extensive government reforms and passing new revenue. With the state back on solid financial footing, we can turn our focus to the critical task of jumpstarting our economy and creating new jobs.”
The vote came about 4 a.m., about three hours after the House and Senate voted to raise the 3.9% income tax rate to 4.35%, and approved controversial changes in school employee health insurance and pensions benefits aimed at reducing state costs.
The Senate vote to raise the income tax was also 20-19, with Cherry as the tie-breaker.
The two votes triggered a 30-day interim state budget which Gov. Jennifer Granholm said she would sign – if coupled with a tax increase – to avert a shutdown.
Granholm said 35,000 state workers threatened with temporary layoffs would be told to report to work this morning at their regular work times.
The votes concluded an epic, 17-day struggle over taxes and the size and importance of state government, as the Legislature met in numerous late-night sessions with no results.
Democratic leaders hailed the approved plan as a responsible compromise, while Republicans decried it as a massive tax on Michigan’s struggling taxpayers.
Senate Majority Leader Mike Bishop, R-Rochester, had held out for a smaller tax hike and bigger spending cuts. He said he was disappointed at the final outcome, but said some spending reforms were enacted that would reduce the cost to taxpayers over the long haul.
In the end, Bishop said, Granholm and Democrats who control the House were able to flex their political will for the tax increases.
He said work would begin now to cut $435 million from state spending and produce a permanent 2007-08 budget.
“Our members are going to work hard to make this the best state to work, live and raise a family,” Bishop said.
The tax increases will generate $1.35 billion in additional revenue for the state, with the promise of $435 million in spending cuts.
Those cuts will be decided in the next month, as the Legislature determines spending for public schools and the state’s 19 departments.
The flurry of final votes late Sunday night and early this morning capped yet another marathon session in a tumultuous two-and-a-half weeks.
Late Sunday, the Democrat-controlled House passed a bill to raise the state income tax from 3.9% to 4.35% by a 57-52 vote with just two Republicans — Chris Ward of Brighton and Ed Gaffney of Grosse Pointe Farms — voting for it. Only three Democrats — Lisa Wojno of Warren, Martin Griffin of Jackson and Mike Simpson of Liberty Township near Jackson — voted against it.
Gaffney said he is “not happy with what I did,” but it needed to be done to “break the logjam and put us on a course to keep government open.”
House Minority Leader Craig DeRoche, R-Novi, criticized the votes to raise the income tax and extend the sales tax on services.
"This was vote for bureaucracy and special interests,"DeRoche said."This is one of the largest spending sprees in Michigan history, it is a 10% increase in the size of the bureaucracy.
He added, "We stood on principle to cut and reform and have the state live within its means, like working families have to live within their means."
Granholm and her fellow Democrats argued more revenue is needed to head off deep cuts to schools and state services for health and public safety.
House Speaker Andy Dillon said the House had done its part to solve the $1.75-billion deficit, putting the issue in the Republican-controlled Senate’s hands.
Asked why the House couldn’t have approved a $1.35-billion tax increase — the size of the income and sales tax increases the House approved Sunday night — weeks ago, Dillon replied: “It’s a nature of the legislative body to wait till the last second the make tough decision.”
Will the last one out of Michigan please turn out the lights?
Republicans who controlled the Senate de-cried it but in the end helped to pass it
Republicans who voted for Queen Jenny's Tax Increases
Income Tax Increase - Was 3.9%; Now will be 4.35%
* Patricia Birkholz - Saugatuck * Tom George - Portage * Ron Jelinek - Three Oaks * Gerald VanWoerkom - Norton Shores
* Chris Ward - Brighton * Ed Gafney - Grosse Pointe
Sales Tax Extension to Several ServicesState Senate:
* Wayne Kuipers - Holland * Ron Jelinek - Three Oaks * Valde Garcia - Howell
Saturday, September 29, 2007
This week's deal between General Motors and the United Auto Workers is being hailed as a new era for Detroit, and for once that advertising may be justified. The UAW in particular made historic concessions that show a new awareness of global competition. What's less encouraging is how much this reality-based compromise still contrasts with the policies that unions and their political friends are promoting in the unreal world of Washington, D.C.
Our friends in the AFL-CIO often think we're too critical, but we're not responsible for taking union membership down to 7.4% of the non-government American labor force last year. (See nearby chart.) The reality of a dynamic world economy did that, assisted by the failure to adapt by union leaders and corporate managers. These columns support collective bargaining, and our belief has long been that if a company's workers vote to join a union, they and the company deserve what they get.
The problem with unions is not all that dissimilar to that posed by entrenched management: Once they win comfortable contracts, they often become impediments to the kind of innovation and flexibility essential to success in today's economy.
So in the name of "job security," they undermine a company's -- or a nation's -- competitiveness. The result, over time, is less job security for everyone, especially the union workforce. There's no better example of this than GM, where the UAW now represents about 74,000 hourly workers, compared to 246,000 in 1994. Some security.
The new GM-UAW contract is a belated recognition that the choice has now become change, or Chapter 11. Under the deal, wages are frozen, save for bonuses and some lump-sum payments. GM in turn promises to invest in American plants with UAW workers, though of course it will also keep investing abroad.
In what seems to be the most creative stroke, GM will pay some $35 billion toward a new health-care trust fund to be administered by the union. That's a big initial cash flow, but it means the company can divest itself of some $50 billion in long-term liabilities, which would only have grown as health-care costs rose and retirees lived longer. Investors loved it, driving up GM stock by around 7% for the week.
The UAW now gains ownership of its members' health-care resources, in effect becoming a financial manager of a giant Health Savings Account for auto workers. If the union is creative, it will rethink its coverage plans, using the new generation of consumer-driven health-care options (such as personal health savings accounts) to encourage and reward more careful spending by beneficiaries. UAW President Ron Gettelfinger has told his members the trust fund will last 80 years, and the union's job now is to make sure it does.
A similar arrangement at Caterpillar Inc. didn't work because the money ran out in six years.
This new Treaty of Detroit in the marketplace is all the more notable when you consider how little the union political agenda has changed. The AFL-CIO famously split in 2005 over the priority of organizing over politics. But organized labor's share of the private workforce has kept falling.
We had a friendly visit not too long ago with Andy Stern, the Service Employees International Union President and perhaps the most successful modern labor leader. He is a shrewd man, but his main message seemed to be that union salvation lies in America adopting the work rules and income redistribution of Europe. He says companies need to pass their health-care costs onto government, meaning taxpayers. And while he recognizes that unions can't secede from the global economy, the trade rules need to be changed -- that is, restricted or managed -- so that the pace of change is less disruptive and wealth more equally shared.
With Democrats now running Congress, and ahead in the Presidential polls, Mr. Stern and his union mates are closer than they've been in decades to seeing that agenda implemented. But they also reveal their own lack of faith in the appeal of unions when they support a ban on secret-ballot elections at work sites. And of course they still benefit -- unlike anyone else in American politics -- from being able to coerce the payment of dues.
The larger irony is that Europe is now learning the hard way that Mr. Stern's "social contract" is itself deeply flawed. French President Nicolas Sarkozy was elected this year in part because he acknowledged that even France can't sustain the French model any longer. Health-care expenses represent a huge chunk of the tax burden in France, where restrictive work rules and such union demands as the 35-hour week have led to far higher joblessness and far less prosperity than in the U.S.
Mr. Sarkozy is now pushing American-style reforms precisely when Mr. Stern and Democrats are promoting French policies. Our guess is that economic reality will in the end limit Mr. Stern's political ambitions in the same way that global competition has finally awakened the UAW.
Monday, September 24, 2007
Is this just a move by the UAW bigwigs for the benefit of the union kool aid drinkers?
Or do they REALLY believe that in a global economy
any company can guarantee job security?
Surely they know that even though GM, has a surplus of about a 65-day supply cars/trucks that a strike will damage sales and profits?
Tom Libby, senior director of industry analysis for J.D. Power and Associates, said even a short strike could hurt the company because its new crossover vehicles, the Buick Enclave, GMC Acadia and Saturn Outlook, are selling well and in short supply.
"The momentum they've established for those products would be interrupted if there's a supply interruption," Libby said. "There's not a lot of inventory available to sell down. So they need to keep that pipeline full."
Libby called the Enclave and Acadia a success story for GM because they don't stay on lots for long and they sell at or near full price.
And what about workers making only $200 per week in strike pay?
Worker Anita Ahrens burst into tears as hundreds of employees streamed out of a GM plant in Janesville, Wis., just after the strike began at 11 a.m. EDT.
"Oh my God, here they come," said Ahrens, 39. "This is unreal."
Ahrens has seven years at the plant, where she works nights installing speakers in sport utility vehicles. She waited Monday for her husband, Ron Ahrens, who has worked there for 21 years.
The couple has three children, including a college freshman, and Ahrens worried about how they would pay their bills.
"This is horrible, but we're die-hard union, so we have to," Ahrens said. "We got a mortgage, two car payments and tons of freaking bills."
Tom Libby, senior director of industry analysis for J.D. Power and Associates, said, "I just think it's going to hurt both sides in the long run."
I agree Mr. Libby, I agree
Quotes taken from; http://www.chron.com/disp/story.mpl/ap/fn/5160480.html
UAW sets 11 a.m. GM strike deadline
September 24, 2007
By KATIE MERX
FREE PRESS BUSINESS WRITER
Saturday, September 22, 2007
Wednesday, September 19, 2007
To clear up some confusion over HB-5194
It was the H-10 version that passed
The version of House Bill 5194 that passed the House of Representatives was the H-10 version. This version REPLACED the original bill and actually CUT!! the income tax to Disabled Veterans by $250.00. This bill did NOT increase the income tax rate for anyone and was effectively a tax DECREASE.
So the H-10 version of HB 5194 did not raise the income tax as it was originally drafted to do. Instead, it only cut disabled veteran's income tax.
Thank you Dan Acciavatti
32nd District for clarifiying this.
HB-5194, As Passed House, September 18, 2007
SUBSTITUTE FOR HOUSE BILL NO. 5194
HB-5198, As Passed House, September 18, 2007
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
An act to provide for the levy, assessment, and collection of
a specific excise tax on the storage, use, or consumption in this
state of tangible personal property and certain services; to
appropriate the proceeds thereof; and of that tax; to prescribe
penalties; for violations of the provisions of this act and to make
This bill includes a tax on our phone service
Well now its up to the Senate to stop the Democrats from raising our taxes
Here's the roll call:
VOTES ON HB 5194
DEMOCRATS VOTING `YES' (52): Accavitti, Angerer, Bauer, Bennett, Bieda, Byrnes, Byrum, Cheeks, Clack, Clemente, Condino, Constan, Coulouris, Dean, Dillon, Donigan, Ebli, Espinoza, Farrah, Gillard, Gon-zales, Hammel, Hammon, Hood, Hopgood, Jackson, Johnson, Robert Jones, Lahti, K. Law, LeBlanc, Leland, Lemmons Jr., Lindberg, Mayes, McDowell, Meisner, Melton, Miller, Polidori, Sak, Scott, Sheltrown, A. Smith, V. Smith, Spade, Tobocman, Vagnozzi, Valentine, Warren, Wojno and Young.
DEMOCRATS VOTING `NO' (4): Brown, Corriveau, Griffin and Simpson.
DEMOCRATS NOT VOTING (2): Cushingberry and Meadows.
REPUBLICANS VOTING `YES' (25): Acciavatti, Ball, Booher, Calley, Casperson, Caswell, Caul, Emmons, Gaffney, Hansen, Hildebrand, Hoogendyk, Rick Jones, Moolenaar, Nitz, Nofs, Opsommer, Pearce, Proos, Rocca, Schuitmaker, Shaffer, Walker, Ward and Wenke.
REPUBLICANS VOTING `NO' (22): Brandenburg, Garfield, Green, Horn, Huizenga, Hune, Knollenberg, LaJoy, D. Law, Marleau, Meekhof, Meltzer, Moore, Moss, Palmer, Palsrok, Pastor, Pavlov, Robertson, Sheen, Stakoe and Steil.
REPUBLICANS NOT VOTING (5): Agema, Amos, DeRoche, Elsenheimer and Stahl.
VOTES ON HB 5198
DEMOCRATS VOTING `YES' (51): Accavitti, Angerer, Bauer, Bennett, Bieda, Brown, Byrnes, Byrum, Cheeks, Clack, Clemente, Condino, Constan, Coulouris, Cushingberry, Dean, Dillon, Donigan, Espinoza, Farrah, Gillard, Gonzales, Hammel, Hammon, Hood, Hopgood, Jackson, Johnson, Robert Jones, Lahti, K. Law, LeBlanc, Leland, Lemmons Jr., Lindberg, Mayes, McDowell, Meadows, Meisner, Melton, Miller, Poli-dori, Sak, Scott, Sheltrown, A. Smith, V. Smith, Tobocman, Warren, Wojno and Young.
DEMOCRATS VOTING `NO' (7): Corriveau, Ebli, Griffin, Simpson, Spade, Vagnozzi and Valentine.
DEMOCRATS NOT VOTING (0)
REPUBLICANS VOTING `YES' (6): Ball, Calley, Emmons, Gaffney, Hildebrand and Ward.
REPUBLICANS VOTING `NO' (44): Acciavatti, Amos, Booher, Brandenburg, Casperson, Caswell, Caul, Elsenheimer, Garfield, Green, Hansen, Hoogendyk, Horn Huizenga, Hune, Rick Jones, Knollenberg, LaJoy, D. Law, Marleau, Meekhof, Meltzer, Moolenaar, Moore, Moss, Nitz, Nofs, Opsommer, Palmer, Palsrok, Pas-tor, Pavlov, Pearce, Proos, Robertson, Rocca, Schuitmaker, Shaffer, Sheen, Stahl, Stakoe, Steil, Walker and Wenke.
REPUBLICANS NOT VOTING (2): Agema and DeRoche.
Wednesday, September 12, 2007
Mr. McHugh is a legislative analyst for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich.
Summer 2007 Version(Note: Legislative Analyst Jack McHugh has also discussed these ideas in detail in a WJR-AM 760 radio interview.)
In facing budget challenges that are unquestionably daunting, the state’s political establishment has concluded that tax hikes are necessary because it would be impossible to find enough cuts and reforms to close the gap between desired spending and expected revenue.
Not so fast!
Below is a list of ways to achieve $1.9 billion in savings with little heavy lifting. Some of these may take a few years to fully implement, but the total also exceeds the expected deficit for next year. Much of the savings comes from injecting competition into government operations, providing government employee fringe benefits comparable to (generous) private sector plans or eliminating non-core functions.
Change the higher education funding mechanism to a standard "per-pupil foundation grant" in which the money is attached to the students, rather than each university getting an amount determined by legislative maneuvering. As colleges were forced to compete for students, they would "sharpen their pencils," rein in costs and eliminate the kinds of inefficiencies highlighted in recent audit reports. If the effect was that costs fell by just 5 percent, the savings would be: $70 million.
Shift state police road patrols to less expensive county sheriff deputies. With benefits and related expenses it costs more than $100,000 per year to employ a state trooper; most sheriff deputies cost much less to employ. Effect on public safety: Zero. Savings: $65 million.
Adopt the Hay Group report recommendations on rationalizing public school health insurance, including requiring co-pays and preferred provider networks. This could save: $422 million.
Eliminate the Michigan State University cooperative extension service and agriculture experiment station to save: $61 million.
The original version of this list recommended halting the so-called "21st Century Jobs Fund" before it borrowed and spent $400 million. It’s too late for that now: All but $33 million was spent before the 2006 election, and taxpayers will be repaying the debt for decades. At the very least, the bleeding can be stanched — $75 million of what is being characterized as a "$1 billion state deficit" is new borrowing for this boondoggle. Skip it and save: $75 million.
According to a Rio Grande Foundation report, if 5 percent of prisoners are placed in privately-managed prisons, the state saves 14 percent on overall prison spending because government-managed prisons have an incentive to "sharpen their pencils." Savings: $192 million.
Eliminate "History and Arts" subsidies, and cut state library subsidies in half: $35 million.
In 1999 the Citizens Research Council noted that "a number of changes have occurred over the past decade that have reduced the need for intermediate school districts." Let’s help the ISDs catch up by reducing their operations grants: $32 million.
Cut so-called "20j" payments to affluent schools in half. This extra money is a political response to the fact that under Proposal A certain wealthy school districts benefit less from per-pupil state foundation grant increases than other districts. (They still benefit, though.) Savings: $26 million.
Cut transit funding in half. By eliminating protectionist regulations that restrict alternatives, empty buses driven by public employee union members can be replaced by private sector innovations like jitneys, commercial van pools, "call-and-ride" services, car-sharing and more. This will improve service for transit users at a much lower cost: $112 million.
Repeal the "prevailing wage" law that requires above-market rate wages be paid on school construction projects: $150 million.
Schools can realize huge savings by privatizing non-core functions like transportation, food service and custodial. Many have already done so: The Mackinac Center’s most recent survey of school privatization shows that 38.5 percent of school districts already have a competitive contract in place for one of these functions. Some idea of the magnitude of these savings can be seen in the experience of one district that saved the equivalent of $177 per student by contracting out for its custodial needs. Statewide, similar savings would add up to $300 million annually! In the short term, it would not be unreasonable to expect: $65 million.
Reduce the Merit Award Scholarships by 50 percent. Shockingly, at the governor’s request, the Legislature just did the opposite and increased these non-need based college scholarships by $64 million annually beginning in 2010. When families face economic hard times, the first thing they do is cut luxuries. This is a luxury Michigan can no longer afford. $60 million.
The state spends almost $15 billion on Medicaid and welfare, more than $6 billion of which is from state taxes and fees. Medicaid in particular is a command-and-control monstrosity rife with perverse incentives. Reforming it in ways that give recipients an incentive to economize and take better care of themselves could save hundreds of millions of dollars, while actually giving recipients greater freedom and choice. If just 1.6 percent of the expense in these two programs could be reduced in this way, the state would save: $240 million.
Thousands of private sector workers have given back painful wage and benefit concessions to save their jobs. The average state employee receives salary and benefits worth nearly $75,000, compared to approximately $58,000 in the private sector. Comparisons of specific job classifications produce similar comparisons. State workers should be grateful for their much greater job security and benefits, and more than willing to assume some of the burden through concessions. $300 million.
Total: $1.9 billion.
There is a common theme that runs through opposition to every one of these common-sense reforms: "That’s not the way we’ve done it in the past."
That’s not good enough anymore: Michigan has already passed the tipping point of going from relative decline in population and income to absolute decline. Without major reforms there’s nothing to prevent the entire state from going the way of Detroit, with a declining population and an economy that is unable to support a government establishment that believes its residents exist to serve it — not the other way around.
None of the items above would be "devastating" to the state, to "vulnerable populations" or even to any particular interest group. Most people would not even notice that these changes had taken place. The alternative, a major tax hike, will only drive more people out of Michigan and hasten the impoverishment of a formerly rich state economy that in this decade has become a poor one.
Note: This list combines reductions from current budgets, and speculative savings that assume certain policy reforms. It is intended as a plausible illustration of what is possible, not as a precise roadmap.
Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.
Monday, September 10, 2007
Friday, September 7, 2007
As the contract talks continue, GM pushes for changes necessary for the financial solvency and future of the company while at the same time "suggesting" that if it doesn't get the needed concessions that it will be forced take its business outside of the U.S.
The biggest concessions on the table are;
- Ford and GM have made it clear that they expect to reduce the hourly cost from $71 to about $50 - a cut of about 30 per cent. The companies are keen not to cut workers' hourly pay, but they insist that other overheads must be reduced. http://observer.guardian.co.uk/business/story/0,,2156191,00.html
- General Motors Corp., Ford Motor Co. and Chrysler LLC have proposed making lump- sum payments to the UAW in exchange for being relieved of liability for much of their collective $90 billion in unfunded long-term retiree health care costs. The union would then set up trust funds, referred to as Voluntary Employees Beneficiary Associations, to pay all future costs from those funds and investment income. http://ap.google.com/article/ALeqM5hZL7LQxsN6ScGxNKD0raqzYCpSZQ
Of course at this point the UAW has to make like tough guys for the "kool aid" drinkers in its membership. However it's to early to tell if its really an act or the delusional death woes of a organization that has become what it was first organized to fight against. I can only hope its an act.
If the UAW is determined to "show management" and even strike it will be the end of American car manufacturing as we have known it at the expense of its membership.
So I think this would be a perfect time to reconsider the issue of Michigan becoming a right-to-work state.
Waiting for a National Right to Work Act.
By Deroy Murdock
Americans will skip work Monday to celebrate what really should be called Leisure Day. But this Labor Day, an estimated 7.2 million privately employed Americans (and even more public-sector workers) could relax more thoroughly if they were not compelled to join labor unions and/or pay union dues as job requirements. That’s why the time is now for the National Right to Work Act.
Congressman Joe Wilson and Senator Jim DeMint, both South Carolina Republicans, have sponsored legislation to restore a woman’s right to choose whether or not to join a union and a man’s right to choose whether or not to pay union dues.
“The National Right to Work Act simply erases the forced-dues clauses in the  National Labor Relations Act and  Railway Labor Act without adding a single letter to federal law,” Wilson told House colleagues as he introduced his measure last January. “Passage of this bill would return to working Americans the freedom of choice that never should have been stripped from them in the first place. Furthermore, passage of the National Right to Work Act would dramatically increase both the freedom and the prosperity of all Americans.” Wilson’s bill features 83 House co-sponsors.
Beyond the boost in individual liberty that Wilson and DeMint advocate, abundant evidence demonstrates that America’s 22 right-to-work (RTW) states significantly outperform the overall U.S. economy, while forced-unionism states trail both.
- For instance, the National Institute for Labor Relations Research found that between 1982 and 2004, manufacturing establishments expanded 4.5 percent in RTW states. While they shrank 5.3 percent nationwide, they shriveled in forced-unionism states: down 9.3 percent.
- From 1995 to 2005, private, non-farm employment advanced 20.2 percent in RTW states, ahead of the 14.5 percent national average and 11.3 percent hike in forced-unionism states.
- RTW states saw $50,571 average, real household income in metropolitan areas in 2002. That year, the $48,310 U.S. figure trumped its $46,431 counterpart in Big Labor states.
- In 2004, 71 percent of households in RTW states owned their homes, versus 69 percent across the USA, and 68 percent in mandatory-unionism states.
- RTW residents more broadly enjoy medical coverage. Between 1995 and 2005, the Census Bureau reports, the number of individuals carrying private health insurance climbed 11.9 percent in those states. The 7 percent national average once again outstripped the 4.4 percent increase in compulsory-unionism states. Meanwhile, the number of children with private insurance rose 9.3 percent in RTW states and 2.9 percent, on average, across America. But in forced-union states, the number of boys and girls with private coverage actually slipped 0.5 percent.
So, do RTW laws catalyze greater prosperity, or are RTW states the kinds of jurisdictions that cut taxes, deregulate, preserve property rights, and otherwise encourage capitalism?
More pastorally, are RTW laws the animal feed that fattens the chickens, or are they the roosters that believe their crowing summons the sunrise?“States with Right to Work laws tend strongly to have other pro-growth policies,” says Mark Mix, president of the National Right to Work Committee. “But Right to Work laws themselves play a very important role in fostering a good climate, both for enacting other pro-growth policies in the first place and for maintaining them in the face of strong opposition from Big Labor.”
Mix adds that in non-RTW states, “union campaign operatives use a huge chunk of the forced dues they grab to elect politicians who are beholden to Big Labor’s agenda of higher taxes, more government spending, and straightjacket regulation of business.”
Conversely, Mix maintains, union bosses in RTW states lack access to compulsory dues, thus limiting their spending and activity to promote statist politicians and policies.
Nevertheless, and especially on this holiday, Big Labor still sings the praises of unionism.
“More than 97 percent of union workers have jobs that provide health insurance benefits, but only 85 percent of nonunion workers do,” the AFL-CIO crows. “Unions help employers create a more stable, productive workforce —where workers have a say in improving their jobs.
”These are appealing arguments. Union bosses should have enough faith in themselves and what Big Labor offers that they can attract U.S. employees through persuasion rather than coercion.That is all the National Right to Work Act asks.
© 2007, Scripps Howard News Service— Deroy Murdock is a New York-based columnist with the Scripps Howard News Service and a media fellow with the Hoover Institution.
Wednesday, September 5, 2007
GM gains surprise analysts while Toyota posts rare decline
Last Update: 5:41 PM ET Sep 4, 2007
GM posted a surprisingly strong 6.1% increase in car and light truck sales in August, nudging the seasonally adjusted annual rate of sales to 16.3 million, according to Autodata, easily topping Thomson Financial estimates of 15.9 million.
The data raise questions about whether the industry has reached a turning point, or whether GM's upbeat report and Ford's rosy outlook will succumb to increasingly harsh economic realities -- realities that last month knocked seemingly invincible Toyota
Ford was the first to report and gave an early glimpse of what was shaping up to be the worst stretch for the automotive industry in almost a decade, reporting a 14.4% decline, slightly worse than the 13.2% drop analysts had expected.
Ford takes biggest lumps
Truck sales fell 2.4%, with the flagship F-Series pickup showing a 9.9% decline.
In the luxury division, which is currently being shopped around, Land Rover sales surged 32.2% while Jaguar and Volvo both logged double-digit declines.
GM posted a 6.1% increase in light vehicle sales to 385,529 cars and trucks from 363,521 a year earlier. Analysts, on average, were looking for a decline of about 4%, according to Thomson Financial. Total sales, including heavy trucks, rose 5.3% to 388,168.
Still, GM cut its third-quarter production forecast by 2% to 1.05 million vehicles. For the fourth quarter, GM said it is looking to build 1 million cars and trucks.
Lexus passenger car sales rose 7.7% to 19,789 vehicles from 18,376 a year earlier. Light-truck sales rose 2% to 97,964 from 96,034 a year earlier.
Car sales increased 11.7% to 91,448 from 81,868, while truck sales fell 3.6% to 66,894 from 69,385. Honda division sales totaled 141,906 in August, up 6.7% from 132,990, a year ago. Sales at the Acura division fell 10% to 16,436
By Martin Miller
Los Angeles Times Staff Writer
September 5, 2007
Among the nearly two dozen television DVDs slated for nationwide release on Sept. 11 is the second season of "Bones," the third season of "Grey's Anatomy" and the miniseries "The Starter Wife" that aired earlier this year. Not on the list on that day or any other in the near future is last year's highly controversial "The Path to 9/11."
The $40-million, five-hour ABC miniseries, which recently received seven Emmy nominations and drew a combined two-night audience of more than 25 million viewers, is for now on the path to nowhere. Its Amazon page reads: "Currently unavailable. We don't know when or if this item will be back in stock."
With no date for the release, questions are being raised about whether political pressure is behind its current status as a stalled or discarded DVD project. The reasons are murky, but the miniseries' writer, Cyrus Nowrasteh, believes it's crystal clear: Powerful forces are out to protect Bill Clinton's presidential legacy and shield Sen. Hillary Rodham Clinton (D-N.Y.) from any potential collateral damage in her bid for the White House.
Nowrasteh, also one of the miniseries' many producers, said he was told by a top executive at ABC Studios that "if Hillary weren't running for president, this wouldn't be a problem."..... read entire article here: http://www.latimes.com/entertainment/news/homeentertainment/la-et-path5sep05,1,1332927.story?coll=la-headlines-entnews&ctrack=1&cset=true
And this article was in the LA Times!
Well I think we should contact ABC inquiring when
we can purchase "The Path to 9/11?"
And just to make it convenient for you all,
here is ABC contact information
My e-mail letter to ABC;
I want to purchase on DVD your excellent mini-series "The Path to 9/11?"
Why is it being delayed?
Sept. 11 is fast approaching and it is a perfect time to sell and own this movie
PLEASE RELEASE IT ASAP!
My name here
My city, state here
Wednesday, August 29, 2007
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Tuesday, August 21, 2007
Posted: Jul. 19, 2007
Anatomy of a Tax Hike Campaign
Mackinac Center for Public Policy
This chronicle is derived from a number of sources. It heavily relies on and (since it was originally created for internal use) in some cases uses text from the daily Michigan Information & Research Service Inc. Capitol Capsule (hereinafter “MIRS”), which it has graciously granted permission to reprint with this citation.
Other sources included the Gongwer News Service Michigan Report, the Detroit News, the Detroit Free Press, the Mackinac Center for Public Policy, the Citizens Research Council of Michigan, the Michigan House and Senate Fiscal Agencies, the MichiganVotes.org web site, Michigan Gov. Jennifer Granholm’s web page, the Washington-based Tax Foundation, the daily sessions of the Michigan House and Senate, and personal conversations. For the most part, the chronicle was created in real time based on a mixture of sources.
From 1995 to 2001, Michigan state revenue from state sources grew approximately 10 percent faster than combined inflation and population growth. From 2001 to 2007, spending and revenue growth were approximately 10 percent below inflation plus population. At the end of this 12 year period, state spending and revenue were almost exactly where they were at the start, adjusting for inflation and population changes.
Beneath these figures is the reality that the prison population has grown nearly 20 percent, and spending on health care programs for the poor (Medicaid), and on health insurance benefits for state and school employees, have greatly increased, crowding out spending in other areas of the budget. On the other side, there is abundant evidence that the cost of government operations including state and school employee compensation is excessive in what is becoming a poor state.
Since 2000 Michigan has lost more than 350,000 jobs. For several years the state’s unemployment rate has been 50 percent above the national average. The state is losing population, and its per capita personal income has been falling since 2001. Its mortgage foreclosure rate is among the highest in the nation, and in most areas property values are falling.
A citizen petition drive is approved by the Republican-controlled legislature, repealing the state’s main business tax as of Jan.1, 2008. The so-called “Single Business Tax brings in $1.9 billion annually, out of a total budget of $42 billion, $26 billion of which is from state sources. Gov. Jennifer Granholm had vetoed earlier legislation to do this, but under the citizen-initiated action process she had no role this time.
Gov. Jennifer Granholm is re-elected to a second term with a substantial margin. Republicans retain their majority in the state Senate, but lose the state House. Sen. Mike Bishop, R-Rochester, is selected as the new Senate Majority Leader, presiding over a 20-18 majority, and Rep. Andrew Dillon, D-Redford Township, is selected to be the new Speaker of the House, where his party has a 58-52 margin.
During her first term Granholm presided over a period of flat or declining state revenue, federal money excepted. Cooperative GOP leaders in the House and Senate during the first two years allowed her to increase a number of peripheral taxes, including cigarette taxes and an indirect property tax hike. A new House Speaker in the second half of her term closed that window. Granholm has been frustrated by budget constraints, and by an inability to reward the public employee unions that are viewed as a cornerstone of her political base.
Dec. 8, 2006
It is revealed that three state departments had violated the Constitution by spending some $70 million more than the legislature appropriated for them in the fiscal year that ended on Sept. 30. In testimony to a joint legislative committee on Dec. 13, Gov. Jennifer Granholm’s budget director Mary Lannoye admits that she new about the overspending as early as August. There is speculation that the information was deliberately concealed until after the election.
Addendum: The final amount was $69 million. The three departments are: Corrections, which overspent its $1.940 billion appropriation by $19.6 million, Human Services, which exceeded the $4.468 billion appropriated for it by $42.9 million, and the State Police (MSP), which spent $6.6 million more than their allotted $569 million.
Dec. 8, 2006
On the same day, it was reported that the directors of the House and Senate fiscal agencies and Citizens Research Council analyst Tom Clay are predicting that already-passed appropriations for the fiscal year that began on Oct. 1 will likely exceed revenues by $250 million to $500 million. (The figures include making up for the $69 million of overspending in the previous year.)
Dec. 17, 2006
An article in the Oakland Press paints a gloomy picture of the liabilities the state has and continues to incur in unfunded state and school employee pension and retiree health benefits. Phil Stoddard, a state workforce official pegs the health care component of the unfunded liability at $20 billion. Under new accounting rules that will phase in the next three years (GASB 45), state and local governments will have to include these liabilities in their financial statements. An accountant and former state and county official quoted in the piece explains, “This is really what happened to companies like Ford and GM. They found out how much they have been giving away as far as health costs and said, ‘Holy cow’.”
Dec. 20, 2006
House Fiscal Agency Director Mitch Bean projects that “spending pressures” for Fiscal Year 2007-2008 will exceed projected revenues by at least $680 million. This comes as the Granholm administration is preparing its budget recommendation for that year, to be released in early February.
Dec. 21, 2006
In a wide ranging discussion with reporters, Granholm refuses to rule out the possibility of a tax increase in the coming year. Casting the issue in terms of economic growth she says, “It would not be a wise course, I think, to cut the things that I think make us competitive as a state.” This interview causes widespread speculation that she is “preparing the ground” for a tax hike, in the words of one news headline. Similar talk from other administration officials follows over the next few weeks.
Jan. 5, 2007
(all dates henceforth are in year 2007)
In a TV appearance, Lieutenant Governor John Cherry said that the administration’s likely response to these budget issues will include “new revenue,” and if it does this “needs to be sold” to the public. He says he is confident that can be done: “If we go there, it’s because we believe it can be sold and we’d make every effort to do that and make the case that it’s necessary.”
The Mackinac Center reports that, “in 2006, 66 percent of United Van Lines’ Michigan-related moves took households out of Michigan, rather than into the state, tying Michigan with North Dakota for the highest rate of outbound moves, and the worst level seen since 1981, when 66.9 percent of Michigan moves involved a departure from the state.”
Gov. Granholm announces that she is convening an “Emergency Financial Advisory Panel” co-chaired by former Govs. Milliken and Blanchard to recommend a solution to the state’s “current financial crisis” within 20 days. The panel consists exclusively of individuals known to be friendly to tax increases – including the two former governors – with no notable representatives from the private sector.
Mackinac Center senior economist David Littmann tells the audience of popular Detroit radio host Frank Beckmann the same thing he was reported saying in that day’s Detroit News and Detroit Free Press, which is, “These are the people (on the Granholm panel) who presided over Michigan’s economic decline. The probability they will come up with something creative is as close to zero as you can get.” Littmann explains that tax increases will not lead to prosperity, and identifies spending reforms the state should instead undertake.
The director of the House Fiscal Agency speculates in press reports that due to balances in state accounts coming in lower than previously expected when the books were closed on FY 2005-2006, and “spending pressures” that exceed previous estimates, spending for the 2007 fiscal year that began on Oct. 1, 2006 will exceed projected revenues not by $250 to $500 million, but by $780 to $880 million. This could mean a $218 reduction in per-pupil distributions to schools. He expects similar spending in excess of revenue for the next fiscal year as well. The director of the Senate Fiscal Agency briefs incoming Senate Democrats, giving them similar numbers.
After a week of releasing various tidbits of dire information, including a report showing month-to-month state tax collections continuing to fall, the non-partisan legislative fiscal agencies, Department of Treasury and academic economists from the University of Michigan finalize the revenue estimates that the governor and legislature will use to create their annual budgets in the coming months. The bi-annual revenue estimating conference projects that for the current fiscal year revenue will fall $762.4 million short of the amount of spending already appropriated, of which $206.4 million is the result of both over-spending and lower-than-expected revenues in the fiscal year that ended Sept. 30, 2006.
For the fiscal year that will begin Oct. 1, 2007, the conference projects that the revenues will increase by a modest $313 million above the revised current-year estimates, assuming the legislature adopts a revenue-neutral replacement for the Single Business Tax that expires on Dec. 31, 2007. The Senate Fiscal Agency projects that the gap between desired spending and expected revenues in FY 2008 will be $732 million, assuming full replacement of SBT revenue, and $1.9 billion with no replacement.
Granholm budget director Robert Emerson hints that the administration would seek higher taxes: “I don’t think you can fix this with just efficiencies.”
Perhaps more ominous for their “real world” implications, the consensus is that statewide there will be 1.682 million public school pupils in the current year, down 7,900 from the figure estimated last May, and the figure is expected fall by another 15,000 next year to 1.667 million.
Finally, the experts gloomily project that total employment in the state will not see the levels achieved in 2000 until sometime between 2013 and 2020. This would far exceed the length of the Great Depression that began in 1929. Since 2000 Michigan has lost 362,700 jobs, which is fewer than the 533,700 lost in the recession that began in 1979. UM economist George Fulton estimated that the state will lose 27,200 more jobs this year and another 13,200 jobs in 2008.
Senate Republicans unveil a replacement tax for the SBT that would take in $1.51 billion, approximately $300 to $500 million less than the SBT. Details are sketchy, but this is seen as their opening bid in bargaining with a governor who insists on replacing all the SBT revenue (and is widely expected to propose additional taxes as well.) “Who would pay for these tax cuts?” asks Granholm press secretary Liz Boyd.
Using tax dollars filtered through various entities, the “Michigan Fiscal Responsibility Project,” an organization comprised of municipalities, universities, hospitals and other entities that rely on government spending hires a Lansing PR firm and launches a publicity campaign promoting a tax increase.
The Senate Fiscal Agency issues a memo describing the kinds of cuts that would be required to balance the current year’s budget, assuming a that revenues will fall short of already-appropriated expenditures by $818 million, and that no changes of any kind are made in the way the government is operated (such as privatization or employee benefit reductions.) The list of cuts include closing 12 prisons (saving $190 million), lowering health care provider payment rates for Medicaid patients (saving $294 million), reducing higher education funding by $191 million, cutting revenue sharing by $41.6 million and welfare by $120 million.
The Citizens Research Council releases a study showing that revenues to the state and local governments in Michigan rose from $32.5 billion in 2002 to $35.9 billion in 2005. For the state alone revenues rose from $22.4 billion to $24.3 billion during the period. (Located at http://crcmich.org/PUBLICAT/1990s/1999/rpt327d.pdf)
The House Minority Leader, Rep. Craig DeRoche, publishes an op-ed in the Detroit News blasting Granholm for failing to limit the growth of government spending, including approving $300 million employee compensation increases. The op-ed signals that the House GOP caucus is less likely to produce any “defectors” for a tax increase vote.
Jan. 25 – Jan. 31
Various leaks from the Granholm “Emergency Financial Advisory Panel” are reported. Among them: The group favors a sales tax on services, but will not recommend anything specific. The group debated an income tax increase, with former Sen. Joe Schwarz urging it, but memories of recall campaigns after a similar move in 1983 tipped the balance against. The group will just “educate” the public on how the state arrived at this “crisis,” and will recommend ‘investing for future’ in programs and policies that will make state more competitive, such as education.
The Michigan Chamber of Commerce – the state’s largest and most influential business group – calls for a nine-cent per gallon increase in the state’s motor fuel tax. This is just one item on their annual list of legislative priorities, including a business tax cut and government cost-cutting, but it is practically the only item reported by the media. Note: The gas tax is almost completely separate from the other parts of the state budget, and an increase would have no affect on “the deficit crisis.”
The Granholm “Emergency Financial Advisory Panel” releases its report. As expected it makes no specific recommendations, but does state that “the deficit” cannot be closed with cuts alone, that there should be no business tax cut and that “revenue increases” are required. In addition the report calls for reform of state and school employee pensions and retiree health care benefits, noting that these represent a $35 billion unfunded liability, that schools spend more than $1,200 per pupil for employee health benefits, and recommending that these be no more generous than private sector benefits. The report also calls for a lowering of prison populations, and increased spending on higher education, health coverage for uninsured persons, “cultural” and recreational resources, and “vibrant cities.”
Gov. Granholm delivers her annual State of the State address. She proposes 20 expansions of government that would cost hundreds of millions of dollars, but only vague and timid cost saving measures. The governor strongly hints that tax increases will be a part the budget she recommends two days hence. She uses the word “investment” 28 times during the speech as a synonym for government spending.
Gov. Granholm recommends a budget for the next fiscal year that increases state spending by $1 billion. It is accompanied by tax increase proposals that would net an additional $1 billion annually, including 2 percent excise tax on all services except health care and education. This includes business-to-business transactions, which means the tax will be “pyramided” as it passes through a firm’s supply chain, potentially adding much more than 2-percent to costs. For many that would cancel out any savings from a new business tax the governor also proposes that would net $480 million less revenue than the expiring Single Business Tax.
To close a gap in the current fiscal year between previously appropriated spending and expected revenues, the governor proposes some modest program and department cuts. The majority of the gap would be closed with tax increases, an accounting gimmick (shifting funding to universities into the next year) and by shortchanging state employee pension contributions by $93 million (through a revision in actuarial asset valuation formulas.) Another $192 million in pension fund shortchanging is part of the overall budget package (not included in the executive order.)
Rumbles begin. Former Rep. Leon Drolet launches a taxpayer group with the intention of recalling certain legislators who vote for a tax hike, generating memories of a 1983 tax-hike revolt that led to the recall of two Democratic state senators, tipping that body over to GOP control under the leadership of – Sen. John Engler. Trade associations including the NFIB, the state Bar and Realtors begin to simmer. Even government-friendly reporters and editors believe the governor has overreached by offering not only no substantive spending reforms, but massive increases.
Prison union officials and legislative Republicans express reservations about a provision in the governor’s budget proposal to change sentencing guidelines to release 5,000 of 50,000 prisoners.
Late February, various datesProperty owners in most communities receive property tax assessment increase notices, despite the fact that real estate values are flat or actually lower. The increases are due to a provision in the Proposal A law that allows assessments to be adjusted upwards with the Detroit area consumers price index, which was pegged at 3.7 percent for the previous year. In addition, assessments are based on sales from two years prior to the previous April, which includes a period of rapidly increasing property values. Press reports feature grumbling or angry homeowners.
A constitutionally mandated executive order cutting current year spending to match expected revenues is voted down by the Republican-controlled Senate Appropriations Committee. The order was premised on passage of the governor’s 2 percent service tax by June 1. The defeat requires the governor to schedule another executive order within 30 days.
The Southern Michigan Correctional Facility, one of five state-run prisons in Jackson, will close by July as the Department of Corrections (DOC) moves forward with a restructuring plan designed to save $92 million in Fiscal Year (FY) 2008.
From MIRS: “Mackinac Center Senior Economist David Littmann released data showing that Michigan’s per capita personal income in 2005, as compared to the average for the rest of the U.S. was lower (95 percent) than it had ever been since at least 1929, and he believes it is even lower now. ‘I think we’ll be seeing it at about 7 percentage points below (the U.S. average),’ Littman told MIRS. Littman said that, in terms of per capita income, Michigan’s actually doing worse than it did in any of the seven recessions it’s gone through since 1934.”
It is reported that MESSA, the MEA teachers union’s insurance arm reported a $130 million profit in 2006, and $268 million in assets. The union does not underwrite insurance, but merely administers Blue Cross plans for around half the state’s school employees.
The Detroit News reports that the Detroit Public Schools is looking into the previous administration’s purchase of more than $1 million in artwork. The district is operating within a state-mandated plan to eliminate its $200 million deficit and has faced criticism for its spending and contracting practices.
A House Fiscal Agency report shows that school districts ended 2006 with a total of $1.7 billion in reserves. Nearly two thirds of all districts (63 percent) had fund balances exceeding 10 percent of their annual budget. The MIRS story reports, “22 school districts and charter schools finished ‘06 in debt and 9 percent finished with fund balances of 2 percent of their operating budget or less. Sixteen percent (135) finished with fund balances of 5 percent or less. Nearly two-thirds of school districts (63 percent)
ended FY ‘06 with a balance of at least 10 percent of the operating budget.”
Reportedly, in school tax and bond elections around the state on this day, three out of four fail.
The governor’s tax plans are finally introduced as actual legislation.
Gov. Granholm takes her proposal on the road, defending it in a series of carefully orchestrated broadcast “town hall” meetings around the state.
Comerica Bank, headquartered in Michigan for almost 150 years, shocks many in the political establishment with the announcement that it is moving its headquarters to Dallas. The move follows an earlier announcement by Pfizer that it will close a drug research facility in Ann Arbor, costing the state 2,000 jobs.
Democratic leadership in the House announce they will end the generous lifetime health benefits paid to former lawmakers, and cut other expenses.
The Mackinac Center releases an econometric study showing that the two percent service tax would cause the loss of 19,000 jobs by the end of 2008, and because of its “dynamic” effects on the economy would bring in $221 million less revenue than the $1.47 billion the administration projects.
The Michigan State Police announce that they are trying to reduce the miles driven by troopers in order to save gas. Earlier, it had been announced that 30 troopers would be laid off. Some view the announcements as a tactic by the executive branch to convince the public that a tax increase is justified.
The Wall Street Journal blasts the Granholm tax-and-spend plans in its lead editorial, pointing to the Comerica departure as symptomatic of what such policies bring. The piece cites analysis by Mackinac Center economist David Littman of the Mackinac Center showing that the per capita income in the state fell to its lowest level in 75 years in 2005, relative to the national average.
The Michigan Chamber and the Michigan Association of Realtors begin running a TV ad against the two percent service tax.
A Standard & Poor’s Ratings Services report warns, “Should the state delay acting on tax and budget reform measures, however, further rating deterioration is likely.” Gov. Granholm says this is endorsement of her tax increase plans. The report also says, “If such a large amount of cuts that late in the year is even possible, they aren’t likely to be very palatable and they may not be sustainable. . . . Cutting taxes or providing economic incentives for businesses is not going to create revenue to address the current shortfall.” Several weeks previously Moody’s Investors Service dropped the state’s rating from Aa2 stable to Aa2 negative “based on the state’s pronounced economic under-performance and chronic budgetary stress in recent years, which has been caused in large part by the continuing decline of the U.S. automobile industry.”
Media polls are released indicating that the 2-percent service tax enjoys support with less than 30 percent of the public. Support for a possible income tax hike is even lower.
March 19 - 22
Unions including the SEIU, the AFL-CIO and the MEA “turn up the volume” on their urging the legislature to increase taxes rather than reduce government spending, issuing press releases and generating member contacts to lawmakers and media.
Following a “dance” of conflicting meeting schedules, politicized “no-shows” and dueling press releases, Gov. Granholm and Senate Majority Mike Bishop have a budget meeting.
Rep. Jacob Hoogendyk introduces HCR 7 to reject proposed increase state employee pay raises recommended by the Civil Service Commission and contained in the Executive Budget for Fiscal Year 2007-2008. This refers to the further installments of a 10 percent pay hike over several years that Gov. Granholm had negotiated during her first term of office. Disapproving upcoming pay hikes would require a two-thirds vote in the House and Senate; the raises will add $123.5 million to Fiscal Year 2008 spending, $76.1 million of which are general fund dollars.
Gov. Granholm releases a second Constitutionally-mandated Executive Order to match current year to match it with expected revenue. Like the first order, the $344 million affected primarily consists of accounting changes, and reducing deposits into government employee pension and post-retirement health care funds to the legal minimum (which is significantly below the actuarially sound minimum), but also included some actual “hard” cuts. Unlike the first order, the governor does not implicitly assert that this contingent on a tax increases, but instead simply says it’s only a “partial” solution. The Senate Appropriations Committee approves the order.
On the same day, the Senate passes Republican budget cut bills. These also are heavy on pension shorting and accounting gimmicks, but also include $300 million in actual spending cuts (“hard cuts”) from the current year budget, including a $34 per pupil cut in foundation grants to schools, and cuts to scores of other spending line items. (See Senate Bills 220 and 221.)
Finally, the Senate brings up the Governor’s “two penny” service tax proposal, and defeats it on a mostly party-line vote (one Democrat votes “no.”) On the previous day, the Chair of the House Appropriations Committee introduced a bill to increase the state income tax from 3.9 percent to 4.6 percent.
MIRS: The Department of Treasury informs the governor that the state is facing a $400 million cash-flow problem as early as May, spurring unconfirmed reports that the front office has asked her department heads to formulate a government shutdown contingency plan by May 1. The next day Treasury officials describing some contingency plans, and discussing implications for the state’s bond rating, are accused by Republicans of using “scare tactics.”
On the last day before a Constitutional deadline, the House Appropriations Committee approves the March 22 Executive order to fill about a third of what is now projected to be a $941 million budget hole for the current fiscal year.
Both houses of the legislature fail to act before a deadline on a measure that would reject $109 in savings that could be realized by rejecting upcoming installments of state employee pay raises granted by Gov. Granholm three years earlier. The following day House Republicans launch an “online petition” calling for the rejection. This is political and has no force of law.
Gov. Granholm issues 10 executive directives that include a moratorium on all state grant payments, news agency subscriptions, service contracts, temporary employees, travel, performance pay awards, employee training or any new hires.
House Speaker Dillon proposes a vague plan to repeal a electric utility competition law – something DTE and other state electric companies have lobbied for intensely – and raise $500 million in new utility taxes as a means of addressing budget problems. The plan is widely panned in the following weeks and little more is heard, although the large utilities continue a heavy lobby campaign to restore their monopolies. Three weeks later Republican legislation is introduced in the Senate to expand competition.
The Citizens Research Council releases a report showing that in 2006 there were 391 ballot issues asking voters to raise or renew taxes, or for “Headlee overrides.” Only 47 percent of the tax issues passed. In 2002, there were 300 such requests, and 52 percent passed. In 2004, the numbers were 350 and 59 percent
House Democrats hold a news conference to announce their “plan” to resolve the state’s budget problems. Instead of providing specifics, they discuss a variety of ideas, most of which either have no chance of being adopted, or relate to long term issues. One of these is the now infamous $38 million idea of providing iPods to all schoolchildren. It is later revealed that a number of legislators including the House Speaker accepted a California trip paid for by iPod maker Apple Computer.
The Attorney General announces a plan to install a gym in the department’s building. No cost figures or fund source are specified. Later, the cost is pegged at $60,000 with no state money involved, but the proposal in disapproved by DMB.
The state police troopers union offers $400,000 to the state to postpone the proposed layoff of 29 troopers.
The Detroit Free Press article reported that the state spends $359,000 to provide personal cars to judges on the Supreme and Appeals courts. On April 16 House Democrats announce that they will move to take away the cars.
It’s reported that a recent Tax Foundation study shows that Michigan’s total state and local tax burden as a percentage of personal income is 11.2 percent, ranking third (among five states) in the Midwest for highest tax burden, and moving from 26th place nationwide in 2004 to 14th worst in 2007. Ohio and Wisconsin had burdens of 12.4 and 12.3 percent, respectively. Illinois and Indiana had burdens of 10.8 and 10.7 percent, respectively. State Treasurer Robert Kleine disputes the figures, which are based on projections of trends.
House Democrat Fred Miller, proposes a 6 percent service tax on selected services described as “amenities.”
House Fiscal Agency Director Mitch Bean says the current $686 million budget deficit for Fiscal Year 2007 (after the Executive Order) likely will grow another $100-$300 million after state official budget officials meet again in May to discuss state revenues.
The House passes its version of a partial fix for the current-year spending and revenue gap, which includes a $7.50 per ton tax on solid wasted dumped in landfills (the current tax is 21 cents), expected to take in approximately $150 million annually. The House passes a number of smaller tax hikes (“loophole” closings) and rejects most of the Senate’s budget cuts, but accepts all of its accounting gimmicks, and adds some of its own. Although the House does not accept the Senate’s $34 per pupil school cut, it fails to completely close the gap in the School Aid Fund, which means that the cut will be imposed anyway by way of a statutorily-mandated “pro-rated” Executive Order cut. Given ongoing declines in revenues, this is expected to be as much as $122 per student (which would still mean a net increase of $85 from FY 2006.) The House repeals a previously appropriated 3 percent hike in university funding for the current fiscal year.
Approximately 350 citizens waving tea bags backed up by a giant fiberglass pig assemble in front of the state Capitol steps to protest proposed tax hikes. The protest was first organized before the Governor’s 2 percent service tax proposal was defeated, and at that time organizers had hopes of turning out thousands of service providers targeted by that tax.
The House announces employee benefit cuts as part of an announced effort to cut 5 percent from its own budget. The legislature has a $116 million budget. The House and Senate combined have roughly about 700 employees.
Michigan ranked 44th in the country and scored “D-minus” on a “Entrepreneurship Score Card” compiled by the Small Business Association of Michigan that uses 122 factors to measure public policy impacts on “entrepreneurial dynamism.”
Supreme Court Chief Justice Clifford Taylor says the state has too many judges for its needs, including Court of Appeals judges. In recent years the court has recommended that the legislature establish new judgeships in some areas and eliminate them in others, but for the most part only the politically popular first part of the formula has been adopted (adding more judges.)
It is reported that in response to the current fiscal situation, Gov. Granholm has asked the Civil Service Commission (CSC) to change the state rules to allow for a 20-day temporary layoff of state workers who do not have union representation. There are 15,371 of these so-called Nonexclusively Represented Employees.
The state Department of Management and Budget orders judges and department heads to turn in their state cars. It will instead reimburse officials for the use of their personal cars on public business. In recent years the size of the state vehicle fleet has been greatly reduced.
April 24The Senate approved the House-passed funding shifts and accounting changes to the School Aid Fund, which effectively trimmed the hole in this year’s state budget to about $399 million.
A Michigan State Police official tells a legislative committee that its current budget may not be sufficient to sustain full operations through the end of the fiscal year, and that one response might be to curtail road patrols in the fall. No drivers appear before the committee to complain.
House Democrats announce a new plan to replace the expiring Single Business Tax. This would be a revenue-neutral package that gets half its revenue from a 7 percent profits tax and half from a 0.488 percent annual tax on a firm’s net worth. It contains an average cut in the personal property (business tools and equipment) tax of 73 percent for industrial firms and 46 percent for other businesses, plus tax credits based on the size of a firms payroll in Michigan compared to other states, and for locating its headquarters here. The plan includes a provision that if in the first two years it takes in more than the SBT by more than 10 percent, a pro-rated credit will be issued to all business taxpayers for the excess.
The Fitch financial rating service downgrades Michigan’s bond rating from AA- with a stable outlook to AA- with a negative outlook, noting that the move reflects “the state’s financial stress,” a sharp drop in sales tax revenue and continued economic weakness. Just three months previously the service had lowered Michigan from AA to AA-. Fitch notes that Michigan’s cash flow problem has been made worse this year because the short-term note sales Michigan has used in year’s past, is showing signs of stress at an earlier point this year.
MIRS reports that earlier in the year Senate Republicans paid for a large, and in-depth, polling survey. This showed that on the general issue of tax hikes, solid percentages of likely voters would oppose such increases. High percentages of Republican voters were strongly opposed to tax hikes, high percentages of Independent voters were opposed as well, and (supposedly) a surprisingly high percentage of Democratic voters said they were opposed to tax hikes.
Tax proponents arguing that spending more on higher education will save the state economy receive a blow from a Detroit Free Press poll released on this date, showing that 53 percent of 640 undergrads polled at UM, MSU and WMU, plan to leave the state when they graduate. Of those who plan to leave, 47 percent cite “go to where good jobs are” as the reason. Chicago, West coast, Northeast or Southern state are destinations cited by 15 percent, 16 percent, 14 percent and 11 percent of those who say they will leave, respectively.
Moody’s Investors service lowers the Michigan bond rating from Aa2 to Aa3, putting Michigan’s rating near the bottom among the nation’s 50 states. The downgrade impacts about $1.6 billion in the state’s general obligation debt and impacts roughly $17.7 billion more in other related debt.
Moody’s reported that the downgrade was spurred by the state’s economic reliance on domestic auto manufacturing, state government burning through its fund balances and government basically using accounting gimmicks instead of structural changes to address its many budget shortfalls. The fact that the Legislature eliminated the Single Business Tax also was listed as a factor. The report specifically attacked Michigan’s response to balancing the Fiscal Year 2007 budget. Analysts said that adjusting pension and retirement benefits, pushing off higher education payments and debt restructuring “are consistent with below-average credit quality.”
The Detroit News describes a memo circulated by Oakland County Deputy Executive Robert Daddow describing alarming developments in the state’s long term financial picture. Their editorial explains that, “for several years, the state has not made full payments to its pension funds. According to the notes to the state’s financial statement, unfunded liabilities for the state employee pension system have grown to $2.5 billion at the end of the 2005 budget year from $1.3 billion at the end of the 2003 fiscal year. For education employees, the unfunded liabilities have grown to nearly $10 billion from $6 billion. . . . (O)ver the last four years (local school districts) have under-funded their pension systems by more than $800 million, he notes. . . . (I)f the state and schools wanted to put aside money for future health care liabilities, according to Daddow, they might have to spend three times as much each year.”
The House and Senate pass competing plans to replace the expiring Single Business Tax. The House plan is “revenue neutral,” raising the same $1.9 billion as the SBT. The Senate plan would mean a $400 million business tax hike.
House Democrats discharge from committee House Bill 4500, to increase the state income tax from 3.9 percent to 4.6 percent. According to rumors, in a closed-door meeting, virtually every member of the caucus indicated that they preferred this to the Gov. Granholm’s moribund “two penny” service tax. Earlier in the week, State Treasurer Robert Kleine says that a proposal to place on the ballot a measure giving voters a choice between an income tax increase or a sales tax increase “has some appeal,” and compares favorably with the 1994 Proposal A initiative, which gave voters a choice between a tax shift that lowered property taxes for homeowners or an income tax hike.
Two stories appear that add to the “cognitive dissonance” of citizens being told that government in the state is experiencing a fiscal “crisis.” Over the preceding five months, a steady stream of similar news reports have appeared on almost a weekly basis:
The Detroit Free Press reports, “nearly 80 municipal officials representing public employee pension funds - more than twice the number of any other state - are planning to attend a weeklong conference on pension issues – in Honolulu. The event is hosted by National Conference on Public Employee Retirement Systems, a nonprofit, public-pension advocacy group.”
The Detroit News reports, “Wayne County commissioners get double the pay, have three times the staff and spend three times the tax money compared with the commissioners in Oakland and Macomb. Wayne County commissioners get double the pay, have three times the staff and spend three times the tax money compared with the commissioners in Oakland and Macomb. The 15-member governing board of Wayne County costs taxpayers $11.2 million a year; Oakland’s board costs $2.9 million.”
Rep. Fulton Sheen introduces a new tax proposal, the so-called “Fair Tax,” which would replace the SBT, Income Tax, and Personal Property Tax with a new 9.5 percent sales tax on all goods and services.
The board of the Michigan Strategic Fund votes to immediately disburse the last $42.8 billion remaining in the “21st Century Jobs Fund,” a business subsidy scheme adopted a year previously which borrowed $400 million through long term bonds. Republicans who had planned to use the money to balance the current-year budget are angered by the move, and especially by the news that state Treasurer Robert Kleine appeared at the meeting to urge the action. It is later learned that the Governor was not aware of Kleine’s actions.
Gov. Granholm announces a June 1 deadline to resolve the budget dispute, or she will begin “shutting down” the government on that date.
MIRS reports that the Granholm administration believes there are nine GOP senators willing to support “some kind of” tax increase. The list includes Sen. Gerry Van Woerkom (R-Norton Shores), Sen. Wayne Kuipers (R-Holland), Sen. Alan Cropsey (R-Dewitt), Sen. Mark Jansen (R-Cutlerville), Senate Appropriations Chairman Ron Jelinek (R-Three Oaks), Sen. Tom George (R-Kalamazoo), Sen. Patty Birkholz (R-Saugatuck), Sen. Bill Hardiman (R-Kentwood) And Maybe Sen. Roger Kahn (R-Saginaw).
Four senators are considered to be “definite ‘No’ Votes”: Sen. John Pappageorge (R-Troy), Sen. Michelle McManus (R-Lake Leelanau), Sen. Alan Sanborn (R-Richmond) And Sen. Randy Richardville (R-Monroe).
The Detroit News begins a three part expose’, “Michigan’s education time bomb: Costly, loophole-ridden retirement system threatens public schools.” The stories detail loopholes in the school employee pension system that allow members to acquire lifetime health insurance benefits with very little service, “double dip” by collecting pension benefits while still working, and more. They explain the billions of dollars in unfunded liabilities the system represents, and how in little over a decade it will consume more than 30 percent of school payrolls. (See also Oakland Press article in Dec. 17, 2006 item above.)
After ongoing budget negotiations involving multi-party “work groups,” and between Gov.. Granholm, House Speaker Andrew Dillon, and Senate Majority Leader Mike Bishop, the latter issues a press release announcing a “deal” on closing the current year budget deficit that involves no tax increase and a $36 per-pupil school aid cut (considered modest compared to the $122 cut expected if no deal is struck.) Half an hour later the Governor and Speaker release a joint statement saying, “No deal.”
A further round of budget negotiations collapse, reportedly because Sen. Majority Leader Mike Bishop refuses to “sign a pledge” to go along with $1.8 billion in unspecified tax increases.
Responding to the collapse of budget negotiations, and to preliminary figures indicating that an upcoming revenue estimating conference will peg the current year deficit at around $700 million even after the budget-cutting Executive Order adopted in March, on a party line vote the Senate passes a Republican bill with most of the same cuts as its March 22 budget plan, plus some new ones, and which also removes $294.5 million that it has been learned was allocated by the “21st Century Jobs Fund,” but not yet actually spent. The plan also “raids” other so-called “restricted” revenues, including $35 million from a state “convention facilities fund,” $70 million from a state underground fuel tank cleanup fund (also the target of a 2004 raid), $20 million from a “Michigan Conservation Corps Endowment Fund,” $70 million from the “Merit Award Trust Fund” that uses tobacco lawsuit money to pay for non-need based college scholarships, and others.
Gov. Granholm tells the state Medical Society that if taxes are not raised “people will die” because of the budget cuts to Medicaid and other social services that she says this will necessitate. Republicans are angered by the remark, and neutral observers generally find it to be somewhat over the top.
The second of two regularly scheduled biannual Revenue Estimating Conferences takes place, with the non-partisan House and Senate Fiscal Agencies, the Department of Treasury and academic economists from the University of Michigan agreeing that revenue for Fiscal Year 2006-2007 will be $195.3 million lower than their January estimate, and $338.2 million lower for FY 2007-2008. Under state law the deficit projected for the School Aid Fund will require a $116 per pupil cut, prorated across all districts, unless cuts are made elsewhere or taxes raised. All told, the gap between desired spending and expected revenues in the current fiscal year is projected to be approximately $802 million. A conference report on Senate Bill 220 that would close $327 million of that gap has not been put up for a vote, but reportedly there is consensus among the parties on this much.
The Office of State Employer sends layoff notices to state employees unions, starting the clock on a 30-day notice required by law before union layoffs can go into effect. The move is taken in case no budget agreement is reached before that date.
Plans by House Democrats to possibly vote on an income tax increase do not come about, in part due to recall threats by anti-tax groups. The possibility arose three days earlier when an unusual Sunday meeting was convened by House Speaker Dillon to gauge support for the measure, and to ask four Republicans (Wenke, Ball, Nofs, and Gaffney) who attended what their “price” for a “yes” vote would be in terms of government reforms. On Wednesday, two such bills are passed (capping school superintendent’s pay and capping a school pension “double dipping” scheme featured in a recent Detroit News expose), and both are tie-barred to an income tax hike, but there is not vote on the tax hike itself.
MIRS News reports that Democrats are “freaked out” by actions orchestrated by former Rep. Leon Drolet to back up a threat from the “Michigan Taxpayers Alliance” group he leads to recall legislators who vote for tax hikes. In preceding week Drolet’s group made thousands of “robocalls” to citizens in the districts of Republicans thought to be sympathetic to tax hikes, and distributed door-to-door recall-threat leaflets in pro-tax Republican Rep. Dick Ball’s district. On this day Drolet distributes similar professionally produced recall leaflets to Democratic legislators’ offices, and parks a giant fiberglass pig sporting “Recall Ball” messages in front of the Capitol.
The Citizens Research Council releases a report showing that the state has drained nearly $2.9 billion from various funds since 2000, and is expected to incur $66 million in interest expense this year on short-term borrowing to cover cash flow shortfalls. In contrast, in 2000 the state earned $137 million in interest on positive balances in various funds, including the long-since depleted “rainy day fund.”
House Appropriations Chair George Cushingberry, D-Detroit, the sponsor of a bill to increase the state income tax rate from 3.9 percent to 4.6 percent, introduces a bill to levy a $1.35 monthly tax on every phone line in the state, both cellular and landline. This would impose a new $200 million burden on phone users. The money would be distributed to a variety of programs and local governments under a formula specified in the bill; $43 million would go to the state general fund.
The House, Senate and Governor agree on a plan to paper over the $802 million FY 2006-2007 deficit with $410 million borrowed against future revenue from the 1998 tobacco company lawsuit settlement, plus another $80 to $90 million from a fund that borrows money to provide college loans, and $167 million raided from so-called “restricted” funds. This in addition to previous agreements to use accounting gimmicks to shortchange an annual contribution to cover employee pension liabilities. The agreement only includes modest spending cuts in arts grants, universities, the legislature, and some other items. It would push $112 million in disbursements into the FY 2007-2008 budget year, raising the gap between desired spending and expected revenue in that year’s budget to more than $1.8 billion.
In a television interview, Treasurer Robert Kleine reveals that under the SBT replacement plan favored by House Democrats, the Big Three automakers would not only pay no business tax, they would likely get refund checks from the state for property tax on tools and equipment they pay to schools and local governments.
The House passes legislation containing the provisions of the deal made on May 25. In the days since the agreement the press and public have begun to comprehend the unprecedented decision to use long-term borrowing to pay for current consumption, and the deal has been condemned by editorial boards on both sides of the ideological spectrum, which urge either straightforward tax increases or budget cuts.
Detroit Free Press, May 29, 2007 Little joy over budget deal
Lansing State Journal, May 28, 2007 Budget deal seen as one-time fix for state's cash woes
The annual Detroit Regional Chamber of Commerce Annual Leadership Conference on Mackinac Island begins with a subdued atmosphere, given the ongoing budget situation. The posh conference is made up of legislators, the governor, business leaders and other prominent public officials.
The Departments of Community Health, Corrections, Human Services, and the Strategic Fund agency, divulge that they are on track to overspending the amount appropriated for them in the current fiscal year ending Sept. 30 by $168.5 million, $42.4 million, $39.5 million and $8 million, respectively, for a grand total of $258 million. The disclosures comply with a new law was passed earlier in the year requiring them by June 1. This was adopted following allegations that news of similar overspending in the previous year was withheld for political reasons.
Gov. Granholm announces that, following a budget deal that would pay for current spending with up to $500 million in borrowing, the government employee layoffs warned of on May 22 will not take place.
The U.S. Bureau of Economic Analysis releases its final tabulation of real Gross Domestic Product of every state in the union in 2006. They all grew - except Michigan. In this broadest measure of the economic performance of a state or nation, Michigan’s economy actually contracted by 0.5 percent in inflation-adjusted terms.
Separately, in the 12 month period ending March 31, Michigan was dead-last in an index of changes in house prices maintained by the Office of Federal Housing Enterprise Oversight. Prices here fell by 0.66 percent. The U.S. average was a 0.45 increase. Michigan was one of only two states that experienced four straight quarters of decline (Massachusetts the other).
Senate Majority Leader Mike Bishop tells the Detroit Free Press that he thinks there should be concessions from the state’s 52,000 employees. Specifically, that they should give up the 4 percent raise scheduled for Oct. 1, which would save $109 million. In late March the Senate failed to vote on a resolution that if approved by two-thirds of both houses would have repealed the pay hike. The vote almost certainly would have failed, given the administration’s opposition to rescinding the raise.
Comerica Bank chief economist Dana Johnson releases a quarterly report detailing how Michigan is becoming a poor state. The state saw its gross domestic product stagnate between 2000 and 2006 (annual compound growth rate of 0.0 percent), while the nation as a whole saw an annual growth rate of 2.8 percent. From 2004 to 2006, real GDP in the state contracted at a 0.3 percent compound annual rate. In per capita GDP Michigan fell from 23rd place in 2003 to 35th in 2006. Johnson concludes, “A lot needs to go right for the state economy to bottom out.” He does not comment on the proposal to increase the state’s income tax. Johnson’s employer Comerica Bank recently decided to transfer its headquarters from Michigan – its home for almost 150 years – to Texas.
A poll by the Lansing EPIC/MRA firm shows that 3 percent of Michigan residents questioned said they would “definitely” leave the state in the next five years. Most cited the economy, with weather also a factor. Of men under the age of 40, 32 percent said they would or were “likely” to leave, and 5 percent said they would leave. Twelve percent of young men with college educations said they were likely to leave. The question requested by the Gongwer News Service asked 600 likely voters if over the next five years they thought they would definitely stay in Michigan, likely stay in the state, likely to move out or definitely move out. Pollster Ed Sarpolis said the findings suggest that the state should plan on losing 300,000 to 600,000 people in the next five years from it’s current 10 million.
MIRS reports that Gov. Granholm and Democratic leaders have agreed on a tax increase revenue target of $1.5 billion. Rumors that the House would stage a “test vote” on some tax increase bill do not come to pass.
The Mackinac Center releases a report by Economist Richard Vedder showing that despite their loud complaints about flat or lower state appropriations, between 2000 and 2004 total inflation-adjusted revenues per full time student increased at every state university except Ferris State and Wayne State. The University of Michigan saw real income rise nearly 20 percent.
Senate Republicans produce a list of $1.05 billion in cuts and reforms, and suggest that this could forestall tax hikes if combined with “selling” future lottery revenue for a $750 million up-front lump-sum payment from a private entity (basically a form of deficit financing, or paying for current spending by requiring lower spending or higher taxes in the future). Among the cuts and reforms are privatization measures, state employee wage concessions, school employee benefit reforms, welfare cuts, suspension of the state’s “prevailing wage” law, postponing an earned income tax credit for low income workers scheduled for 2008, and more.
Following a contentious exchange of public letters and press statements between Gov. Granholm and Senate Majority Leader Mike Bishop over tax increases, government reforms and who is responsible for failure to progress on a 2008 budget, the Senate passes modest but controversial legislation to reform notoriously lax school employee pension qualifications. All Democrats plus Republican Sen. Roger Kahn vote against the measure, which is strongly opposed by the MEA teachers union. The body is unable to summon sufficient GOP votes to move a another bill opposed by the MEA that would reform school employee health insurance systems, potentially causing a significant loss of business fir the union’s lucrative insurance arm, MESSA.
The legislature passes a new Michigan Business Tax to replace the Single Business Tax, repealed as of Jan. 1, 2008 under citizen-imitated legislation. The new tax will extract at least as much revenue from business as the SBT, and is arguably no less complicated, consisting of a corporate income tax, a corporate gross receipts tax, and an alternative tax for small business, plus many offsetting tax credits that benefit some types of business much more than others. Among these are substantial personal property tax reductions for industrial firms, and smaller ones for other firms. In general, the new system reduces taxes on industrial firms, small businesses that don’t exceed specified profit and officer compensation caps, and multistate firms based inside Michigan; and raises them on other types of business. The Big Three automakers will get large tax reductions, and reportedly were heavily involved in drafting the new tax. Notably, the Michigan Chamber of Commerce comes out against the tax.
After falling to 6.9 percent in May, Michigan’s unemployment rate rose to 7.2 percent in June. The national rate is 4.5 percent. Total state employment was 4.68 million, down 52,000 jobs from one year earlier, or 1.1 percent. Total employment nationwide rose 1.2 percent in the same