By By JOHN EBY / Dowagiac Daily News
CASSOPOLIS – Comparing Michigan's tense budget skirmish to football, state Sen. Ron Jelinek's spokesman told the Cass County Board of Commissioners Thursday though no "magic play" exists, "it's still the first quarter and there's a lot of game left to be played."
Chris Siebenmark's boss, a Three Oaks Republican, chairs the Senate Appropriations Committee, which on Wednesday shot down Gov. Jennifer Granholm's proposal to immediately lop $167 million because members felt she's not cutting enough.
Their disapproval of Granholm's executive order sent both sides scrambling for a compromise to resolve an $800 million shortfall this year and an even greater gap next fiscal year.
Granholm wanted lawmakers to approve her plan by April 1, including a 2-percent tax on services.
Failing that, the governor has warned of deep cuts, including mid-year reductions of money promised to schools.
Granholm proposed $710 million in new revenue for state services and school districts to ease this year's deficit.
About half of her executive order cuts would have come from recalculating state pension fund costs, the Detroit Free Press reported Thursday, quoting Senate Majority Leader Mike Bishop, R-Rochester, as saying Granholm relied too heavily on tax hikes when "taxes are not our solution."
While Jelinek's committee nixed Granholm's executive order along party lines, it passed the Democratic-controlled House Appropriations Committee.
State Budget Director Bob Emerson said the GOP has failed to offer alternatives, but Jelinek said Republicans will suggest cuts.
"The budget process is just beginning," Siebenmark said. "The governor's executive order to balance the $800 million deficit in the current budget was killed yesterday by the Senate Appropriations Committee. House Appropriations passed it, then immediately, of course, the partisan banter begins. It's all part of the process. Hopefully, those who are in this process will try to get beyond the partisanship."
"Ron's biggest concern with the budget," Siebenmark added, "is that raising taxes" generates revenue of $1.4 billion to $1.5 billion "beyond what she budgeted for. She's putting some money in the Medicaid trust fund. Where's the rest going? Budget stabilization? That question never got answered at the budget presentation. His other concern" is that returning to business as usual risks bypassing "a critical discussion that needs to happen. We need systemic change to how we do government to get out of this thing."
In response to commissioners asking him about Single Business Tax (SBT) revenue replacement, Siebenmark said, "I don't know. There are a variety of proposals out there, none of which seem to have grown legs. Dec. 31 is the drop-dead date. Obviously, that has to be done before Oct. 1," when the new fiscal year starts. "It will have to be well before that."
Siebenmark said, "Schools have been coming to me saying, 'We're not getting cut. We're safe, right?' Wrong. (Granholm's recommendation) is not in place. I can appreciate their urgency in wanting to see things get better and jump at any chance to see something positive, but, no, it's not fixed.
"The governor's proposal is certainly not the reality of where we're at right now. It was denied yesterday. The Legislature is working on its response which, when she gets it, there will be aspects she won't like. (Commissioners can appreciate the political) give and take. You've been down this road before. Then we go to the table and the pendulum swings this way, then that way, then it lands in the middle and everyone goes to work. That's where we're at now. Now the serious discussions begin. We have to keep hearing from folks," including "what you do like."
Siebenmark had apparently heard plenty about proposed cuts to Marcellus' Volinia Outcomes School. "Ron is well aware of the value of what they do with those kids. We got flooded with responses to the funding cut it was going to receive. We were waiting back for an answer from the state Department of Education. Basically, by federal regulations, they were out of compliance, but continued receiving those dollars.
"Ron met with the interim superintendent and other folks. There are other options to look into to get dollars from another source and continue that program. By no means was Ron not working on it, walking away from it or not aware of its importance. We're working on it."
Commissioner Minnie Warren, D-Pokagon Township, inquired, "Are you doing anything on the amount of people without health insurance?"
Siebenmark responded, "The governor had a plan to try and get more people on a plan that she wanted to put together. Quite honestly, she's trying to get more money into Medicaid, as far as that goes. Medical insurance, I don't know that there's a whole lot going on there right now. I think most people's attention is on the budget deficit."
"It's got to come up now because we've got a lot of people in medical bankruptcy," Warren said.
Referring to a seminar he and Vice Chairman Ron Francis, R-Cassopolis, attended in Sturgis about a month ago, Commissioner David Taylor-D-Edwardsburg, said, "I was surprised to learn that 80 percent of Michigan's SBT is paid by about 1 percent of the companies – the three large auto companies, Dow, Whirlpool, Pfizer. That group had not pushed at all for repeal of Michigan's Single Business Tax. The people clamoring for reduction were individuals who didn't necessarily pay it. Anyone earning less than $250,000 a year in gross revenues doesn't pay it at all. Maybe they should just re-enact it."
"It won't happen," Siebenmark said, adding, "Michigan is no longer a manufacturing state, so our method of gaining revenue is archaic. It's a cultural shift. For over a century, Michigan did one thing. We built cars. We're kind of a victim of our own choices … It's like coming off an addiction."