June 9, 1995

Legislative Week in Review

• Partisan debate on department budgets may keep lawmakers in Lansing past their hoped-for recess date of June 16. An Independence Day adjournment now is seen by many as more realistic. Meanwhile, argument about extra funding for universities has slowed passage of the higher education budget, while spirited exchanges between the state’s east and west shorelines over arts funding have stalled the regulatory budget.
• The budget-setting process yielded some victories this week, with final passage of spending plans for the departments of Natural Resources (SB 299), State Police (SB 302), and Military Affairs (SB 303). Senate concurrence in House versions of these budgets sends them to the governor for signature.
• The Department of Social Services budget passed by the House Wednesday was unsubtle on one point: if DSS director Gerald Miller fails to stop, by next January, state disability payments to drug and alcohol abusers, his pay will be cut 25 percent. This amendment to SB 300 returns the $2.4 billion spending plan to the Senate.
• Legislative interest peaked just one vote short of passage for a bill sharply raising consumer lending rates. After a volley of amendments, six GOP defectors joined unified Democratic opposition to sink HB 4614, centerpiece of a 10-bill credit reform package that would boost interest rate caps from their current range of 15.5–22 percent to 25 percent. Observers predict the package will be back on the House floor after additional support is lined up.
• The City of Detroit was the big loser on Thursday, in one of the most contentious Senate sessions in memory. Invective spewed as the upper chamber approved a new revenue sharing formula—based primarily on population—which will substantially penalize Detroit, while steering additional monies outstate. In apparent retaliation for the nonsupport by five Detroit senators of Governor Engler’s original revenue sharing proposal, Republican leaders engineered bare-minimum, party-line votes of 20–15 for SBs 497–9, which will reduce Detroit’s share by more than $75 million from Engler’s budget targets and $54 million from what it currently receives.
• Further changes in tax policy emerged on Thursday from the Senate in the form of single business tax (SBT) and capital acquisition deduction (CAD) revisions. With critics believing that the move will create a $200 million hole in the budget and perhaps endanger state financing of schools, the Senate passed tie-barred SBs 342 and 545. SB 342 would shift current SBT calculations from a combination of sales, payroll, and property to a system based entirely on sales. SB 545 would allow companies a 100 percent CAD for property they own in Michigan.

Political News

• A consulting firm hired by the Department of Social Services gave the department’s Families First program high ratings in a report released this week. Praising the program as a national model, the report notes that the Engler administration brainchild has saved the state millions, a point ceded by critics who claim saving dollars, not kids, is at the core of the project.
• Call him "Mr. Thrifty" suggests the Detroit News, reporting that the National Taxpayers Union has named U.S. Rep. Nick Smith (R-Addison) the most fiscally conservative member of Congress. In 37 Congressional votes this session, Smith supported $12.8 million in federal spending cuts, besting his 434 Congressional colleagues. Close behind, in third place nationally, is fellow Michigan delegation member Peter Hoekstra (R-Holland).
• The latest politician to grab his hat out of the U.S. Senatorial ring is five-term U.S. Rep Fred Upton (R-St. Joseph). The senior GOP member of Michigan’s congressional delegation estimates that to run a competitive race against incumbent Carl Levin, he would have to raise an average of $12,000 a day during the next 500 days.