QUOTE OF THE DAY: “My greatest concern today is that there’s a fire somewhere.” — Sen. Michael BISHOP (R-Rochester), chair of the Senate Insurance Committee during a hearing on a bill that drew dozens of firefighters. Michigan Information & Research Service, Inc. Thursday, May 13, 2004 Web Site: http://www.mirsnews.com Volume XXII, Issue 092 Capitol Capsule “It’s their Governor,” Johnson said. “I really Cig. Tax Hike Next Week think they should come up with 46. But, I’d say a Today, House Speaker Rick JOHNSON (R- reasonable amount would be about the same ratio I LeRoy) told reporters that he expects to bring up had to come up with when Gov. John ENGLER HB 5632, the proposed 75 cents-per-pack cigarette wanted the increase a couple of years ago. I think tax hike, for a vote on the House floor. that was 42 out of 58.” Gov. Jennifer GRANHOLM based her recom- That would appear to translate to about 33 or mended 2004-05 balanced budget, in part, on the 34 Democratic votes. cigarette tax increase, which, it’s estimated, would bring in about $300 million. Polls show the tax Meanwhile, Rep. Mickey MORTIMER (R- hike would not be unpopular. Horton) released a list of $379.5 million in proposed (GF/GP) budget cuts his caucus task On Tuesday, (See MIRS May 11 edition) the force came up with. House Republican Caucus met behind closed doors for three hours discussing HB 5632. These The cuts are as follows: discussions probably weren’t held to coax mem- MDOT bers into voting for the measure, they were more likely held to estimate support and prepare the - $66.7 million through elimination of the Comprehensive caucus for the fact that the issue would soon be Transportation Fund share of auto-related sales tax. - $13 million by shifting of driver license fees going to coming to a head. Transportation Economic Development Fund It seems likely that as long as the Democrats Medicaid put up a reasonable number of votes for HB 5632, there will be just enough spare Republican “yes” - $56 million by eliminating some members of votes to reach the required 55-vote level required optional eligibility groups. for passage. FIA Reporters asked Johnson, who strongly sup- - $14. 8 million by reducing relative payment rate ports the tax hike, why he thinks we need the to day care aides increase in light of the $90 million-plus the state would get from doubling the Detroit casino tax (HB 4612), which passed the House Wednesday, MIRS Inside and the list of cuts Republican lawmakers have 2 JOBS Bills Going To Guv been working on. 3 Speaker On Casino Tax Hike: ‘It’s About Time’ 3 Gov to Nader: Join Kerry Team “We have an $800 million deficit to deal 4 Thomas Opts Out Of Conyers Challenge with,” Johnson said. “It’s going to take more than 5 Doubling Casino Tax Worthy Of Examination the cuts.” 5 Paying For Firefighting Training 6 House Moves Personal Property Exemption MIRS asked Johnson what the minimum HOUSE REPORT amount of Democratic votes would have to be on SENATE REPORT HB 5632. 910 Ottawa St • PO Box 19303 • Lansing, MI 48901-9303 • Phone (517) 482-2125 • FAX (517) 374-0949 • E-Mail [email protected] If You Don’t Read Us - You Just Don’t Get It! Page 2 MIRS Capitol Capsule Thursday, May 13, 2004 - $2.3 million by replacing some (GF) day care Otherwise, any other credits fledgling enter- funding with federal (TANF) funds prises will get out of start-up bills is coming out of the generosity of cities, townships or other taxing - $5.4 million by removing some excess Adoption units. The firms would still have to pay sales and Subsidy Program funds. use taxes. - $2.9 million from the Maxey property sale One bill, HB 5342, sponsored by Rep. Glenn - $20 million by reducing the number of FIA STEIL (R-Grand Rapids), likely won’t impact offices in Wayne County anybody at all, according to the Senate Fiscal Agency (SFA) and the Department of Treasury. Corrections The bill gives locals the option to give start-ups a - $14.8 million by eliminating prisoner education pass on an enterprise zone tax that will be phased program out by the time this tax exemption goes into effect. - $6 million by increased utilization of jail beds However, Senate Majority Leader Ken SIKKEMA (R-Wyoming) said that the bills will - $46.2 million by releasing “technical” parole encourage the growth of small firms that have the violators returned to prison for one year or more highest potential of creating future jobs and Addition Reduction options economic growth for Michigan because they do ease a business’ tax burden during their first five - $16.9 million through another “early-out” for years of business, which are typically a business’ state employees toughest years. - $20 million by adjusting MEAP accountability as “Eliminating the barriers state government put up it applies to those who graduate with a C to business investment and jobs growth is not a average. This assumes one-third of students Republican or Democrat issue; it’s a priority for every would not meet the new criteria. elected official in Michigan,” Sikkema said. “Govern- - $90 million through a 1 percent cut for major ment cannot create jobs, but it surely can get out of the budget areas and state departments way of businesses that want to create them.” - $12.5 million through cuts to Intermediate The other bills the Senate moved today were the School Districts (ISDs). final pieces to a package that allows two indepen- dent, third-party inspectors make sure Michigan-run forests meet the environmental sniff test. JOBS Bills Going To Guv SB 1023 would create four pilot projects (two What appears to be the final pieces of the nine- in the Upper Peninsula and two in the Lower piece JOBS I package was sent to Gov. Jennifer Peninsula) in which a private company would GRANHOLM today, after the Senate signed off on actually run state forests until 2011 in such a way minor House changes to the bills that give tax breaks that it will meet the muster of these new third- to struggling start-up companies and lets a private party inspectors. company manage four state forests for five years. The second bill, SB 1024, expands the state’s The Legislature gave its unanimous approval forest finance authority to include a logger, a to the 11 bills that give small, struggling start-ups private forest owner, someone in the wood prod- a pass on the Single Business Tax (SBT) and ucts industry, someone from the non-industrial allows locals to give these same companies a pass private wood industry, a hunter and a forest expert. on property taxes and several other assessments. Both bills received the same level of opposition According to the House Fiscal Agency (HFA), the they did the last time they were before the chamber. only hit to the General Fund is the estimated $2 million SB 863 and HB 5331 in lost Single Busi- ness Tax proceeds. Thursday, May 13, 2004 MIRS Capitol Capsule Page 3 Speaker On Casino Tax Hike: Martin said doubling the Detroit casino tax ‘It’s About Time’ would be a damaging step backwards. Today, House Speaker Rick JOHNSON (R- “This bill passed because the House is anti- LeRoy) described the version of HB 4612 the Native American, anti-city of Detroit, and doesn’t House passed Wednesday as “a good bill” and said care if jobs are lost as a result,” Martin said. “it’s about time” the Detroit casinos start paying “When you’re contemplating a multi-million their fair share. investment (as the casinos have been), the idea of doubling the tax is a huge problem.” HB 4612, which would double (from 18 to 36 percent) the amount of state tax Detroit’s three The initial purpose of HB 4612, which was casinos would be required to pay, was passed by part of the original racino (a.k.a. agriculture the House Wednesday on an 85-20 vote. enhancement) package, was to permit casinos to offer simulcast horse racing on their premises. Johnson said that the legislation would bring That portion of the measure has remained in the in nearly $100 million additional revenues to the bill, with some modifications. state. The official estimate was around $90 mil- lion, however such estimates tend to err on the Johnson was asked if it’s hypocritical for the lower side. casinos to be identified with an anti-gaming expansion movement. “Don’t you think it’s time that we got our fair share?” Johnson asked reporters rhetorically “I’ll say it is,” Johnson responded. “They’re “They’re (the casinos) not building hotels. They’re out there gathering signatures so they can create a not doing things they promised. I think it’s time monopoly for themselves.” they put up their share.” Martin said the petition drive is for a “common MIRS asked Johnson if he thinks the legisla- sense” approach to gaming that would empower tion stands a good chance of passing in the Senate. voters to decide the issue. He said he hadn’t discussed the issue with anyone “It just says the voters would decide like they in the Senate yet. However, almost simultaneously did with our (the Detroit) casinos,” Martin said. as Johnson was speaking, Senate Majority Leader “We had to get local approval in1994 and then Ken SIKKEMA (R-Wyoming) was releasing a statewide approval in 1996.