News stories, editorials and other commentaries about state taxes and the programs and services they fund in Michigan.

Lawmakers and Gov. Jennifer Granholm have reached agreement on a new budget that will result in about a $72 per-pupil average increase in the basic state K-12 grant to public school districts throughout Michigan.

The amount is not final under Wednesday's deal, but rather is a goal that will have to be finalized in
House-Senate conference committees that today will start putting the closing touches on
departmental budgets that make up the $44-billion state spending plan.

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Feeding 51,000 state prisoners every day is expensive. But it shouldn't be more expensive than necessary, so the Corrections Department should examine the findings of an audit that suggests savings from $10 million to $38 million could be possible.

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Local governments, public schools, colleges and universities will see increases under the tentative Fiscal
Year (FY) 2009 budget agreement reached today by administration and legislative officials, but not the
type of increases Gov. Jennifer GRANHOLM had packed into her proposal earlier this year.

State revenue sharing payments, originally slated to be bumped 4 percent under Granholm's plan, but
cut out of the Senate's spending plan completely, will be increased 2 percent, House Appropriations
Committee Chair George CUSHINGBERRY (D‐Detroit) told reporters today.

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When most people think of taxes, they see images of Capitol domes and remote bureaucracies.

When they think of public services, they have images of what local governments are expected to do every day: police the streets, put out fires, pave roads, maintain parks.
Revenue sharing is supposed to marry the state's taxation authority to local governments' service responsibilities.

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Michigan State University's Board of Trustees today approved a 6.8 percent tuition and fee increase for the coming year for in-state students, upping the price for an entering freshman taking 15 credits per semester to $10,214 annually.

"We've tried to take the long view," said MSU President Lou Anna Simon. "We've tried to worry
about the value of a Michigan State education, the value of Michigan State to our students, to the state and to our alumni scattered around the world."

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A Senate subcommittee has laid out a laundry list of problems with the Michigan Business Tax (MBT)
and surcharge, which would cost the state up to $1.7 billion in annual revenue to fix.

In a perfect world with a perfect budget, the MBT Impact Assessment Subcommittee would dump the
MBT surcharge. But since "fiscal constraints make that difficult," the panel recommends phasing out the
despised surcharge, which replaced the even‐more‐reviled service tax.

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The House passed today a Higher Education budget that mandates Wayne State University (WSU) study
whether having its medical school board members also serve on the clinical board is a conflict of
interest, but doesn't hinge future state funding on the result.

Today, on a 61‐45 mostly party‐line vote, the House passed SB 1099, a $ 1.8 million ($1.676 General Fund) Higher Education Budget for Fiscal Year (FY) '09. The budget represents a 2.7 percent increase over last year, which was less than the 3 percent increase recommended by Gov. Jennifer GRANHOLM.

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The Legislature's supposed to be in the stretch run on a 2009 budget to finance vital state services and advance critical policy improvements.

Work done on key accounts is less than encouraging. The 2009 budget is shaping up as another year in which the state spends far too much on prisons and not enough on higher education; a year in which struggling local governments are again left high and dry.

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Stardock Corp. is the kind of company Michigan could use more of.

It's a 21st century technology and entertainment company. It makes
computer games and software. It employs 55 people. Revenue this
year may reach $18 million.

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The Wall Street Journal in our featured guest editorial last week called the budget deal that saved our state from bankruptcy last fall "the Granholm tax dud" and asked if recession-weary residents have had enough. A better question might be, why would anyone take advice from an entity that has been one of the biggest boosters of President George W. Bush and virtually all of his policies, sanctions the outsourcing of American jobs, and opposes higher mileage standards for the automotive industry, which buys the Big Three time to build those monster SUVs no one wants anymore?

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The state's ongoing structural budget issues have an Eastern Michigan lawmaker suggesting it's about
time the state started taking a long, hard look at local revenue sharing.

"I find it interesting that after all the taxes we've raised, we still have a deficit," Sen. Jud GILBERT told
MIRS today. "To me that points to the fact that what we did actually did hurt the economy."

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Even for those who believe the media overplays negative news, it's been a rough week for Michigan.

Ford Motor Co. announced plans for involuntary layoffs of salaried workers. The automaker didn't disclose numbers, but some employees were told the cuts could hit more than 2,000 of Ford's roughly 23,000 salaried staff.

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Democrats failed to restore a $16 million revenue sharing increase today in the General Government
budget, which passed on a party‐line 21‐17 vote.

That was the biggest battle in the $1.6 billion budget (HB 5616), which includes funding for the Attorney
General, Civil Rights, Executive, Information Technology, Legislature, Auditor General, Management and
Budget, State and Treasury.

Appropriations Subcommittee Chair John PAPPAGEORGE (R‐Troy) said the budget should be viewed in
the context of the May Consensus Revenue Estimating Conference, which revealed a $393 million hole
in the Governor's proposed budget.

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Several mayors expressed their frustration today at the Senate's refusal to support the Governor's
proposed four percent revenue sharing increase, citing that this revenue is essential in funding core
social services like the police and fire department.

Kentwood Mayor Richard ROOT said that his city has not increased the size of its fire department for the
past few years, even though the city's population has increased.

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Lawmakers would have until July 1 to put together the coming fiscal year's budget under a proposed
Constitutional Amendment kicked around the House Appropriations Committee today, a move designed
to let school districts and municipalities know how much they can expect before they are months into their own fiscal years.

Schools and cities grumbled last year when Fiscal Year (FY) 2008 budget discussions carried on past
midnight Oct. 1, 2007, the official start of the FY '08 fiscal year. The protracted negotiations left entities
that operate on a July 1‐June 30 budget cycle in limbo.

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What does Michigan have to do to turn itself around? Bipartisanship, clear taxing and improved K‐16
education, to name a few, according to a new report released today.

The Center for Michigan, an Ann Arbor "think‐and‐do" tank, released its "Michigan's Defining Moment: A Common Ground Agenda for Michigan's Transformation," report today at a Lansing celebration
featuring political consultant Matthew DOWD, a Democrat who advised 2006 GOP gubernatorial
nominee Dick DeVOS.

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Here's a proposal not likely to win a popularity contest: With gasoline touching the $4-per-gallon mark, why not tack on another 30 to 50 cents or so to finally answer our responsibility to the national and state infrastructures?

We know -- it's crazy to think either state or federal lawmakers will vote to raise fuel taxes when motorists already threaten revolt over the 40 percent increase in pump prices during the past year.

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Lower tax revenues will force some trimming in the state budget being worked on for the next fiscal year, a trio of state economists said Friday.

The state likely is facing a shortfall of $170 million to $350 million in the budget year that starts Oct. 1. That could mean K-12 schools, universities and some state programs may not get as much as Gov. Jennifer Granholm has proposed.

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The fiscal analysts' projection this afternoon that the state faces a $393 million hole in next year's proposed budget didn't cause the panic of last year's $1.8 billion deficit, but will force lawmakers and the Governor to do more than roll out the wallpaper.

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A trio of state economists said Friday that lower tax revenues will force smaller increases in the budget being worked on for the next fiscal year.

State Treasurer Robert Kleine and the directors of the Senate and House Fiscal agencies said
during the May revenue estimating conference that there will be about $61 million less for the current budget than what they forecast when they held a similar conference in January.

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Fiscal experts say Michigan could have $434 million less than expected to spend on K-12 schools and other government services in the next budget year.

The financial trouble is here despite last year’s increases in the state’s personal income and business taxes to balance a budget deficit. Reasons include the national economic slowdown’s effect on Michigan’s economy and fewer people purchasing cigarettes and buying and selling homes.

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Despite predictions that Michigan's economy would begin to recover in 2009, fiscal experts now believe state revenues will be more than $400 million short of their forecast.

The state Treasury will take in $19 million less than initially forecast this year and $434 million less in
the fiscal year that starts Oct. 1 -- even after last year's increases in income and business taxes,
according to a report Tuesday by the House Fiscal Agency. That means lawmakers will have less to
spend as they debate next year's budget, but overall spending still will be about $50 million more than this year.

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Fiscal experts say Michigan could have $434 million less than expected to spend on K-12 schools and other government services in the next budget year.

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Preliminary numbers from the House Fiscal Agency (HFA) show the state looking in $434 million in new
revenue pitfalls for Fiscal Year (FY) 2009 since the last Consensus Revenue Estimating Conference (CREC) in January.

If the numbers up, it would more than erase the $125.5 million cushion Gov. Jennifer GRANHOLM had
built into her FY 2009 General Fund budget proposal and the $48.5 million surplus in the School Aid
Fund (SAF).

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Democratic and Republican lawmakers remain at odds over spending hundreds of millions of
dollars on university buildings, airport runways, trails, fishing piers and other state projects.

And time is running out to strike a deal.

The Michigan Department of Transportation says Thursday is the deadline to approve spending
to upgrade security and terminals, extend runways and make other improvements at more than
100 local and state airports. The construction season has started, and delaying major projects into the next budget year would result in higher costs due to inflation and potentially affect workers. That's because 60 percent of federal matching dollars for airports goes toward salaries
and wages, according to MDOT.

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The new state business tax that went into effect this year was intended to shift some of the tax burden from manufacturers onto service-oriented companies, such as real estate
agents and insurers.

But officials with those companies say the increases they may be forced to pay this year are unreasonable.

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The outcry from Michigan companies stunned and angry about their new tax bills has touched off a scramble in the state capital, where politicians are mindful about scaring away
business in an already floundering economy.

Responding to calls and e-mails from business owners complaining bitterly about their escalated
liability under the new Michigan Business Tax, which went on the books at the start of the year,
senators last week rushed to pass a $240 million tax relief bill.

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In the 6 1/2 years since the 9/11 attacks, Michigan communities have lost 1,800 police officers and 2,400 firefighters for lack of money to pay them. Wouldn't you think we'd be adding security?

The availability of "first responders" is a core quality-of-life issue, along with such things as schools, parks, libraries, snow removal and smooth streets, all of which have been affected by the state's financial woes.

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The Senate passed another change to the Michigan Business Tax (MBT) today without a Democratic
amendment tie‐barring the bill to a measure extending unemployment benefits.

The amendment that would have tie‐barred the bill to SB 0086 was defeated 19‐19, with freshman Sens. Roger KAHN (R‐Saginaw) and Randy RICHARDVILLE (R‐Monroe) voting with the Democrats.

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On Monday, the day before Tax Day, when many taxpayers across the land are irritated about having to
send the government their money, a group of Republican state representatives set out to fan that
resentment.

State representatives Jack Hoogendyk, R-Texas Township, and Rick Shaffer, R-Three Rivers, were in town to call for a repeal of the state income tax increase that the Legislature and governor approved late last year.

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Corrections officials say more than 12,500 of Michigan's 50,000-plus prison inmates -- 1 in 4 -- have
a history of mental illness.

Advocates call that shameful. Policymakers trying to get the $2 billion state corrections budget under
control call it expensive.

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Michigan's prison crunch will continue until at least 2010, because state policymakers have abandoned plans to revise sentencing policies and free old, sick and nonviolent convicts.

And in the meantime, the meter keeps ticking: It costs $5 million a day, or almost $2 billion a year,
to run the state prison system whose population stands at 50,200 and is projected to top 56,000 within five years.

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As the state spends more and more to operate Michigan's sprawling prison network, it has steadily
reduced investment in its colleges and universities. The result: Michigan is one of four states that spend more on corrections than on higher education.

Since 2001, lawmakers and the governor cut about $250 million in funding to the 15 public universities, prompting hefty tuition increases for students and their parents, and raising fears that higher education is being priced beyond the reach of those of modest means. The corrections budget is more than $400 million higher than in 2001.

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Michigan runs one of the nation's largest and most costly prison systems, a $2 billion-a-year
expense that is crowding out other spending priorities at a rate many officials fear the state can no
longer afford.

Yet despite near-unanimous agreement that Michigan can't pay ever-rising corrections bills during a
period of economic decline, politicians and law enforcement professionals remain hesitant to spend less by changing sentencing guidelines or paroling more prisoners.

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A day before residents face the deadline file their income tax returns, House Republicans held a press
conference announcing that they will introduce legislation to repeal last year's income tax rate increase.

Increasing the rate from 3.9 to 4.35 percent has cost the average Michigan family an additional $300 a year, money that could be spent on paying for a mortgage or fueling up a family car, GOP lawmakers argued
Monday. But instead, they said taxpayer dollars were going to fund things like revenue sharing dollars to
Detroit where the city settled a whistleblower lawsuit at a cost of nearly $9 million and a presidential primary that ended up being meaningless (as of this point, the state's delegates won't be seated at the Democratic convention and Republicans lost half of their delegates).

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Three House Republicans today sounded the call to repeal the income tax hike passed last year, but they spent the bulk of the press conference railing against government waste.

"Even if there's no repeal of the income tax," said Rep. Rick JONES (R‐Grand Ledge), "We need to change the wasteful way we spend money … If we don't change the way we waste money in Michigan, the only thing Michiganders will have left in their pocket is change."

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I am responding to "Higher gas tax plan fuels debate," (LSJ, March 3). In this story, the more specific issue of Michigan's gas tax was discussed: Should the Legislature raise Michigan's gas tax to help fund our road system?

I am quoted as supporting eliminating the gas tax and replacing it with a sales tax increase.

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Institutions of higher education that were left out of Governor Jennifer Granholm's capital outlay budget proposal argued their case for inclusion before the Joint Capital Outlay Subcommittee on Wednesday.

Under the governor's proposal, the state would contribute $315 million for $771 million worth of capital outlay projects at 10 of the state's 15 public universities in the current fiscal year and $105 million for $210 million worth of projects at 15 of the state's 28 community colleges.

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send him a Department of Corrections budget that did not include savings for policy changes that had not yet been implemented, carried through on his promise to fill a $23 million general fund hole with cuts to the central administration in a budget approved by his subcommittee Wednesday.

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A university budget that ditches Governor Jennifer Granholm's proposal to apply new criteria for allocating increased appropriations - with separate standards for the three major research institutions - was approved Wednesday by a Senate budget subcommittee.

Sen. Tony Stamas (R-Midland), chair of the Senate Appropriations Higher Education Subcommittee, said it is important to rebuild the base appropriations for all of the universities rather than embark on a new formula.

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The state announced Tuesday it plans to close a female prison located in suburban Detroit.

The Robert Scott Correctional Facility in Wayne County's Plymouth Township will close in May 2009. It has been open since 1991.

Michigan Department of Corrections officials said closing the prison will save $12 million in the next budget
year starting Oct. 1 and $36 million a year after that. The state corrections system costs $2 billion a year.

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The state's leading road building group this morning warned members of the House Appropriations Transportation Subcommittee that Michigan's leaders need to act now in order to avoid incurring ever-mounting road funding bills down the line.

"Our system is in dire straits," said Mike NYSTROM, vice president of government and public relations for the Michigan Infrastructure & Transportation Association (MITA). "We don't need to be experts to see how bad our system is."

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Pictorial display of the decline in law enforcement officers since 2001.

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Sen. Wayne KUIPERS (R-Holland) wants state university funding to be linked to enrollment as part of a new higher education funding proposal he rolled out today.

His plan puts all university money into one pool. Money from the pool would be distributed on a per-student basis, with the amount increasing each grade level. Funds for restricted federal programs, private university tuition grants and the Children of Veterans Tuition Grant Program would be exempted from the pool.

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Across the nation, the road to prosperity is being rebuilt. Increasingly, strong economies are emerging in cities where talented people -- creative, highly educated and entrepreneurial people -- are choosing to live and work.

A report issued Feb 12 by Michigan Future, Inc., an Ann Arbor think tank, demonstrates personal income is
higher in cities with high concentrations of people with college degrees. Where talented people are living, industries with high-wage jobs and regional economies are thriving, concludes the report, "Michigan's Transition to a Knowledge-Based Economy."

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Gov. Jennifer Granholm said Thursday she will propose more state money for public universities in her 2008-09 budget plan next week, and will insist that they hold tuition hikes within the inflation rate, even
if it means dipping into their private endowments.

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It's time to bust some myths about the state budget.

Myth: Personal income is falling in Michigan, so the state budget should fall, too.

Fact: Since 2001, Michigan personal income has increased by 19.3%. In that same time, the state's
spending from state taxes and fees has increased by just 10% -- even after last year's tax increases.

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David Boyd was visiting his 83-year-old mother at Martha T. Berry Medical Care Facility on Friday morning when the news hit.

The 217-bed facility may have to cut $700,000 from its budget, forcing 10 employee layoffs. Boyd worried about the impact on his mother, Sara Jane Boyd, who suffers
from dementia but has enjoyed a "good, decent quality of life" at the county-run facility for the past four years.

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Government doesn't run like a business because politicians run government, not business
executives. The business leaders of Metro Detroit don't want to run state government, but they would like to bring some common-sense business principles to the operations of the state.

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For most citizens, the prospect of studying up on the state's finances is daunting. Since the majority
of taxpayers are not accountants or math majors, being able to analyze data about the state's fiscal
status seems beyond reach.

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Universities and local governments are among those hoping to get more money in the next state budget.

Gov. Jennifer Granholm's 2008-09 fiscal year budget proposal will be presented in early February.

State lawmakers recently raised the income tax rate and tacked on a surcharge to a new business tax. Those changes are helping the state's finances, but money is still tight.

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Associations representing local governments, non-profit organizations, and the state’s public universities say policymakers in Michigan believe too many “myths“ about the state’s budget.

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The idea that state taxes and spending are out of control is a myth and an impediment to getting
Michigan's economy back on track, a group representing universities, cities and nonprofit agencies
said Thursday.

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Michigan’s personal income has increased nearly twice as fast as spending from state taxes and fees since 2000, a new analysis of Michigan’s budget shows, even after including the 2007 tax increases. And the state’s bite out of the average family’s paycheck today is about 15 percent less than in 2000.

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Particularly for Republicans and business groups in recent years, a rallying cry has been that state government is too large and growing too fast. But a group including local governments and universities argued in a report released Thursday that state government is growing more slowly now than it was under the prior administration, leaving it well within residents' means to cover its costs.

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Michigan's personal income has increased nearly twice as fast as spending from state taxes and fees since 2000, a new analysis of Michigan's budget shows, even after including the 2007 tax increases. And the state's bite out of the average family's paycheck today is about 15 percent less than in 2000.

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Michigan experienced a seven-year high in murders in 2006 and a general upswing in the number of all crimes since 2004, Michigan State Police (MSP) officials announced today.

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Michigan residents were greeted with the good news last week that the state closed its financial books for the budget year that ended in September with surpluses totaling more than $350 million. But before the celebrating starts, it's worth noting that most of that money will
have disappeared by the end of the current budget year.

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The budget circus that came to Lansing a few months ago looks like it might not return in 2008. Officials have determined that state government finished its last
fiscal year Sept. 30 with $353 million more than expected.

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The state Department of Transportation's multi-billion dollar budget isn't enough to maintain the
state's roads at their current condition, and Sen. Jud Gilbert, R-Algonac, wants solutions.

Recently, Gov. Jennifer Granholm signed a bill Gilbert sponsored last year that will create a task force and citizen advisory committee charged with proposing alternative revenue sources to pay for the state's transportation needs.

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The financially beleaguered state actually ended the 2007 budget year with a surplus of more than $350 million, thanks to higher than expected tax receipts late in the year, lower than anticipated welfare rolls and spending restraints, the state budget office reported Wednesday.
The General Fund, the state's main operating budget, ended the fiscal year Sept. 30 with an extra $259.1 million and the separate School Aid Fund closed out with an excess of $94 million, according to the annual financial report.

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After last year's state budget battle, Livingston County's lawmakers want to make it a priority to get the
budget done quicker in 2008.

"Hopefully, we'll get the budget done early," said Rep. Joe Hune, R-Hamburg Township.

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Some widely despised Michigan business taxes were killed off in 2007.

But it remains to be seen whether the new Michigan Business Tax, which takes effect today, will be
any more welcomed than its predecessors.

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At the close of a tumultuous 2007, the outlook for Michigan government doesn't look much rosier for 2008.

The economy continues to drag, the state budget appears headed for another whopping deficit that will require more cuts -- but no gas tax increase, Gov. Jennifer Granholm said Tuesday. And the same partisan battles that contributed to this year's debacle likely will still
haunt the state in the New Year.

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No higher tax on gasoline, either.

Gov. Jennifer Granholm today expanded her no-new-tax promise to include the state gas tax.

"People are hurting. That’s a tax everyone feels in Michigan,” Granholm told reporters during a 45-
minute recap of 2007.

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Nearly as soon as they voted in October to create a 6 percent sales tax on certain services, many state
lawmakers realized they had made a mistake. The tax, part of a last-minute deal to balance the state's new budget, drew howls of protests and warnings that it would drive business out of the state.

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It was ugly.

Facing widespread pressure to repeal a tax on more services before it took effect first thing Saturday, the Legislature got the job done - barely.

But not before the tax became law, although lawmakers said businesses could ignore it.

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People who paid a 6 percent tax on services before the tax was repealed would get a refund under legislation headed to Gov. Jennifer Granholm.

The Michigan Senate approved the bill Tuesday, three days after the tax briefly took effect. It was in effect for
less than 24 hours.

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Now that the service tax is dead and buried and a new $600 million surcharge on business goes on the books next month, who are the big winners and losers under
Michigan's new business tax scheme?

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Michigan businesses and consumers were spared an onerous sales tax on certain services
by a last-minute compromise by legislative leaders. Last-minute deals have become the norm
in Lansing, and have proven themselves less than the ideal way to make policy.

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State lawmakers are nothing if not consistent. They have an unfailing ability to march up to a deadline and keep walking.

Though there's still time today to repeal the services tax, House Democrats -- with the express endorsement of Gov. Jennifer Granholm -- on Thursday submitted an unreasonable plan to the Senate and said "take it or leave it."

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Dozens of abused and neglected children taken into protective custody in Wayne County have slept overnight in a state office building because of a shortage of foster homes, the Free Press has learned.

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The state Capitol was a beehive of inaction Thursday as top lawmakers, business interests and Gov. Jennifer Granholm worked to find a replacement for Michigan's widely despised new service tax before it is to take effect at midnight tonight.

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So will it stick or won't it?

The new 6% service tax is like one of those bad snowstorms that everybody hoped would skip town. Even the forecasters warned that this thing couldn't last long. This oddly crafted tax on services --6% on nails but not hair; 6% on ski lift tickets but not golf -- is so dopey that most expected it ultimately had to be repealed.

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This evening Gov. Jennifer GRANHOLM signed HB 5408, legislation that repeals the service tax and replaces it with a surcharge on the Michigan Business Tax (MBT).

The service tax, which went into effect at 12:01 a.m. Saturday morning, had a short life span of about 19 hours. Granholm also signed SB 0845, legislation that holds businesses harmless for the brief period that the tax was in effect.

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For a month, Robin BARKER lived in pain because of a tooth that needed to be pulled. As a Medicaid recipient, Barker had no other choice.

"I called and it took a month just to get in. If I wanted surgery it would have taken until Jan. 9," the 42-year-old Ann Arbor woman said. "When you're in pain, you're in pain."

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A new use tax on services that Michigan business uniformly dreads is moving closer to taking effect Saturday after lawmakers failed to reach agreement on a replacement.

In a move denounced by Senate Republicans, House Democrats on Wednesday night jammed through a service tax repeal and promptly adjourned until Tuesday.

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Cross-country skiers can visit all of the same state trails they did last year, but 16 of them will not be groomed or have plowed parking areas, the Department of Natural Resources announced Thursday, cutting the 242 miles of trail available last year to 106 miles. The department is also not entering any volunteer grooming agreements for new trails this winter.

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Negotiations broke down between the House and Senate over the widely despised service tax late Wednesday, boosting chances the unpopular levy will go into effect on Saturday.

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House Democrats passed its version of a service tax repeal and replacement bill (HB 5408) and headed out of town this evening, basically telling the GOP-controlled Senate that if it wants the tax repealed it will be on the House's terms.

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Industry and government transportation leaders are warning that a dramatic drop in Michigan
road funding next year will result in steadily deteriorating highways and the loss of thousands of construction jobs in Michigan.

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What will happen if the state's environmental cleanup funds run out?

Will contaminated brownfield properties -- like the abandoned Performance Paper site near the Edison neighborhood -- not be cleaned up?

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Less than one month ago, the state Legislature came together to pass a budget plan, made up of cuts, reforms and revenues, that made a promise to the people of Michigan. We promised that our schools would get the funding they need to prepare our children for the good-paying jobs of the 21st century; health care for our seniors and services for our veterans would remain strong; and police and firefighters would stay on the job protecting our communities.

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As soon as the Legislature puts the finishing touches this week on the
replacement for the 6 percent service tax, all the pieces will be in place and the state budget
should be squared away for years to come, right?

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The Senate today will interrupt its two-week November recess to work on a compromise to repeal a new tax on services and replace it with a bigger business tax.

But a final deal with the House must wait until at least next week, when the House returns from a traditional hunting-season break.

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The Senate is expected today to pass its own version of a business tax surcharge to replace the universally despised service tax -- but it won't win final approval today because the House isn't scheduled in until next week.

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The Lansing area would lose $4 million for education, mostly in grants, if President Bush's priorities ultimately triumph in a budget battle over a domestic spending bill.

But U.S. Rep. Mike Rogers, R-Brighton, said his congressional district could receive more money next year if Democrats and Republicans compromise on funding levels for the departments of Education, Labor and Health and Human Services.

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The only reform measure to come out of Michigan's miserably protracted budget fight is in danger of being gutted by House Democrats who are making one last stand on behalf of the state's biggest teacher union.

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After studying implementation costs of the new state sales tax on services, the Detroit Regional Chamber reports that the start-up tab for businesses to comply with the law will be $906 million. The tax itself is only intended to raise roughly $600 million.

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The head of the House Fiscal Agency (HFA) said he believes that the free-market advocates at the Mackinac Center for Public Policy were a disservice to the public during the budget process this year.

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A plan to kill Michigan's universally hated service tax and replace it with a surcharge on the state's new business levy won House approval late Thursday night.

The Democrat-controlled House voted 58-48 in favor of the bill, mostly along party lines, that tacks a 33 percent tax onto the gross sales of medium and large businesses across the state but scraps a previously passed measure to expand the 6 percent state sales tax to a mixed bag of services.

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Today, House Minority Leader Craig DeROCHE (R-Novi) told MIRS his caucus is discussing possible legal action over the manner by which House Democrats gave HB 5408 (the services tax repeal and replacement bill) immediate effect (I.E.) Thursday night.

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Michigan lawmakers' recent approval of a 6 percent tax on services was part of a last-minute solution to the state's desperate budget problems. And as with most acts of desperation, it was not well
thought out and quickly regretted.

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A bad economy and tax fatigue are likely behind the defeat of a number of local tax issues in Metro Detroit. When voters turn down money for a local fire department and school improvements, something is up.

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It's almost certain the Legislature will soon kill the new sales tax on services before it takes effect next month.

This isn't certain: How much of it will be replaced?

The state Senate voted Wednesday for repeal. The House tax committee plans to do likewise today, and
recommend replacing the lost revenue with a surcharge on the new Michigan Business Tax (MBT),
which takes effect Jan. 1.

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This evening, on a virtual party-line 58-48 vote, the House passed HB 5408, legislation that would repeal the services tax adopted a few weeks ago and replace it with a surcharge on the Michigan Business Tax (MBT).

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Lawmakers and business groups are nearing agreement on the repeal of a much-maligned use tax on services.

The deal would replace the revenue loss with a surcharge on the new Michigan Business Tax that takes effect Jan. 1.

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A storm is brewing over the state sales tax on services that Michigan lawmakers passed in the wee hours last month.

Because lawmakers don't have time to deal with it now, the state Senate last week voted to push back by three weeks the date the tax goes into effect.

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Instead of paying the maligned services tax, businesses would instead tack a surcharge onto their Michigan Business Tax liability under legislation that passed contentiously late Thursday. But House Speaker Andy Dillon (D-Redford Twp.) said after the vote he's leaving the door open to possible changes in the bill headed up by a proposal Rep. Brian Calley (R-Portland) is working on dealing with adjusting the gross receipts and business income rates in the MBT.

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For many years the Legislature has taken two weeks off during deer hunting season -- a custom that's
controversial this year because of pressure to repeal and replace the new sales tax on services before it
takes effect Dec. 1.

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The Senate Finance Committee approved a bill repealing the new 6 percent services tax Tuesday, continuing an effort by opponents to block implementation of the
controversial new tax before it even goes into effect on Dec. 1.

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The ill-conceived state services sales tax needs to be repealed and replaced with a special surcharge on the Michigan business tax that will end in 2011 -- along with serious reforms in state government spending.

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As expected, the Michigan Senate voted 23-15 Wednesday to repeal a much-maligned tax on services such as business consulting, tanning and graphic design before it takes effect Dec. 1.

The full House could follow up as early as Thursday with a plan replacing the $614 million the tax would generate this fiscal year.

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With the clock ticking towards imposition of a new use tax on services on Dec. 1, the Senate Finance Committee this afternoon moved legislation to repeal the levy without replacing the $750 million a year ($613 million in Fiscal Year 2008) in lost revenues.

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The House Tax Policy Committee today took testimony from business groups on the use tax expansion to services the Legislature passed and Gov. Jennifer GRANHOLM signed into law five weeks ago as part of the package to avoid a prolonged state government shutdown.

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As Michiganians wonder if they will be paying a new service tax beginning Dec. 1 and school districts struggle to pay bills because state funds are late, state legislators are readying for an important annual event.

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Pragmatic business leaders are offering Lansing a way to dump a crazy new state services tax while retaining
essential revenue. Lawmakers of both parties should jump at this deal.

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The service tax created by state lawmakers as part of this year's budget deal does a decided dis-service to Michigan.

The tax is arbitrary, anti-growth and creates an ungainly new accounting structure businesses would have to pay through the nose to implement -- just the kind of lousy policy you'd expect from the slapdash, ham-handed process lawmakers used to create it.

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An unexpected gift arrived at the state Capitol last week as major business groups offered to accept a
temporary rate hike in the new Michigan Business Tax if Gov. Jennifer Granholm and the Legislature will drop their ill-conceived services tax and go back to the drawing board on revenue.

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Leave it to Paul Hillegonds to find a silver lining in the state budget debacle. Being a grumpy old cynic, all I can see in the colossal debacle Lansing made of the spending blueprint is bad news for Michigan's future.

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To public relations executive Barbara Lezotte, Michigan's new tax on services is a punch in the gut.

Her small Lansing consulting company, Lezotte Miller, has had to retrench during Michigan's
prolonged economic downturn, cutting jobs and health care benefits. She recently added employees to bring her staff up to five people, for the first time since 2001.

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The Senate fired off the first of what may be several attempts to scratch the wildly unpopular use tax expansion on services today by passing legislation that would postpone the tax's start date 20 days from Dec. 1 to Dec. 20.

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Gov. Jennifer Granholm on Wednesday said she would not veto around $56 million in need-based grants for students attending Michigan private colleges, rounding out a budget deal with the Legislature that ended earlier in the day.

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The state budget approved early Wednesday brought a not-quite-happy end to months of negotiations and mutual recriminations between Democratic and Republican leaders.

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Nine months of shirking responsibility and playing the most vile brand of politics -- and 30 days past due -- and Michigan's elected leadership has at last delivered a balanced budget. The deal keeps the state staggering ahead, but it doesn't substantially change its course. Nor does it put an end to its chronic deficits. Like each of the past seven budgets, the one for 2007-08 will achieve balance through one-time fixes and by pushing ahead today's financial problems to tomorrow.

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MEDICAID
The money: $8.5-billion budget is up $373 million. Of that total, $2 billion comes from state tax dollars, the rest from federal government.

The impact: Keeps coverage for eligible 19- and 20-year-olds, as well as nonparental child caretakers,
such as grandparents.

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Gov. Jennifer Granholm and 148 lawmakers ended nine months of haggling over the state's budget crisis by essentially agreeing to preserve the status quo.

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A new state budget was approved by the Legislature early Wednesday morning, ending nine months of wrangling between lawmakers and Gov. Jennifer Granholm that produced a large tax increase, a brief government shutdown, raw nerves and some steps to rein in mushrooming costs to taxpayers.

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While the $43 billion 2007-08 state budget does not become law until Gov. Jennifer Granholm signs each of the 17 budget bills, she and state lawmakers have agreed to major pieces of the spending plan.

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After controversial tax hikes, some difficult spending reductions, occasionally nasty negotiations and even a four-hour government shutdown, Michigan closed in late Tuesday on a balanced state budget.

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Michigan's fragile state budget agreement was reached in the middle of the night after months of sometimes painful give-and-take between lawmakers and Gov. Jennifer Granholm.

Shortly after the sun came up Wednesday, it was clear the negotiations and the pain aren't over.

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Legislators today were expected to complete a drawn-out, nine-month struggle to balance the state's budget for the 2008 fiscal year.

The House approved budgets Monday night for most state departments on a largely bipartisan basis.

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Universities and community colleges will receive a 1 percent increase in state aid for operations as Michigan legislators complete what has been a drawn-out, nine-month struggle to balance the state's budget for fiscal 2008.

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State Rep. Dan Acciavatti, R-Chesterfield Township, is anxiously awaiting passage of the state budget so he can start the process of repealing its most controversial plan - the expansion of the state's sales tax.

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With little time left, lawmakers and Gov. Jennifer Granholm were still divided Monday over whether more private providers should handle adoption, foster care and juvenile justice services — the big sticking point in resolving the state budget.

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If Gov. Jennifer Granholm vetoes money for private college tuition aid, as threatened, she'll be overridden by the Legislature, a top legislative Democrat said Friday.

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The Legislature's decision to extend the state sales tax to dozens of services has roiled Michigan politics and thrown the state's business community into a state of anger and confusion. It also has sparked -- after the fact, unfortunately -- a debate on how the state should assess taxes. And as that debate continues, there's growing sentiment that taxing services isn't the way to go in Michigan.

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The leading House Democrat on the state budget warned Gov. Jennifer Granholm not to try to eliminate $57 million in state grants for private college students to balance the budget, an issue he said is blocking a final agreement.

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Thirteen months is more than enough time for Gov. Jennifer Granholm and the Legislature to come to agreement on balancing the state budget. Any talk of extending budget deliberations for yet another month -- or possibly three -- should be shut down before entering this final weekend of negotiations.

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State government edged closer to a second fiscal crisis Wednesday as leaders huddled to try to hash out $433 million in budget cuts and lawmakers postponed meetings to finalize two departmental budgets.

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Good economic times come and go. The economy waxes and wanes. It grows hot but eventually cools. Then the cycle repeats. Hot. Cold. Again and again. Over and over.

The state of Michigan's revenue correlates with Michigan's economy. When the economy is strong, revenue is high. When the economy is weak, revenue dips.

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Legislative leaders and administration officials said Tuesday they can reach a final budget deal without a government shutdown or 30-day extension of the temporary budget now in effect.

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Putting a limit on how long someone can serve in the state Legislature has led to greater opportunities for people to get involved in state government, particularly for women and minorities, some believe.

But others say it has led to inexperienced people making critical decisions on the direction the state is headed, and it has been blamed in part for the recent budget debacle in Lansing.

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Since the 11th-hour agreement on raising taxes to make Michigan's 2008 budget balance, the capital city has been alive with activity.

A coalition of business groups, led by the state Chamber of Commerce, has launched a drive to repeal the sales tax on services included in the deal.

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The Legislature has run out of tricks and now it's running out of time - again.

The Halloween deadline for the 30-day budget extension is nine days away, but the partisan bickering that pushed the government into a five-hour shutdown on Oct. 1 is rearing its ugly head.

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Roughly a half-dozen key areas of disagreement remain among lawmakers trying to balance the state's budget before next week's deadline to avoid another potential partial government shutdown.

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With efforts to repeal the state's new service tax ramping up in the Capitol, changes to another tax paid by business — the new Michigan Business Tax — are being eyed for replacement revenue.

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The Legislature has run out of tricks and now it’s running out of time — again.

The Halloween deadline for the 30-day budget extension is nine days away, but the partisan bickering that pushed the government into a five-hour shutdown on Oct. 1 is rearing its ugly head.

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The ink on two new tax increases was barely dry this month when a lot of influential Michiganders went wobbly on what was done.

Business groups want state lawmakers to repeal the 6 percent sales tax that was extended to some services.

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Gov. Jennifer Granholm and state lawmakers are acting as if they have some choice other than to balance the state budget before the Oct