Were you expecting responsibility? Really? Will you ever learn?
Gov. Jennifer Granholm wants to use a looming cash crunch to force legislative action on her budget, but Republican lawmakers say there's an easy way out.
Republicans are always looking for the easy way out, and that involves delaying payments, more borrowing, and taking money from other places. Notice there is no permanent answer to the problem here.
Since Michigan is constitutionally barred from running a deficit, the state has plugged periodic budget holes with short-term borrowing and accounting changes. Republicans Wednesday suggested the May budget hole could be plugged through similar means.
Kleine said the problem is that the state has reached its short-term borrowing limit for fiscal 2007. The state borrowed its maximum of $1.3 billion last November to keep cash in the till through the end of the fiscal year on Sept. 30, when the loan has to be repaid.
Monthly shortfalls in revenue collection since then mean the state is constantly scrambling to stay solvent. On May 20, the state will be nearly $390 million in the red, but the number could balloon to $700 million, Mark Haas, Kleine's chief deputy, told the Republican-led Senate Appropriations Committee Wednesday.
On that day, "we have a real problem," Haas said.
Nah, not a problem, said the Republicans, pay them on the 21st!
Haas conceded the point made by Sen. Tom George, R-Kalamazoo, that a big part of the cash flow problem is one of timing, which could be solved by sending schools the money on the 21st. That would take a relatively simple change in state budget law.
But what about the next payment? No answer. OK, let's take the money from someone else!
Republicans also suggested that Kleine already has the authority to borrow the money from other state restricted funds, such as the Natural Resources Trust Fund.
Kleine pointed out this is no solution.
Kleine says such accounting gimmicks are partially responsible for the current fiscal mess. Because the state hasn't made structural fixes -- cut programs or raised taxes -- during five years of budget turmoil, it has borrowed $1.3 billion annually to stay afloat.
So, no solutions from the Republicans, except for gimmicks, delays, borrowing, and taking food from grandma.
Let's turn to the Democrats. Any help there? At least they are stumbling towards a more permanent solution. We think, hard to tell. Rumors of an income tax increase again.
Some Democrats Wednesday said the quickest way to get money into state coffers was through an increase in the state's income tax rate, which has been shaved to 3.9 percent from 4.4 percent since 1999. Taking the rate back up to 4.4 percent would generate nearly $900 million annually.
And from the Freep comes a glimpse of Dillon's idea- and at first glance a deep sense of unease arises.
Anytime you put the words "monopoly" and "DTE" together in a sentence, red flags start waving.
Democratic House Speaker Andy Dillon is drafting a plan for a novel but controversial tax on electric utility companies as part of a sweeping proposal to erase the state's deficit and stabilize its finances for years to come.
In return for the utilities agreeing to the tax, the state would change the law to effectively eliminate competition for the two major utilities -- DTE and Consumers Energy -- to encourage them to build new power plants, said people familiar with the plan who spoke on condition of anonymity. One expert said the utilities would expect to pass the tax cost along to customers.
Of course they will pass it along. We need to stop being so surprised that costs get passed along. Knock it off already.
The utility tax would generate as much as $1 billion annually, said the people familiar with the concept. Dillon outlined his plan Wednesday for executives at Consumers Energy in Jackson.
The tax would be a controversial alternative to Gov. Jennifer Granholm's proposed 2% tax on services, which has been declared dead by legislative Republicans and Democrats alike. It would generate revenue for the state without a general tax increase. The Michigan Public Service Commission would have to approve any rate increase linked to the tax. The PSC has called for new power plants to replace the state's aging ones and meet the state's growing energy appetite within eight years.
As usual, Dillon had no comment for anyone, but is expected to reveal his plan today.
Dillon declined comment. It was not known whether the utility tax would be part of a budget plan he is to announce today. Consumers Energy officials had many questions after hearing about Dillon's idea.
That instills trust, doesn't it? Perhaps Dillon doesn't want anyone to pick apart his plans, but the secrecy surrounding this guy and lack of candor with the media doesn't help the face of the Democratic Party. Instead of taking charge and commanding the public talking points ( "We won't cut schools!"), they hide as much as the Republicans do.
Doesn't matter, the Senate is leaving on vacation- but first they want to slap the state employees again.
Republicans also proposed rescinding a pay increase in state employees' 3-year contract, saving the state $110 million in the next fiscal year.
But the move was largely symbolic. Two-thirds of the House and Senate would have to vote to reduce or reject the wage hike by April 8, and Democrats said they don't support the proposal.
The Senate Appropriations Committee didn't vote on the proposal Wednesday, and the full Senate will begin a two-week spring break after its session today.
Ladies and gentlemen, it seems these people are going to lead us right over the cliff, just as soon as they get back from vacation. With Republicans refusing to negotiate and denying reality, and the Democrats being, well, Democrats, it doesn't appear that a solution will be found anytime soon.