LANSING – The Granholm administration will formally outline its proposed rewrite of the Single Business Tax on Wednesday in briefings to reporters and in a presentation to Senate Finance Committee.
Meanwhile, Senate Majority Ken Sikkema (R-Wyoming), who expressed a willingness to work on the SBT but also wants changes in school health care provisions, said last week’s assessment of the number of districts in financial trouble make it imperative to move quickly on the insurance issue.
Although there is resistance in the business community and among some legislators on tackling the SBT rewrite in lame duck, Granholm spokesman Liz Boyd, said: “We’re very serious about this. This is something we’ve all been working on. We have to come up with a budget in 60 days based on revenues in 2008.”
The SBT, and the $1.9 billion it produces, is set to expire December 31, 2007. Ms. Granholm has said a new proposal will be based on the principles of last year’s restructuring plan which lowered the rate, applied the tax more broadly, reduced taxes based on compensation and geared it more to profits. The governor also said she wants substantial relief for personal property taxes. The GOP-led Legislature held hearings on the prior plan but buried it in part because of big tax increases in some non-manufacturing sectors.
Treasurer Robert Kleine and special assistant treasurer Scott Schrager will brief reporters at 9 a.m. Wednesday on the new proposal and will follow with a presentation at noon with the Senate Finance Committee. The governor will also discuss the plan with reporters at 9:30 a.m.
House Speaker Craig DeRoche (R-Novi) continues to leave the door open to dealing with the issue in lame duck – particularly if a good idea surfaces – but continues to say there is no reason to rush a proposal through the Legislature, said spokesperson Matt Resch.
Sikkema, who said the legislation pending in the House would save school districts $570 million over three years, said the financial bind facing districts shows that “we can’t afford to wait any longer.”
Reports on Friday indicated the number of districts in deficit and the number with fund balances of under 15 percent have doubled in the past three years, with additional troubles ahead due to revenues for this year and the year just ended down by some $280 million.
The bills (SB 895 , SB 896 , SB 897 and SB 898 ), requiring competitive bidding for health insurance, are pending on the House floor.
“You cannot address the short-term or long-term health of school financing in Michigan without addressing the cost of health insurance for teachers,” Sikkema said.
DeRoche has said he wants to work on the bills, but needs some Democratic support to get the package through the House, something that has not yet happened. “So far, the Democrats in the House and the governor have not been open to talking to us about that,” said Resch.
Opponents of the bills, including the Michigan Education Special Services Administration and the Michigan Education Association, say no savings have been proven and that districts already engage in competitive bidding. They also say that teachers have taken less in salary increases through negotiations to offset the increases in health care costs.
This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com
