LANSING – An agreement on resolving the budget for the current year and 2004-05 year that begins October 1, presumed to be just a matter of time, is starting to look less and less like a foregone conclusion. On Monday, the Senate canceled session for this week and next week. The House also canceled its Wednesday session, and it will likely scrap session for next week because of the Democratic National Convention.

Surprisingly, the stalemate has resulted not from a dispute between Democratic Gov. Jennifer Granholm and the Republican-controlled Legislature. Instead, it’s the Republican-led House and Senate producing the logjam over how to handle a bill increasing the casino tax and the racino bill that would authorize slot machines at the state’s horse racetracks.

Granholm has called off formal budget negotiations with Republican lawmakers until the House and Senate can find a compromise on how much to raise the casino tax, which would produce at least $50 million in new revenue for the budget. The House has called for doubling the tax while the Senate prefers a 33 percent increase.

But backers of racinos want the House, which is more sympathetic to their cause than the Senate, to delay passing a casino tax increase until the racino bill passes both chambers. Racino supporters fear the Senate will abandon their bill if the casino tax increases passes the Legislature first.

It all adds up to the entire budget remaining unresolved into August, something that has not happened since the 1970s. Still, the administration and lawmakers have until September 30 to enact a budget for the next fiscal year.

Greg Bird, spokesperson for the State Budget Office, said he is not alarmed at this point by the status of the budget.

“We feel pretty confident that we will work out a deal,” he said “Just because there are no formal meetings between us, there are still informal discussions taking place all the time. It’s not as if nobody is working toward a resolution on this budget.”

Rep. Larry Julian (R-Lennon), the lead supporter of the racino bill, met Monday with senators and Senate staff in search of a compromise on the issue, but said they remain at odds. He said there would be no meeting of the House-Senate conference committee this week that is considering the bill (HB 4610) and did not know when it would convene.

Julian said House Speaker Rick Johnson (R-LeRoy) told him the House-Senate conference committee handling the casino tax increase (HB 4612) also would not meet. It’s unclear when either committee will convene, he said.

Sikkema spokesperson Bill Nowling said the impasse on racinos is affecting the entire budget.

“In the Senate, we’ve passed out a balanced budget with a moderate increase in revenue and the rest in cuts,” he said. “It seems a bit of a shame to hold up action on the ’05 budget for something where we wouldn’t see the revenue for two years at least.”
Johnson spokesperson Keith Ledbetter said the casino tax/racino dispute is putting off discussions on the rest of the budget. “People’s views change based on the outcome of the other,” he said.

Ledbetter said there is frustration that the administration refuses to meet formally until the casino tax issue is handled. Of the Senate upset over the racino situation holding up the budget, Ledbetter said either side could be blamed for the current situation.

Johnson is not ready to declare racinos dead, but Ledbetter said Johnson will have to decide what to do next. “Racinos may have had better days than today,” he said.

This story was provided by content partner Gongwer News Service. To subscribe, click on Gongwer.Com