LANSING – House Republicans will hold committee hearings on a proposed constitutional amendment to limit state spending to the combined rate of inflation and population growth, a counterproposal to Gov. Jennifer Granholm’s plan to amend the state constitution to sell $2 billion in bonds to invest in research and advanced technology businesses.

The theory goes that Granholm will need at least 22 Republican votes in the GOP-controlled House to obtain the required two-thirds majority to put her plan before voters. So in exchange for Republicans assenting to put her plan on the ballot, Democrats would agree to provide the necessary votes from their party to put the constitutional amendment restraining spending on the ballot.

Modeled after a system used by Colorado – the only state to restrain spending in such fashion – some Republicans are touting it as a bold counterproposal to what Granholm has recommended with her bond plan to invest in cutting-edge businesses.

There are two similar proposals. One, HJR E, already has been introduced by Rep. Jack Hoogendyk (R-Portage). Rep. Leon Drolet (R-Clinton Township) has requested the introduction of similar legislation.

House Republican leadership will likely be cautious with Hoogendyk’s measure because he is a candidate for governor and running his proposal could be seen as aiding his candidacy.

Under the proposal, if incoming revenues exceeded the combined inflation and population growth rates, then those revenues would be rebated to taxpayers. If inflation is 3 percent and population growth is 2 percent, then the state could raise spending by 5 percent. State government could ask voters to approve exceeding the spending limit.

Drolet said this plan has been a boon to Colorado, which had an unemployment rate of 5.1 percent in March and is seeing significant population growth. He said it also has helped the state weather the recession through using revenues stockpiled in the late 1990s – something he asserted would have helped Michigan when revenues were roaring in the late 1990s.

According to data compiled by Drolet’s office, the proposal has resulted in the rebate of more than $3.25 billion to Colorado taxpayers. He said it also deserves credit for Colorado’s strong economic and population growth because it gives business the security of knowing state government cannot spend big during times of flush revenue and then raise taxes in the future to sustain such spending.

“You’re not going to find a lot of legislators in Colorado who love it,” he said. “But you’re going to find a lot of citizens in Colorado who love it.”

Drolet said House Republican leaders have told him to hold hearings on the plan at his Government Operations Committee and “see what the level of interest is.”

On its own, the plan would likely stand no chance of getting on the ballot because with a 58-52 House majority, Republicans would need at least 16 Democratic votes to obtain the needed 74 for a two-thirds majority. But by linking it to Republican votes to put Ms. Granholm’s plan to invest the money from bond sales into cutting-edge businesses, Mr. Drolet sees potential.

Granholm press secretary Liz Boyd said the governor’s office had “no reaction” to Mr. Drolet’s proposal.

Tricia Kinley of the Michigan Chamber of Commerce said the organization would need to see the details of the plan before deciding on it, but as a stand-alone proposal she indicated it had potential But Kinley said the Chamber could not support linkage between the spending restraint plan and the governor’s plan. The Chamber adamantly opposes the aspect of the governor’s proposal that would have the state invest in equity for emerging businesses. “We don’t see those two as complementary proposals,” she said.

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