LANSING – All of the proposed tax increases and changes – cigarette, liquor, estate tax decoupling and the casino tax – failed Thursday in the Senate, but the cigarette tax increase may have enough votes to eventually pass.

In an effort to spur compromise in the budget target discussions underway, Senate Republicans held votes on two substitutes for the proposed 75-cents a pack increase in the cigarette tax (but not on the bill as it came from the House).

While neither proposal passed, the combined number of “yes” votes for each proposal – the 16 Democrats who backed Governor Jennifer Granholm’s initial proposal and the five Republicans who voted for a substitute proposed by Senate Majority Ken Sikkema (R-Wyoming) – could form the majority needed to pass a compromise cigarette tax increase.

Also falling short in the chamber: Ms. Granholm’s proposed increase in the state liquor tax that could bring the state some $10 million for the rest the current fiscal year and $32 million for the 2004-05 year and her proposal to continue a Michigan estate tax once the federal tax ends.

The chamber also defeated a bill to double the state’s casino tax – a proposal that requires 29 votes for passage because it would amend an initiated law – as the measure failed to win even a simple majority of the Senate.

“The fact is,” said Senate Majority Leader Ken Sikkema (R-Wyoming) that the budget discussions are not going well, “because there is no willingness to compromise on the cigarette tax. It’s all been no, no, no.”

And he said there “will not be votes for the governor’s plan because it’s one-sided.”

But Granholm’s spokesperson said the administration has demonstrated all along a willingness to work with and compromise with “the Legislature in a bipartisan manner on behalf of the citizens of the state.”

Liz Boyd also said Granholm has “proposed a balanced budget and a means to pay for it.” The Legislature has proposed spending more than the state has in revenues, she said. “It is time for the Legislature, particularly the Senate, to get real.”

The Senate’s action Thursday summed up efforts lawmakers and the administration took on the budget this day. A meeting on budget targets between legislative leaders and the administration was cancelled, and a new meeting time has not yet been set.

Discussions began last week on budget targets, and on Wednesday a number of officials said the talks had so far produced no agreements.

On the cigarette tax, HB 5632. the Senate first acted on a proposed substitute that would restore the bill to Granholm’s initial proposal that would have dedicated the revenues raised to the state’s Medicaid fund.

Senate Minority Leader Bob Emerson (D-Flint) said it only made sense to allocate the funds to Medicaid since that is the fastest growing part of the state’s budget, and those that smoke tend to be poorer and tend to need more health services.

Emerson said he had proposed “fairer” taxes, including an increase in the income tax, to help resolve the state’s budget situation. But “if we tax poor people, if we are going to impose this unfair tax,” it would be unfair to use the revenues for anything but those health care services, he said.

And Ms. Boyd said the administration would stand up for the most vulnerable citizens. “We’re not going to stand by and let health care for children, seniors and persons with disabilities to be held hostage by one person and one plan,” she said.

But Sen. Tom George (R-Portage) said it made more sense to vote for a cigarette tax increase that would fund education and economic development, since better-educated people are less likely to smoke.

That substitute was defeated on a 16-21 straight party-line vote, with Democrats supporting it and the Republicans opposed.

The chamber then voted on a substitute from Sikkema that would have credited the revenues to the general fund, a measure that he called a “fairer way” to proceed.

That proposal failed 5-32, with just Sikkema, George and fellow Republicans Bev Hammerstrom of Temperance, Shirley Johnson of Royal Oak and Gerald Van Woerkom of Norton Shores supporting it.

Combining the “yes” votes from both proposals – since there is no overlap – means that at least 21 senators are on record as supporting some form of a cigarette tax increase. Sen. Michael Switalski (D-Roseville) made that point and urged the two sides reach a conclusion.

This story was provided by Gongwer News Service. To Subscribe, click on Gongwer.Com