LANSING ? Michigan Treasurer Robert Kleine was subjected to half an hour of questioning by the Senate Government Operations Committee, but with none of the pointed questions that might have been expected from concerns raised when his appointment to the post was first announced.

Instead, the committee unanimously supported his appointment with compliments from Senate Majority Leader Ken Sikkema (R-Wyoming) on both his qualifications and character.

“You clearly have the knowledge, the experience and the qualifications to do this,” Sikkema said at the completion of the hearing. “More important to me, you also have the personal integrity and willingness to work with the Legislature.”

Kleine, in questioning, said he “envisioned a very close relationship” between himself and the legislative tax committees.

And he reiterated his call for an end to the Single Business Tax, a tax that he helped to create as director of revenue and tax analysis for former Governor William Milliken.

“The current Single Business Tax is a shadow of its former self,” Kleine said. “It’s become much too complicated and I understand it’s become a distraction.”

He said he was working with business groups now to develop a replacement for the tax, but he echoed Gov. Jennifer Granholm’s call that any replacement not shift tax burden to individuals.

He said he also would be working to revise the personal property tax. “Personally I think the personal property tax is more of a problem for business than the Single Business Tax,” he said.

But he said the final tax structure would have to be a compromise. “We’ve got to come up with something we can all agree to,” he said. He said Granholm’s proposal on eliminating the SBT was “kind of moving us in the right direction.”

Kleine also defended his earlier statements that he felt the state had a revenue problem, not a spending problem. While he acknowledged that Sen. Nancy Cassis (R-Novi) was correct that state revenues had increased at more than the rate of inflation for the past decade, he said that growth was from federal and state restricted funds.

“Since 1997 general fund is down 30 percent,” he said. That has pushed Medicaid and other large expenditures to be higher percentages of general fund spending.

And he argued there was room to increase revenues without harming the business climate given that the state is 36th in business tax burden.

“We have to look at what we’ve done since the 1990s to improve the business climate,” he said. “I think we need to make more of our accomplishments and less of our differences.”

One area the state is losing revenue is sales taxes on catalog and Internet sales, but Mr. Kleine said that problem could not be addressed without federal action to allow states to impose sales tax collection on out-of-state sellers.

He said the line on the income tax form asking about mail-order purchases has done little to generate revenue from those sales.

Getting federal law changed would again require working with the business community, Kleine said. Currently many of the businesses collecting sales tax on mail-order sales are doing so voluntarily. “If we got enough participants we might be able to resolve some of the philosophical opposition (in Congress),” he said.

Kleine said he would also likely be coming to the Legislature for some changes in the state’s oversight of local government finances. Noting that there are a number of municipalities struggling financially, he said, “We may need some (new tools). We do have some ideas we’re kind of working on.”

And he said the department in the coming weeks would be reissuing a request for proposals to help counties audit homestead property tax designations. He said the bids from the first round did not meet the state’s requirements for the project.

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