LANSING – While it took nearly seven full months from when the budget was proposed for the House and Senate to pass out their originated budget bills, the almost scary fact is: this may have been the easiest part of the process.

For the Legislature and the administration to reach concord on a budget agreement by October 1 means everyone will have to strap in for a furious ride on a ground-hugging rocket that can miss remaining obstacles to reach agreements on spending levels, spending cuts and tax increases.

A tentative schedule to get the budget bills into conference committee has been penciled out by legislative leaders, and sources indicate the leaders have already decided which lawmakers should sit on the conference committees so they can get a head start on framing those final budget bills.

But, before conference committees can reach an agreement, they will need final budget targets. And deciding on the targets will require a decision on whether and how much to raise taxes.

Officially, Senate Republicans are not giving up on the idea that cuts and reforms alone could solve the upcoming budget without reverting to a tax increase. On Friday, Senate Majority Leader Mike Bishop (R-Rochester) announced a proposal for an early retirement program for state workers that he said was an example of Senate Republican commitment to reform.

Privately, however, there is something of a glum recognition that a tax increase of some sort likely cannot be avoided. “It’s a big number to make up” in cuts and reforms, one source said.

Sen. Michael Switalski (D-Roseville), the ranking Democrat on the Senate Appropriations Committee, said budget bills passed both houses are between $1.2 billion and $1.8 billion shy of expected expenditures and estimated revenues.

“That means either new revenue or some major accounting trick,” Switalski said. “I think you have to assume new revenue.”

In their discussions on the budget, one area Bishop and House Speaker Andy Dillon (D-Redford Twp.) are focusing on is how big a hole would be left from the estimated revenues for the fiscal year and proposed expenditures (after cuts and reforms are included). The size of the hole will largely determine the size of any tax increase.

Sources also said that the two men – who were scheduled to speak again on Friday and then throughout the weekend – have actually covered much ground in their budget discussions and so will be a little better prepared to give guidance to their members when legislators begin discussions on the final agreements.

On the Senate side at least, leaders hope that the Appropriations subcommittees will report out their versions of the House-originated budget bills during the week following the Labor Day holiday.

Senate subcommittees have already held discussions on the House originated budgets, so getting agreements should not provide too difficult several sources said.

And the Senate versions of the budgets for higher education, K-12 School Aid, the Department of Community Health and others will be dramatically different from the House version.

That will be in keeping with how the Senate handled its originated bills, all of them passed at about $163 million less than the proposal by Governor Jennifer Granholm. Final figures have not yet been calculated on how much more than Ms. Granholm’s proposal the House bills are.

Sources said the hope is to have the budget bills in conference committee by mid-September at the latest, leaving roughly two weeks before the end of the fiscal year.

Sources said that all parties are committed to meeting October 1 deadline, and for all the talk about the possible need for a continuation budget there has been no serious work undertaken by staff members to establish how a continuation budget would be configured. No one wants a continuation budget, sources said.

There is also a tacit understanding that whatever final agreements Dillon and Bishop reach, Granholm will have to agree as well. The two sides have been in constant communication with administration officials on the budget talks, though the administration has not been brought directly into the talks.

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

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