Great Lakes Politics

Governor Jennifer M. Granholm (D, MI) used her weekly radio address last Friday to make the case that diversifying our economy and investing in our people makes Michigan strong.  I completely agree with her.

Of course, I hasten to add that there are a couple of other things that make Michigan stronger.

• Find a solution to Michigan's budget problems that doesn't rely entirely on raising taxes.  This blog has published several ways in which in can be done.  It would be nice if she could think of at least as many;
• Replace Michigan's Single Business and Personal Property Taxes with a traditional corporate income tax;
• Enact enabling legislation for DARTA.

Hopefully, Ms. Granholm will use next week's radio address to discuss those issues.

Posted by fnemecek at 03:17 PM | Permalink

Detroit's Mayor Kwame M. Kilpatrick was re-elected for a second term only 14 months ago.  However, there is a group calling itself the Coalition of Detroit Activists, or CODA, that wants to recall him from office.  They argue that Mr. Kilpatrick hasn't done enough to address Detroit's problems.

I find it somewhat ironic that this is coming from the same group of individuals who, a year or so ago, were arguing that one term in office wasn't enough time for him to accomplish all that needs to be done.

Of course, I find it to be extremely ironic that the letter I received from this group - which purport to be made up of Detroiters who care deeply about their city - has a Royal Oak post mark on it.

Posted by fnemecek at 03:05 PM | Permalink

The Dearborn Press & Guide is reporting that Comprehensive Environmental Solutions, Inc. and three of its former employees have been idicted for illegally dumping toxic waste into Detroit's Water & Sewage System.  A federal grand jury returned a 12-count indictment against them last week, charging them with violations of both a city ordinance and the Clean Water Act.

The company, according to the indictment, had been doing this since March, 2002.  While I'm thrilled that these polluters are being prosecuted, the fact that it took the government roughly 4 year to bring them to justice is somewhat troubling.

 

Posted by fnemecek at 01:27 PM | Permalink

Governor Jennifer M. Granholm (D, MI) isn’t scheduled to unveil her new tax plan formally for another couple of weeks.  Republicans in the Michigan Senate, however, managed to strike first with their own plan, which they are calling the Business & Economic Stimulus Tax proposal or BEST.

The BEST proposal was introduced in Lansing on Thursday by Senate Majority Leader Mike Bishop (R-12, Rochester) and Senator Nancy Cassis (R-15, Novi) cuts taxes for Michigan businesses by $290 million.  A major lynchpin of the legislation is the choice of taxation it offers. Businesses with gross receipts between $350,000 and $15 million will have the ability to choose to pay either a modified gross receipts tax or a business income tax.

Neither Mr. Bishop nor Ms. Cassis offered any specific proposals at to how the State of Michigan, which is already straining under a budget shortfall, should make up for the loss of $290 in tax revenue.  Instead, they offered the standard GOP mantra that "government should live within its means".

Quite frankly, I'm getting tired of people using that line.  As a private citizen who happens to write a blog, I manage to live within my means.  However, when I take on a new project that might effect my income, I always have an idea of what I'm going to do as a result.  Press conferences, I'm afraid, will not solve Michigan's problems. 

The BEST proposal is contained in Senate Bills 94-96.  Those bills have been sent to the Senate Finance Committee for consideration.  Since Ms. Cassis chairs said committee, one should expect a fairly prompt hearing.

Posted by fnemecek at 11:17 AM | Permalink

The Associated Press is reporting that U.S. Senator John F. Kerry (D, MA) will not join the already crowded field of potential Democratic candidates.  Instead, he will focus on getting re-elected to the U.S. Senate from the Bay State.

Hopefully, Mr. Kerry will be able to make his way through at least that contest without embarassing the Democratic Party. 

Posted by fnemecek at 03:41 PM | Permalink

According to an article in the Detroit News, there are those in Lansing who are considering a sales tax on services as a way to get a grip on Michigan's budget problems.  The proposals currently being floated include lowering the sales tax rate from 6% to 5%, but extending the tax itself to include personal services - such as hair cuts, legal services, movie tickets and so on.

Lieutenant Governor John D. Cherry, Jr. (D, MI) told reporters that all options should be on the table as Michigan tries to find a way to solve its budget problems.  Michigan Senator Ron Jelinek (R-21, Three Rivers) also said that everything, including a new tax on personal services, should be on the table.

Quite frankly, I'm thrilled that there are so many people who think that everything should be on the table.  I mean, if every option is on the table then that must mean that folks in Michigan are willing to consider things that aren't a new tax.

For example, the taxpayers of Michigan currently provide two mansions for our governor - one in Lansing and a second on Mackinac Island.  There is also a Governor's Residence Foundation, which covers at least some of the expenses associated with maintaining the property.  Still, however, that isn't enough to completely cover the costs associated with maintaining the two residences.

I, therefore, propose that we start renting out the Governor's Mansion on Mackinac Island whenever the Governor isn't using it for state business.  The rental income from this could make a nice dent in the overall cost of maintaining two residences for the Governor and the aforementioned Foundation would be perfect vehicle by which to carry out the rental.

Another option that should be on the table and looked at closely is Michigan Works! and the Michigan Talent Bank.  The Michigan Talent Bank is an on-line data base that lists jobs that are available in Michigan.

The problem is that there are already several such sites available to the public, such as Monster.com, HotJobs.com and MotorCityHelpWanted.com.  Those sites exist without costing the taxpayers a single penny.  One question that should be asked then is: why should the government actively compete with the private sector to provide a given service?

Last, but certainly not least, is the issue of Michigan roads.  Every time Michigan's economy slows down, one politician or another proposes that we accelerate road construction as a way of stimulating the economy.  Governor Jennifer M. Granholm (D, MI), in fact, made such a proposal just last summer.

Of course, given the current state of Michigan's job market, it's rather clear that spending more money on roads hasn't done anything to improve our economy.  Therefore, I believe it would be a very good idea to put a few road projects on the proverbial back burner for the next year or so.

Michigan has done so much road construction in recent years that a cut-back now would not spell an end to transportation in the Great Lakes State.

After all, as Mr. Cherry and Mr. Jelinek pointed out, every option should be on the table as we decide how to deal with Michigan's budget problem.  In the coming weeks, we will soon learn whether they are serious about that or if they are simply looking for more ways to suck more money out of Michigan taxpayers.

Posted by fnemecek at 10:12 PM | Permalink

Michigan Senator Gilda Z. Jacobs (D-14, Huntington Woods) and Michigan Representative Paul Condino (D-35, Southfield) are praising Governor Jennifer M. Granholm’s (D, MI) signing of PA 648, which will allow the Southfield school board to lower the school operating millage to 18 mills for primary residences in this school district.  The funding implementation will be addressed during the next legislative session.

The existing Proposal A funding formula inadvertently penalizes communities with large commercial tax bases.  Southfield school district, which includes Lathrup Village, is one of two districts helped by the new law.  The legislation will save the average Southfield homeowner approximately $77 annually.

“This reduction, while modest, is an important tool to attract and retain homeowners to aging Detroit suburbs,” Ms. Jacobs explained.  “It’s a way to address an inequity that is inherent to Proposal A.”

In most communities throughout the state, primary residence owners pay 18 fewer school operating mills than other property owners.  However, in Southfield and Lathrup Village, taxpayers pay the same millage rate whether or not they own a primary residence.  River Rouge is the second community adversely affected by Proposal A.

"Homeowners should not be punished with higher tax bills than their neighbors because the district has fewer homesteads to tax," Mr. Condino said.  "I thank the Legislature for their overwhelming bipartisan support of HB 4125, which will allow residents of Southfield and Lathrup Village to enjoy a small amount of the property tax relief other homeowners have long enjoyed under Proposal A."

Under the legislation, non-primary residence rates, including business and rental properties, would remain at the current rate as approved by voters.

Posted by fnemecek at 06:41 PM | Permalink

U.S. Senators Carl Levin (D-MI) and Debbie Stabenow (D-MI) announced today that four Michigan fire departments have been awarded $144,055 through the fiscal year 2006 Department of Homeland Security Assistance to Firefighters Grant Program (AFGP). The funding will be used to support operations and firefighter safety.

The AFGP awards grants directly to fire departments and EMS organizations to improve the effectiveness of operations and health and safety programs, and to establish or expand fire prevention programs throughout the United States. Grants are awarded competitively through an application process.

The four fire departments are:

• Barton City Volunteer Fire Department in Barton City, which received $46,360;
• Coloma-Hagar Fire Department in Coloma, which received $21,386;
  
• Oakfield Township Fire Department in Rockford, which received $45,125; and
  
• Salem Township Fire Department in Burnips, which received $31,184.
  

Posted by fnemecek at 06:20 PM | Permalink

Governor Jennifer M. Granholm (D, MI) announced this morning that she was appointing a bi-partisian, twelve member advisory panel to make recommendations on how to remedy Michigan's budget problems.  The new Emergency Financial Advisory Panel is co-chaired by former Governors William G. Milliken (R) and James J. Blanchard (D).

Ms. Granholm has asked that the panel report back with its recommendations by the end of January.  Since that only gives them a couple of weeks to figure out how to resolve a budget deficit that is estimated at close to $500 million, I believe that it would be good to give them a couple ideas to get the process started.

Quite frankly, I believe that Michigan can do a lot to soften the blow of budget cuts by simply doing a better job of collecting the money is already owed to the State of Michigan under existing tax laws.

For example, the Detroit area alone is home to 47 different strip clubs.  Add in the rest of the Great Lakes State and you have a total that is close to 100 of these clubs.

The women who dance in these clubs can earn a rather significant income, with some of them approaching the $100,000 mark each year.  More importantly, they earn it entirely in cash.

Many of them are honest enough to pay taxes on their earnings.  Some them, however, do not pay any taxes at all.

According to some quick calculations that I did, targeting them for collections should garner the State of Michigan an additional $1.5 - 2 million in tax revenue.  That, of course, is a long way from solving Michigan's budgt problems.  However, every million that we are able to collect in taxes is a million that we don't have to cut from our schools or anywhere else in the budget.

It would be relatively easy to identify those dancers were aren't paying the income taxes that owe.  All dancers in Michigan are required to get caberet license from their local police department.  If the Michigan Department of Treasury were to simply cross-reference a list of individuals with such a license with their list of people who filed an income tax return, they could quickly identify those who aren't paying taxes on their income.

Plus, if this was done in concert with the Internal Revenue Service and the various Michigan cities that levy a local income tax, the burden of enforcement would be that much easier.

Continuing on the subject of collecting what is already owed to the State of Michigan, I was at a comic book convention last May at the Rock Financial Showplace in Novi.  I saw close to a quarter million in sales happen that weekend and none of the dealers collected any sales taxes on those transactions.  Since many of them actually came in from out of state, it's a fair guess that the Michigan Treasury never got its 6% cut.  That works out to roughly $15,000 in lost revenue.

I know that $15,000 really doesn't sound like much when one is thinking about a $500 million budget shortfall.  That is, until you remember that it's $15,000 from just that one weekend at just that one location.  Since there are events like this happening pretty much every week at more than a dozen locations throughout the Great Lakes State, one can reasonably expect that a better enforcement of Michigan's sales tax would bring in another $10 million or so to the Treasury.

We're still a long ways away from the $500 million that is needed to balance Michigan's budget shortfall.  However, the more we collect, the less we have to cut.  Since everyone in Lansing has their own program that they don't want cut, everyone in Lansing has vested interest in making sure that these other options to collect tax revenue that is already owed to the State is pursued.

Posted by fnemecek at 04:58 PM | Permalink

Governor Jennifer M. Granholm (D, MI) was sworn in for a second and final term of office yesterday.  In her inaugural address, she borrowed extensively from Detroit's Mayor Kwame M. Kilpatrick (D).  Her address focuses on building what she referred to as the Next Michigan.

Mr. Kilpatrick, by the way, has made the Next Detroit the cornerstone of his second term in office.

It's great to see that original thinking is so rampant in Lansing these days.

By the way, a complete copy of Ms. Granholm's inaugural address can be found on-line at http://www.michigan.gov/documents/gov/Governors_2007_Inaugural_Address_182153_7.pdf 

Posted by fnemecek at 01:38 PM | Permalink

For the benefit of anyone who doesn't read my personal blog, I was recently rear-ended by a drunk driver over the Christmas holiday.  The whole scenario has made me somewhat of a zealot in my belief that drinking and driving really don't go well together.

It also meant that there haven't been any posts to GLP in more than a week.

Anyway, being laid up for that long has given me an opportunity to think about a lot of different things; some of which are even relevant to a blog that focuses on Michigan politics.  For example, I've come to the conclusion that Michigan's no-fault auto insurance law is a broken system that desperately needs to be fixed.

I also had a chance to reflect on how desperately Michigan needs to change its single business tax and came up with a couple of ideas for its replacement.  (Believe it or not: there really isn't a lot else to think about when you're stuck inside of an MRI machine as they run one test after another.)

I'm going to take a moment to fine-tune these ideas.  I'll start posting them later this week. 

Posted by fnemecek at 01:31 PM | Permalink

U.S. Representative John C. Conyers, Jr. (D-14, Detroit) gave a speech at the Univeristy of Detroit-Mercy's Law School recently.  When an audience member showed up with a sign that simply read "Impeachment", Mr. Conyers admonished the student to give the impeachment issue a rest.

I can't help but think that this is interesting.

The man who single-handed campaign for the impeachment of President George W. Bush (R) is now back-peddling from the very idea and doing so on the eve of assuming the chairmanship of the House Judiciary Committee, the committee that would normally be responsible for any impeachment hearings.  Some commentators have said that this change in thinking is because is wants to focus on issues that have a greater chance of getting passed since an impeachment would require a 2/3 vote in both Chambers of Congress.

Personally, I don't believe this rationale for a minute.  Mr. Conyers has long gone after issues that had even less of a chance at passing than the impeachment of Mr. Bush.

I think this has a lot more to do with a recent agreement that he reached with the House Ethic Committee, whereby they agreed to drop an official investigation into his use of congressional staff members for personal errands as well as paying them a congressional salary while they were performing political duties.  The Ethics Committee agreed to drop the investigation, only requiring Mr. Conyers to more closely monitor his staff.  Right after that, Mr. Conyers indicates that he no longer has an interest in impeaching Mr. Bush.

A coincidence?

I seriously doubt it. 

Posted by fnemecek at 12:55 PM | Permalink