Part Time / No Term Limits?

One of the efforts underway for the fall ballot is headed by the President and CEO of the Kalamazoo Chamber of Commerce, who is making it his mission to eliminate term limits, chop legislative salaries and make Michigan the 40th state with a part-time Legislature.

The man in charge, Steward Sandstrom, is confident that his efforts will be rewarded this fall. So far he’s collected more than 1,400 volunteers, has distributed a minimum of 8,000 petitions and convinced the Saginaw and Clarkston Chambers to join his group.
“We’re working with other chambers, the Kalamazoo Homebuilders were the first to come on board, and we’re working with other locals and state groups,” he said.

If Sandstrom is successful in his pursuit of a vastly reformed legislative schedule, the Legislature would have about six more weeks this year to get its work done. The Sandstrom effort would set a session day cap of 100 and require the Legislature to be gone by May 31 of each year.
“I would anticipate they are going to have committee meetings and hearings other times of the year,” Sandstrom says.

The Legislature currently has an average of 97 session days. Sandstrom said the 100-day cap gives them plenty of time to “discuss the important issues of the day.” The Kalamazoo Chamber’s reforms go well beyond session days. They also tie lawmakers’ salaries to 80 percent of the state’s median household income, which is $39,000, a vast dip from the $79,000 they make today. Anyone who doesn’t show up for session would have their pay docked. As for term limits, well, they’d be eliminated completely.

Sandstrom said he’s hopeful that once the proposal is on the ballot, the issue itself will entice people to vote in the affirmative. However, he still wants to get numbers that support his assumption that most people would be in favor of such a proposal. His proposal is just one of two efforts to change the way the Legislature operates. The other effort being pushed by a Saginaw-based father-son combo does not repeal term limits. Sandstrom’s had conversations with Greg and Al Schmid but was unable to get them to merge efforts.

“They really like (term limits) the way they are. We don’t think that that’s the best way to govern the state,” he said. “In fact, if the part-time Legislature goes through without a change in term limits we think that’s catastrophic.”

Every month the Governmental Consultant Services (MPTA’s lobbyists) publish an update on legislative topics of general interest. You can read the latest insights here: http://www.gcsionline.com/documents/Intel022208.pdf

Earlier this month the Federal Transit Administration released the final version of the regulations governing Charter Service. This update was written by Dale Marsico, Executive Director of the CTAA and appeared on the CTAA website recently.

I want to begin this letter by thanking all of you who participated in responding to the regulation during the comment period. When you read the first section of these rules you’ll see that many of the issues we raised together have been addressed by FTA. For a copy of the rule, http://www.ctaa.org/webmodules/webarticles/articlefiles/fta0114.pdf

There are several new items in this rule that were not in the proposed rule, including an expanded exemption for rural transit as well as ones for 5310, the JARC program and the New Freedom. Rural transit is given special protection for training activities, and all transit agencies receive an important exemption relative to disaster training. The regulations also address with clarity the concerns many of you have expressed about how they might affect demand-responsive transportation by clearly saying they are not within the scope of the rule and exempt from these requirements.

The rule itself appears in basically three sections. The first section reflects FTA’s responses on the comments people submitted, the second part is the rule itself, and the third is a series of questions and answers that respond to realistic situations. I’d suggest you consider starting with the question and answer section as you approach your review of the regulation. It makes the more formal discussion on other pages easier to understand.

It’s very important to understand that Federal Regulations are an ongoing process. Like many other issues in our government, no rule or decision is ever final. I invite you to read and study these rules carefully and try to address how they may effect you and what concerns they may create. We want you to send us your concerns so that we can request further information or search for possible changes that may be helpful. You can send these concerns to us at charterregs@ctaa.org. Speaking of final, this is not our final communication on this subject, but our first this year. We shall be completing a summary of the new rules to add to this discussion shortly.

Again, thanks to all of you for your help and contribution to this important process. Without your help this progress would have been impossible.

Dale J. Marsico, CCTM
Executive Director
CTAA

The Legislature completed work on the 2008 state budget by the October 31 deadline and Governor Granholm has signed into law the legislation. While there is a budget adjustment cut of $5 million from the Comprehensive Transportation Fund (CTF), this is significantly lower than some early projections. MDOT has made a commitment not to remove any additional funding from the Local Bus Operating (LBO) line item (the state’s main support for local transit system daily operations) to balance the necessary cuts in the CTF. In light of the state’s severe economic situation, this is a beneficial result for the state’s public transportation agencies. However, due to increased costs and no new total state dollars going to the LBO line item, transit agencies will still see their percentage of state support continue to drop to dangerous low amounts. All in all, though, this is a generally positive outcome for the state’s public transit agencies in the current state budget deliberations.

Here we are at the midpoint of October and, guess what? The legislative clock is ticking once again. That’s right, just when you thought it was safe to assume the state has a budget, here we go again. The legislature has until the end of October to enact the 18 individual budget bills incorporated in the 2008 state budget before the 30-day extension of last year’s budget expires. While everyone expects the job will get done, maybe even with time to spare, it nevertheless is a fact that there is still much work to be done in Lansing.

For additional information, click here to read the latest installment from our lobbyists at GCSI.

(10-01) At approximately 4:30 a.m. the House and Senate completed work on the package of bills to avert completely shutting down state government this morning. The current state budget has been extended 30 days and now, with the cuts and funding bills passed, the Legislature will go to work on passing a complete 2008 state budget. In the final package of cuts and funding bills approved, the Comprehensive Transportation Fund is slated to take a hit of $10 million. We will be posting complete details on the budget resolution’s impact on public transportation in the coming days, as all the details are sorted out.

(10-01)At the stroke of Midnight, the final bills in the legislative agreement to resolve the state’s budget crisis were still being pieced together by the House and Senate. Legislators were slowly, and grudgingly, putting up some of the necessary votes to pass individual elements of the overall agreement. Governor Granholm has vowed that the entire package must be approved by the legislators before she will sign the various bills into law. Measures to approve a temporary extension of the current budget were passed earlier on Sunday but it remained unclear whether the entire package would be approved and, if so, whether all state employees and all state operations would be fully functional by Monday morning at the start of the business day.

Previous Update information:

(9-28-07)As of late this afternoon it appears the state will be forced to shutdown effective at Midnight, Sunday night. The Governor and Legislature have not yet reached agreement on a new state budget, although talks are continuing. State employees were advised at mid-afternoon on Friday not to report to work on Monday unless a settlement is reached during the weekend and they are given further notice. Governor Granholm has released a press statement detailing shutdown activities by department. That press release is posted here on the MPTA website in its entirety at the bottom of this page.

(9-27-07) Governor Jennifer Granholm has asked for time during this evening’s 6 p.m. local television newscasts statewide to lay out the gravity of the situation involving the state budget. She is expected to tell citizens what will occur if a resolution isn’t reached today in the Legislature.

Meanwhile, here is the latest update from our MPTA lobbyists at GCSI:
The potential for a state government shut-down is real and becomes more imminent by the hour. Should the Governor and Legislative Leaders fail to reach an agreement, the process for a shut-down could begin as soon as tomorrow with full implementation to begin at 12:01 a.m. on Monday. As of Noon today, the Governor and Legislative Leaders have failed to reach an agreement on the FY 2007-08 budget. While the vehicles necessary to avoid a state government shut-down have been positioned (see status below) an actual agreement to avoid the shut-down has yet to be reached.
Status:
House Bill 5194: a bill to amend the Income Tax Act is in Conference Committee and could have been approved the minute a consensus was reached. The bill would then have gone before the respective legislative chambers for an up or down vote as a conference report cannot be amended. The House is expected to discharge the bill from the Conference Committee and again attempt to pass the bill with an increase from the current rate of 3.9% to 4.6%.

House Bill 5104: a bill to amend the Michigan Business Tax to address an issue for publicly traded corporations resulting from guidelines established by Section 109 of the Financial Accounting Standards (FAS) is before the Senate. The bill was tie-barred to the income tax meaning House Bill 5194 would have to be enacted in order for House Bill 5104 to take effect. Senate Bill 687 was discharged from the House Committee on Tax Policy and is presently on the House floor. The bill also addresses the FAS 109 issue but was not tie-barred to the income tax. As such, should the Governor and Legislative Leaders fail to reach an agreement on the income tax, Senate Bill 687 could be passed to fix the FAS 109 issue without an income tax having to be enacted.

Senate Bills 772 and 773: continuation budgets for all state departments and school aid have been discharged to the House floor. These bills would set a continuing budget for the state and for schools respectively at the 2006-07 levels beginning October 1st and continuing through December 31, 2007. The bills could be amended to create a 30, 60 or 90 day window for the negotiations to continue. If enacted, the bills would prevent a government shut-down from taking place.

Budget Bills for Fiscal Year 2007-08 have been zeroed out and referred to their respective conference committees. Should an agreement on revenue, cuts and reforms be reached, the conference committees could meet and approve the individual budgets based on the targets established by the Governor and the Legislative Leaders.

(9-26-07) The conference committee on House Bill 5194, the bill to adjust the state income tax rate, convened at 10:00 this morning. Senators Jelinek (R-Three Oaks), George (R-Kalamazoo) and Prusi (D-Ishpeming) and Reps. Tobocman (D-Detroit), Meisner (D-Ferndale), and Ward (R-Brighton) have recessed at the call of the chair. Should the Senate and House leadership reach an agreement today, the committee can reconvene and report that agreement from the committee, and the bill would then go before both chambers for a straight up or down vote as conference reports cannot be amended. We will be sure to notify you immediately should the leadership agree on a new income tax rate.

(9-25-07)
With the new fiscal year looming, the State Legislature continues to wrangle with how to solve a projected $1.7 billion revenue shortfall for the upcoming Fiscal Year. We expect lawmakers to meet every day until the October 1 start of the new fiscal year. To that end, both the House and the Senate returned to the Capitol to hold rare Sunday sessions.

On Sunday, the Senate passed an omnibus appropriations bill (SB 511 (S-2)) cutting $950 million from the upcoming Fiscal Year 2008 budget. In addition, the Senate returned a slightly modified House Bill 5194, a bill to amend the income tax act, to the House. As expected, the House did not concur with the Senate changes and sent it to a conference committee where it will presumably be postitioned to be used as a vehicle bill to increase the personal income tax rate. As you recall, HB 5194 is the multi-section income tax bill the House left up on the voting board for more than 100 hours two weekends ago trying to garner the necessary votes to increase the personal income tax rate to 4.6 percent to 3.9 percent. Ultimately the increase failed and the House passed the bill to the Senate sans an increase in order to keep discussions going and to meet the Constitutional five-day rule. The five-day rule requires a bill to remain in each chamber a minimum of five days before it can be considered for a final passage vote. The House conferees are: Reps. Tobocman, Meisner and Ward. The Senate Conferees have not yet been named.

On Monday, the Senate passed SB 778, introduced by Sen. John Pappageorge, which extends the current revenue sharing formula until May 31, 2011. The current statute is set to expire on October 1, 2007. Under SB 778, if new money is added to revenue sharing those monies would be distributed through the three-tier formula that was enacted in 1998.

On Sunday, the House passed a number of non-controversial bills to extend fee sunsets into 2008. However, other than to reject the changes to HB 5194 and kick it to a conference committee, a bill to increase the income tax was not taken up. The House also passed House Bill 5104 unopposed the “fix” to the new Michigan Business Tax know as FAS 109. However, HB 5104 was tie-barred to House Bill 5194, the personal income tax bill now in conference committee. This means that the FAS 109 fix can’t be enacted unless House Bill 5194 is also enacted. HB 5194 was not tie-barred to HB 5104.

During Monday’s session, the House passed a number of bills ending sales and use tax exemptions for certain industries totaling about $515 million. The eliminated exemptions include: vending machines, newspapers, magazines, employee meals, aircraft parts, exemptions for water and air pollution equipment, and a host of expemtions for uncollectible debt. House Bills 5252-5256 all passed on straight party-line votes. Additionally, the House passed three bills which would reverse Michigan Supreme Court rulings that the State Treasury lost and would now be required to pay the plaintiffs. Those bills, HBs 5096, 5097 and HB 4882 also passed on a party-line vote.

All parties agree that a government shutdown must be averted. With the Senate acting to return an income tax bill last night, it appears more likely that continuation budgets will be put into place as part of an overall agreement to balance the budget with an income tax increase and budget cuts. Because the final revenue picture is not yet clear, it is very unlikely that the Conference Committees set for the FY ‘08 appropriation bills would be able to get their departmental budget numbers set and agree on the spending line items prior to October 1. Therefore, it is our belief that once the revenue picture is set continuation budgets will be enacted and the normal appropriations process will take the month of October to regroup and enact Fiscsal Year ‘08 budgets. However, if negotiatiations break-down, a one- or two-day shutdown may be inevitable.

The final piece to resolving the upcoming budget are the ongoing discussions to determine what “reform” measures will be enacted to get the Republicans in both chambers to go along with the income tax increase. The Senate and House Republicans have staked out the postition that if a tax increase is to occur, that it must be offset with appropriate “reforms” to government at all levels.

Governor’s Press Release of Friday, September 28, 2007:

The Governor’s office has issued a correction to the press release issued earlier this afternoon regarding the services that will be affected if a state government shutdown does indeed happen. The revised release is below.

FOR IMMEDIATE RELEASE
September 28, 2007
Contact: Liz Boyd
517-335-6397

CORRECTED

Legislative Inaction Forces State Government Shutdown
Granholm details impact to citizens, reiterates call for comprehensive solution

LANSING – Governor Jennifer M. Granholm today said that while she remains committed to protecting the health and safety of Michigan residents during a government shutdown, citizens will be impacted if legislators fail to act before Monday. Granholm made the announcement as she continues to negotiate with state lawmakers who have yet to approve a comprehensive solution to the state’s budget crisis.

“Seven months ago, I proposed a comprehensive solution that would have resolved the state’s budget crisis through a combination of budget cuts, government reforms, and new revenue,” Granholm said. “Since then, the Legislature has failed to agree on my solution or any other. Their failure to act has brought us to this day. They need to act with urgency on a balanced budget and send the bills to my desk.”

The governor has pledged to work with lawmakers as long as it takes to resolve the budget crisis but said that without an agreement, the state must initiate a government shutdown today, since it is the last business day of the current fiscal year. The new fiscal year begins Monday, October 1.

Government shutdown details include, but are not limited to:

AGRICULTURE: All Department of Agriculture activities will stop during a government shutdown, except livestock vehicle inspections at the Mackinac Bridge, which are required to maintain the Upper Peninsula’s Tuberculosis-free designation for cattle. During the shutdown, food safety inspections, recall effectiveness checks, gas pump inspections, animal disease monitoring, and migrant labor camp inspections will stop; agriculture export and cattle movement permits will not be issued; and horse racing will shutdown. Exports from Michigan to foreign countries would essentially cease should state government shut down. Commodities affected include dry beans, logs and lumber, nursery stock, grain, fruits, and vegetables.

THE COURTS: The Michigan Supreme Court and the Court of Appeals will continue to operate with a limited staff to handle emergency matters.

CIVIL RIGHTS: All Department of Civil Rights activities will stop during a government shutdown. Residents wishing to file a discrimination complaint will be able to leave a message at 1-800-482-3604 with the details of their complaint. For purposes of meeting the 180-day legal requirement, the message will constitute an official notice of the intention to file a complaint. Residents calling Civil Right’s Crisis Response Hotline to report a hate crime or bias incident may also leave a message, although they are encouraged to contact local law enforcement for immediate assistance.

COMMUNITY HEALTH: A number of operations within the Department of Community Health will be maintained to ensure that the health of our citizens is protected. State mental health facilities will remain open with reduced staffing, though voluntary, non-court admissions will be suspended. Critical laboratory services will operate to ensure newborn screenings are completed in a timely manner, and threats of immediate harm can be addressed. Limited Medicaid support will be available to approve emergency medical prior-authorizations and review exception requests for medications and medical procedures. The DCH also will maintain the toll-free number to register nursing home complaints of a serious nature.

CORRECTIONS: Department of Corrections functions will continue as needed to protect the safety of Michigan citizens. The state’s prisons, prison camps, and parole/probation monitoring will continue to operate, though at a reduced staffing level. Administrative operations outside of the prisons will shut down.

EDUCATION: All Department of Education operations will shut down, except for the Michigan School for the Deaf. If Department of Education employees have not returned to work by mid-October, the state school aid payment due on October 22 will not be made.

ENVIRONMENTAL QUALITY: The Department of Environmental Quality will maintain only limited staff during the shutdown period to meet U.S. Department of Homeland Security air- monitoring requirements and process critical drinking water samples to address the most immediate public health concerns. All other department functions will shut down. This means no permits (air quality, surface water discharge, wetlands, dredging, etc.) will be processed and no environmental complaints will be received or investigated. The Pollution Emergency Alerting System will be operational, but the department will have extremely limited ability to respond to emergencies reported through that system.

HISTORY, ARTS & LIBRARIES: All Department of History, Arts and Libraries operations will shut down except security and emergency monitoring services at the Mackinac Island Airport and public areas. The Library of Michigan, the Michigan Historical Museum, and historic sites around Michigan will be closed. Mackinac Island paid admission sites will close and garbage and manure pick-up and road maintenance will cease.

HUMAN SERVICES: Critical Department of Human Services’ operations will be maintained to protect the safety of children, families, and vulnerable adults. Most local offices will remain open with a small percentage of field staff on the job to respond to child protective services and adult protective services emergencies; make emergency foster care placements; and process emergency payments for evictions, lack of utilities, lack of food, etc. Cash assistance, food assistance, child day care, adoption subsidies, and foster care payments will continue, but no new applications will be processed (except for emergencies as described above). Child support payments received from non-custodial parents will be sent to families; and the state’s juvenile justice facilities will operate and will be staffed to protect the safety of residents.

INFORMATION TECHNOLOGY: A limited number of Department of Information Technology personnel will be needed to maintain state operating systems and to provide technical support for those services that will continue.

LABOR & ECONOMIC GROWTH: The majority of Department of Labor & Economic Growth operations will be shut down. Most of the Unemployment Insurance Agency will be closed, however, unemployment checks will continue to be processed and new applications can be made over the phone or via the Internet. In addition, the Michigan Career & Technical Institute in Plainwell and the Michigan Commission for the Blind Training Center in Kalamazoo will continue to provide education and training for disabled individuals.

LOTTERY & GAMING: Lottery sales will end at the close of business on September 30, 2007. Players will not be able to purchase or redeem winning tickets. Minimal staff will maintain drawings due to the advance sale of tickets. State gaming inspectors will be idled as well, forcing the state-licensed casinos in Detroit to close.

MANAGEMENT & BUDGET: A limited number of Department of Management and Budget personnel will maintain state-owned buildings.

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY: The Michigan State Housing Development Authority will be closed during shutdown and all operations will stop.

MILITARY & VETERANS AFFAIRS: The MVA State Finance and State Human Resource offices will be closed. The state’s two veterans’ homes in Grand Rapids and Marquette will continue operating with reduced staffing but will maintain the minimum staffing as required by law. The Youth Challenge Program will also remain operational but with minimum staff. Feeding and education will be provided by the Battle Creek Public Schools, an established partner of the Challenge Program. The state’s 44 National Guard armories, six National Guard training sites, and National Guard administrative offices are federally funded and will remain open.

NATURAL RESOURCES: All DNR operations will be shut down, except a minimal crew to maintain the state’s six fish hatcheries and a small contingent of forest firefighters needed to continue containment operations at the Sleeper Lakes fire in the Upper Peninsula and to respond to other fire emergencies. Shutdown will require that all state parks, recreation areas, DNR visitor centers and state forest campgrounds be closed, including day use areas. Citizens with camping reservations at a state park or recreation area during the duration of the shutdown will be eligible for a refund. The sale of hunting and fishing licenses may be delayed if technical problems with the state server prevent processing, and gated boat access sites will not be accessible. In addition, timber will not be marked for sale or sold. The archery deer season set to open on October 1 will proceed, however, deer check stations will not be operating.

SECRETARY OF STATE: Secretary of State Terri Lynn Land has indicated that branch offices will be closed during the shutdown. Online or mail transactions will not be processed, as well.

STATE POLICE: The Michigan State Police will continue to protect Michigan citizens during shutdown. Though all MSP posts will be closed to the public, a limited number of troopers will be maintained to provide critical law enforcement services across the state. Administrative and specialized operations will be curtailed, resulting in the cessation of crime lab services, commercial vehicle enforcement, drug and criminal investigations, detective services, disaster assistance, and casino gaming oversight.

TRANSPORTATION: All road construction, routine maintenance, and administrative operations will stop. The state’s rest areas will be closed. In addition, six of the state’s lift bridges, in compliance with U.S. Coast Guard regulations, will be locked in the up position, allowing only water traffic to pass. Those bridges are located in Manistee, Bay City, St Joseph, Port Huron and Detroit. The Mackinac Bridge, the International Bridge, and Blue Water Bridge will remain operational.

TREASURY: Department of Treasury operations, including student loan disbursements and financial aid payments, the Michigan Education Trust, and the Michigan Education Savings Plan programs would cease during a shutdown. Revenue sharing payments to local units of government will be delayed if the shutdown continues through mid-October. A limited number of staff would be maintained to process critical payments, including cash assistance, unemployment benefits, and debt service.

With a limited July and August work calendar, it is difficult to see how the Legislature will complete any of the remaining budget issues prior to Labor Day. The next big deadline is October 1, the start of the new fiscal year.

The Legislature proposed meeting throughout the Summer to work on the upcoming fiscal year budgets and released calendars indicating regular three-day session weeks the remainder of July and session every Wednesday throughout August. However, not much was accomplished the last few weeks of July and the House cancelled the August 1 session day signaling to us that those last few days in September are going to be very long indeed.

On the ‘08 FY budget side of things, the House has been passing their first-house budgets to the Senate. However, the Senate Majority Leader blasted the House Democrats for passing budgets predicated on a $1.5 billion tax increase for which the House has not yet acted on. Meanwhile, the Senate has yet to pass a single Senate-originated budget bill—all are on the Senate floor awaiting full-Senate action, including the 07-08 Transportation budget. This slower than usual pace also leads us to predict final resolution occurring in the waning days of September—not August. There has also been talk of continuation budgets which indicate that resolution could be put off until October or November—after the beginning of the new fiscal year!

Nothing has happened on the revenue enhancement side of things yet either. On several occasions, the Senate Majority Leader has indicated that any tax increase must be passed by the House first. Most indications are that the House Democrats will pass an income tax increase from the current rate of 3.9 percent. Each one-tenth of a percent nets approximately $180 to $200 million for the state general fund. Recent estimates peg the 07-08 FY deficit at anywhere from $1.2 billion to $1.8 billion. The income tax rate could be increased statutorily to any amount (4.6 percent is the historical high). However, any effort to create a graduated income tax would require a constitutional change and thus, a vote of the people. Rumors abound that the House Democrats will propose a retro-active tax increase and tie-bar it to a joint resolution placing a graduated income tax proposal before the voters this November. However, in order for this to appear on the November ballot, it would need to pass both Chambers in August. If a plan is placed before the voters, the February Presidential Primary would be the next opportunity. There is also much talk of expanding the sales tax base to incorporate a “luxury” tax on services such as tickets to sporting events and concerts among other things. As of yet, neither body has moved on a broad tax hike.

The Senate Appropriations Committee reported a number of bills necessary to implement pieces of the ‘07 budget agreement, including Senate Bill 656. SB 656 (S-1) amends the General Sales Tax Act permitting $10.2 million dollars to be skimmed from the CTF by redirecting it from the auto-related sales tax revenue to the State general fund. The bill implements two pieces of the agreement. First, it addresses the Governor’s Executive Order 2007-03 which redirects $5 million from the CTF to the general fund by cutting $4 million from the bus capital line and $500,000 each from the rail infrastructure loan and the freight preservation and development lines. The remaining $5.2 million reflects the agreement to transfer funds set aside within the CTF for the Soo Locks expansion matching funds to the State general fund. This portion of the agreement is contained within Public Act 17 of 2007.

(Legislative Update prepared by Bill Zaagman and Don VanSingel of Governmental Consultant Services, Inc., MPTA’s state lobbyists.)

There are no Legislative Updates at this time.