|
MAFF
position adopted: state tax reduction delayed
MAFF
keeps its members and other fire service professionals
"in the loop" regarding legislation that affects
fire fighters via this ongoing column in Flashpoint.
The information is provide by Karoub Associates, the
union's Lansing-based legislative liaison firm, which
has been recognized for decades as a leader in its highly
specialized field.
Not
long after the Michigan Association of Fire Fighters
publicly proclaimed its position on Governor Granholm's
then-pending budget executive order, that stance was
adopted as part of a compromise deal - announced Dec.
18 - to erase Michigan's $920-million deficit.
MAFF
had issued a press release Dec. 9 endorsing legislative
action to freeze a scheduled upcoming state income tax
cut in order to minimize the revenue sharing cuts. The
press release stated that going through with the reduction
at the start of 2004 could lead to layoffs of fire fighters
across the state. While it is doubtful that the possibility
of some layoffs in some municipalities has been totally
erased by a six-month delay of the tax decrease, the
action does significantly reduce the level of financial
pressure they otherwise would have faced.
The
Governor had issued a 5 percent cut to revenue sharing
in her Executive Order (EO) 2003-23 presented Dec. 10
by State Budget Director Mary Lannoye to the joint House
and Senate Appropriations Committee. This cut was reduced
from 6 percent through an anticipated $77 million in
funding coming from the income tax rollback.
The
EO represented a compromise reached by Governor Granholm
and Senator Ken Sikkema (R-Grandville). The Senate had
passed Senate Bill 852, the six-month pause for the
income tax rollback (4.0 percent to 3.9 percent), just
before Director Lannoye revealed the order. The final
compromise achieved a balanced budget, and there are
hopes that an economic recovery will negate the need
for further budget cuts during 2004.
The
$77 million in revenues raised through the pause are
divided between K-12 public schools ($45.5 million),
higher education and revenue sharing. It is estimated
that this overall solution will drop the peroration
from $196 per pupil to approximately $90-$100 per pupil.
Instead of a five-year phase out of health care costs
in the base of a corporation's single business tax (SBT)
liability, the Senate Bill 852 calls for a partial two-year
phase-down that will reduce the health care SBT obligation
by 40 percent. That provision will begin in 2005. The
House Bills are currently in House Tax Policy Committee.
Other items contained in the reduction strategy include
the following:
•
|
$82.5
million in general fund administrative savings for
Executive Branch agencies, including $18.9 million
from the Department of Corrections; |
•
|
A
5 percent reduction in spending to universities
($73.1 million) and community colleges ($12.4 million)
with a 3 percent restoration if they agree to hold
any tuition increases to the rate of inflation; |
•
|
A
5 percent reduction, originally proposed at 6 percent,
in state revenue sharing dollars which totals
$70.5 million; |
•
|
A
shift in the final fiscal year 2004 Merit Scholarship
payment into the next fiscal year that will save
the state approximately $63 million while continuing
scholarships to eligible students; |
•
|
Administrative
savings in both the Judiciary and Legislative branches
which equal $1.1 million and $1.2 million, respectively
(a negative supplemental must be passed by the legislature
for this to occur). |
It
has been a pleasure for Karoub Associates to partner
with MAFF, and we look forward to helping you in the
future with matters of legislative interest.
|
archives