MORNING UPDATE:
SBT deal done. It’s a deal that would have looked much different if we had a Republican Governor and a Republican House.
It was 2 against 1 in the negotiations, but Republicans held it to no more than “revenue neutral” and made it more “fair” to small business. With a Democrat Governor and Democrat House…we probably got the best deal we could.
Another reason to vote Republican…compromise isn’t always easy.
2007 budget near closing the books…work begins on 2008 as Republicans demand reforms. Democrats are pushing to raise taxes…income taxes, sales taxes and other revenue enhancements.
Democrats using threats, blackmail and coercion to try and find some Republican votes for tax increases.
We don’t need to cut state government per se, we need to reform the way we deliver services. We can save hundreds of millions of taxpayer dollars…we need to address the “structural” spending problems.
Friends don’t let friends raise taxes!
Here are two scary articles about the challenges Michigan is facing. I hope folks are paying attention?
http://migop.blogs.com/blog/2007/06/scary_stuffi_ho.html
http://migop.blogs.com/blog/2007/06/prevailing_wage.html
Karl Rove is coming to Marquette County, Saturday June 23rd. County and District GOP excited, talk about taking out former “blue dog” Democrat Bart Stupak who is now part of San Francisco liberal Nancy Pelosi’s team. Tom Casperson is the talk of the town!
THE REST OF THE STORY:
- SBT tax replacement negotiations were very tough and started from very different perspectives. Republicans argued for a “net cut” in taxes to help stimulate economic growth while avoiding picking “winners and losers”.
Outnumbered by the Democrats, with the Governor and House having a 2:1 advantage, Republicans worked hard to keep the tax as broad based and fair as possible. This is NOT the deal Republicans would have cut.
I find it ironic that we shifted a greater tax burden to successful enterprises in Michigan who are creating jobs, such as banks, insurance companies and real estate. So if you create jobs and are successful, the Democrats tax you? Again, not something a Republican majority would have done.
- Michigan Business Tax Agreement Summary - June 13, 2007
Revenue Replacement
Revenue neutral—rates will be calculated to reflect provisions below
Tax Base
2/3 margins tax (sales less purchases of tangible property from other firms)B
1/3 business income
Capital stock tax for banks
Increase insurance premiums tax to 1.25%, plus credits Business income tax rate: 4.84 % Margins tax: 0.764%
Personal Property Tax Relief
12 mills for commercial personal property
24 mills for industrial personal property 35% refundable credit on remaining industrial personal property Telephone credit corresponding to commercial personal property
Credits
Investment and compensation credits capped at 65% of liability R&D credit capped at 75% of liability
ME-2 Entrepreneurial credit
Small Business Treatment (Cost: $120 million)
Allow qualifying firms to pay a 1.8% tax on adjusted business income Increase officer compensation disqualifiers to $160,000 to $180,000 Increase gross receipts threshold phase-out to $18-20 million Increase aggregate business income disqualifier to $1.3 million Allow flow-through entities to access the compensation credit
Revenue Trigger
Year 1: 5% over FY 08 base
Years 2 and 3: Growth over personal income + 1%
FY08 base reflects revenue neutral SBT yield plus personal property tax millage reductions, excluding insurance Half of overage refunded to business taxpayers; half deposited into to BSF Trigger provision sunsets after 3 years
- Now for the next step. We have replaced the SBT with a compromise package between the House, Senate and Governor’s office. This isn’t the tax cut we had proposed or hoped for, but with the Democrats controlling the Governorship and the House, we got the best deal we could.
The Democrats are pushing for a number of different tax increases. They have floated many proposals, none of which they have been able to put up enough votes for. So a Democrat proposal without any votes or even a bill, is little more than political rhetoric.
The Democrats are desperately trying to find some Republican votes to make this work. So far ALL the Republicans are holding tough. Republicans are demanding serious structural reforms before we even start talking about a tax increase of any kind.
The Democrats argue that voting for a tax increase is hard and the “right” thing to do? In whose book???
The hard choices are dealing with a run away bureaucracy, renegotiating legacy costs, considering privatizing services that should be private and dealing with the special interests that try and control both the legislative process and the Governors office.
We need “real” change and that means “real”, tough decisions have to be made. Raising taxes is the easy way out. It means you ignore the bad spending habits of a government that redistributes over $41,500,000,000 of Michigan taxpayer dollars….not some far away government entity….it’s us folks…real people….real taxpayers….who are getting stuck with the bill.
Yes, we have to negotiate…because misguided voters gave the Governor and a Democrat House of Representatives the power to “share” in the responsibility to create good public policy. We are not going to be able to do it “our” way. We are NOT going to have the leadership required to make the tough choices. But we can do our best representing the taxpayers.
I repeat…friends don’t let friends raise taxes!!!
Don’t blame me folks…I voted for DeVos….I voted Republican.
- Democrats also have started to use blackmail and threats to try and find Republican votes for their planned tax increases. Senators and Representatives are being threatened with losing funding for projects and public institutions in their districts.
Democrats are stooping to new lows. In the 30 years I have observed or been part of this process, I have witnessed folks being “bought off” but not blackmailed and/or the public blackballed for their legislators voting on their principle. Democrats are crossing the line and you should call your Senator and Representatives and urge them to stand strong!
No government has ever taxed themselves out of a recession…ever.
- The “Architect” Deputy Chief of Staff Karl Rove is coming to Michigan. I’ve had an opportunity to talk to him about the changing demographics in northern Michigan, Congressman Bart Stupak’s rumors about lobbying and running for Governor, term limited state representative Tom Casperson and the need to help move our party forward up north.
From the day he was elected, Joel Westrom has been hounding me to get a top political speaker to the U.P. The party is excited about it’s prospects and wants to put a national spotlight on their folks.
If you’re in the U.P. on June 23rd….join the Marquette County GOP in welcoming Karl Rove to Michigan!
Marquette County Republican Party
Reagan Day Dinner 2007with Special Guest
Karl Rove
Presidential Advisor
Saturday, June 23, 2007
Roundtable Discussion
5:30 pm - 6:30 pm
Reagan Day Dinner
6:30 pm
Holiday Inn
Marquette, Michigan
Please RSVP by June 18th, 2007
For more info call 906.360.0020 or joel@marquetteGOP.com
Saul Anuzis
STATE STORIES
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070614/POLITICS/706140408/1022
Thursday, June 14, 2007
Lansing hammers out tax overhaul
72% of businesses to get relief; manufacturers win
Mark Hornbeck and Gary Heinlein / Detroit News Lansing Bureau
LANSING -- State leaders at long last reached agreement Wednesday on a replacement for Michigan's despised and expiring $1.9 billion Single Business Tax that raises the same amount of money for the state as the old version but provides tax relief to about three-quarters of state businesses.
The so-called Michigan Business Tax, which is intended to go on the books in January, taxes a company's sales and profits, slashes by nearly two-thirds the levy on business equipment and machinery, and allows credits for investment, job creation, and research and development done in the state.
http://www.freep.com/apps/pbcs.dll/article?AID=/20070614/NEWS06/706140357/1008
At last, state has business tax deal
Granholm, lawmakers agree
June 14, 2007
LANSING -- A landmark agreement Wednesday to overhaul Michigan's business tax would reduce taxes for nearly three-fourths of employers who pay -- especially large manufacturers -- and make the state more inviting to entrepreneurs and small businesses, the plan's architects said.
Gov. Jennifer Granholm and leaders of the House and Senate announced the bipartisan deal after weeks of grinding negotiations. The plan will have to clear both the House and Senate, and its approval by bipartisan legislative leaders and Granholm could assure passage.
http://www.mlive.com/news/statewide/index.ssf?/base/news-8/118177980894110.xml&coll=1
Finally -- agreement on biz tax
Wednesday, June 13, 2007
By Peter Luke
Lansing Bureau
LANSING -- After months of indecision that may have hurt Michigan's jobs climate, Gov. Jennifer Granholm and top lawmakers have reached a deal on replacing the state's 30-year-old Single Business Tax.
The new tax that takes effect on Jan. 1 would provide certainty for business, stability for the state budget and lucrative new investment incentives for an economy struggling to recover, Granholm said Wednesday after she, House Speaker Andy Dillon, D-Redford Twp. and Senate Majority Leader Michael Bishop, R-Rochester concluded negotiations.
"Michigan can send a message across the country that we have a business tax that is competitive and will make a business case to a business choosing to locate in our state," Granholm said.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070614/OPINION01/706140312/1008
Thursday, June 14, 2007
Editorial
Revisit biz tax deal after government reform
The Detroit News
The business tax deal announced in Lansing must not end the work of making Michigan's tax structure more competitive for 21st-century jobs.
The full impact of the new tax on various businesses will take more analysis, but the state's major business groups express hope that it will be a vast improvement over the hated Single Business Tax it replaces.
The ability of Gov. Jennifer Granholm, House Democrats and Senate Republicans to craft a deal that at least initially draws praise from those it most affects is a good sign that conditions are improving in Lansing.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070614/POLITICS/706140403/1022
Thursday, June 14, 2007
Budget talks: Lots of finger pointing, no solution
State GOP, Democratic leaders accuse each other of blackmail in debate of tax hikes, spending cuts.
Gary Heinlein / Detroit News Lansing Bureau
LANSING -- The battle over tax hikes and the 2008 state budget heated up Wednesday with Republicans and Democrats accusing each other of bare-knuckle politics and blackmail.
Republican representatives said House Democrats have threatened to reduce state funds for schools and colleges in their districts, including Central Michigan University, Macomb Community College and St. Clair Community College, unless Republicans support higher taxes.
The key question over the state's $1.8 billion budget problem for next year is whether taxes should be boosted or spending reduced further. Gov. Jennifer Granholm and her fellow Democrats propose raising the income tax -- from the current 3.9 percent to 4.4 percent or 4.6 percent -- or imposing a new tax on services and entertainment that aren't now taxed, such as sports tickets and spa treatments. Or both.
http://www.freep.com/apps/pbcs.dll/article?AID=/20070614/NEWS06/706140358/1008
Deficit is a nagging question
New taxes yet to be debated
June 14, 2007
LANSING -- Two down and one to go.
With Wednesday's compromise on a new business tax, Gov. Jennifer Granholm and the Legislature plugged a big hole in Michigan's leaky budget boat. The new business tax would produce for the general fund about the same revenue as the current Single Business Tax, about $1.9 billion a year.
But it won't erase a remaining deficit heading into next fiscal year that's estimated at $1.6 billion or more.
Still looming is a decision by lawmakers on whether -- and how -- to raise the state income tax, or to impose a sales tax on entertainment such as concert and sports events tickets and golf and ski fees.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070614/OPINION01/706140314/1008
Thursday, June 14, 2007
Editorial
Reform sentencing to cut prison costs
The Detroit News
Prisons are absolutely necessary for public safety, but prison beds are an expensive resource. Michigan is not managing this resource well.
It costs more to incarcerate a prisoner in Michigan than in any other state in the Midwest, according to a recent Senate Fiscal Agency analysis. And the financial burden of jailing prisoners has increased dramatically in the last two decades.
In the 1988 budget year, state Corrections Department spending accounted for 8.5 percent of the general fund. In the governor's proposed 2008 budget, prison spending, at $1.9 billion, amounts to 20 percent of the general fund budget.
http://www.candgnews.com/Homepage-Articles/2007/6-13-07/XF-TOWNSHIPS.asp
Are township governments at stake?
State Democrat sponsoring bill to eliminate township authority
By Erin McClary
C & G Staff Writer
A state legislator is proposing legislation that, if passed, would essentially abolish township governments in Michigan.
If the proposed House Bill No. 4780 is passed, 1,175 of Michigan’s 1,242 townships will have to fork over their governing privileges to surrounding counties come December of 2008.
On May 17, state Rep. Paul Condino, D-Southfield, sponsored the bill, better known as the “township services consolidation act,” slating that townships’ duties of assessing property, collecting taxes, conducting elections, and providing fire and police services will be turned over to local counties in an effort to pull Michigan from its fiscal crisis.
Members of the Michigan Townships Association and local township supervisors “stridently” oppose the idea.
http://www.mlive.com/news/chronicle/index.ssf?/base/news-1/1181745961183100.xml&coll=8
Term limits law is the disease that ails Legislature
Wednesday, June 13, 2007
If only we had a nickel for every politician and public official who has trooped through our offices over the years to admit we were right to so vehemently oppose the lamentable term limits amendment to the Michigan constitution, approved back in 1992. Chief Judge of the Michigan Court of Appeals William C. Whitbeck is only the latest.
Whitbeck's efficient operation of the state's middle-level judicial body is just one of many state agencies facing the grim reality of a new round of budget cuts. "Here's what the budget crisis means to the judiciary in general and to the Court of Appeals, on which I sit, in particular," Whitbeck told our editors in a recent face-to-face visit.
"It means failure. And that failure will have consequences."
http://www.freep.com/apps/pbcs.dll/article?AID=/20070614/NEWS05/706140376/1007
School districts question graduation-rate findings
June 14, 2007
Detroit Public Schools isn't the only district in Michigan challenging a study released Tuesday that showed high school graduation rates are much lower than what the state reports.
Several districts said the rates reported by the research center at Editorial Projects in Education, a Bethesda, Md., nonprofit that publishes Education Week, are inaccurate and misleading.
The agency had said Tuesday that the formula it uses for calculating graduation rates is a more accurate reflection of how many students fail to graduate on time than what most states -- including Michigan -- use.
http://www.mlive.com/news/annarbornews/index.ssf?/base/news-23/1181745676162700.xml&coll=2
School millage support urged
Trustee says Ann Arbor district key to county passage
Wednesday, June 13, 2007
BY DAVID JESSE
News Staff Reporter
The fate of a countywide enhancement millage for local schools rides on the shoulders of Ann Arbor school district voters, a school board member said Tuesday.
"If we enthusiastically and overwhelmingly support a countywide enhancement millage, it will pass, period,'' Glenn Nelson told a group of about 50 parents gathered to talk about district finances.
Putting an enhancement millage on the ballot would bring money to every school district in the county. It would have to be approved in a countywide election.
http://www.mlive.com/news/grpress/index.ssf?/base/news-2/11817426383390.xml&coll=6
Head games
Wednesday, June 13, 2007
Afew motorcyclists want to take the rest of Michigan's residents for an expensive ride by overturning the state's mandatory helmet law.
The idea is wrong-headed, in an all-too-familiar way. Allowing people to ride without helmets costs both lives and money. Similar bills return to the Legislature on a near-yearly basis. Too many West Michigan lawmakers will support the repeal out of a misguided belief that the right of motorcyclists to feel the wind in their hair, and put their lives in danger, is somehow in the same category as the right to life, liberty and the pursuit of happiness.
Smarter heads will prevail, this year, anyway. Gov. Jennifer Granholm has promised a veto. A larger concern, however, is how the no-helmet types seem determined not to let up until they win. The well-organized strategy has been to keep the issue before lawmakers in hopes that persistence will pay off.
http://www.freep.com/apps/pbcs.dll/article?AID=/20070613/NEWS01/70613043/1003
Former border inspector pleads guilty to alien smuggling charges
June 13, 2007
A former U.S. border inspector pleaded guilty Wednesday to alien smuggling charges.
Adam Bender, 49, of Eastpointe pleaded guilty before U.S. District Judge Robert Cleland and faces up to 5 years in prison and a $250,000 fine at sentencing Oct. 11.
“He was a dupe,” his lawyer, Marc Lakin of Birmingham, said Wednesday.
He said a co-defendant, Hassan Saad, 35, of Detroit, a roofing and home improvement contractor, befriended Bender and his family and exploited the relationship to smuggle friends and relatives into the U.S. for a profit. Lakin said Bender would wave through immigrants at the bridge and tunnel in Detroit, based on Saad’s word that they were legal.
http://www.freep.com/apps/pbcs.dll/article?AID=/20070613/NEWS06/70613037/1008/NEWS06
House Democrats' legislation addresses human trafficking
June 13, 2007
LANSING -- Modern-day slave traffickers are the target of legislation by House Democrats who say local and state authorities have too little power to prosecute those who force thousands of men, women and children into servitude.
A package of bills would add human trafficking to Michigan's racketeering statute, which would allow authorities to pursue organized slave traders and those who bankroll them.
The legislation also would allow seizure of assets of those convicted, and force them to pay their victims in lost wages and other compensation.
http://www.mlive.com/news/annarbornews/index.ssf?/base/news-4/1181745719162700.xml&coll=2
Recall targets 4 on Ypsilanti council
At issue is their vote on debt refinancing for Water Street project
Wednesday, June 13, 2007
BY KHALIL E. HACHEM
News Staff Reporter
Three Ypsilanti residents filed petitions to recall four City Council members for voting last year to refinance about $13 million in debt at a cost of $3 million before the city signed a development agreement to build the Water Street project.
Ted Mull filed a petition to recall Brian Filipiak, D-Ward 3. Robert Kilpatrick filed to recall council members John Gawlas and Bill Nickels, both D-Ward 2, and Rodney Nanney filed to recall Mayor Pro Tem Trudy Swanson, D-Ward 1.
The council includes a mayor and six council members, two from each of the city's three wards.
http://www.mlive.com/news/saginawnews/index.ssf?/base/news-23/1181744477114140.xml&coll=9
Swindled treasurer in prison
Wednesday, June 13, 2007
JOHN FLESHER
THE ASSOCIATED PRESS
HARRISVILLE -- Alcona County's former treasurer will serve from nine to 14 years in prison for embezzling county funds that he lost in phony Nigerian investments.
Thomas A. Katona learned his sentence Tuesday from 23rd Circuit Judge William F. Myles. Katona, treasurer from 1993 to 2006, pleaded guilty to embezzlement and forgery in May.
State police said Katona authorized wire transfers totaling $186,500 last summer to bank accounts in Taiwan and England linked to a notorious Nigerian scam. One transaction, for $35,000, didn't go through because of an erroneous routing code.
http://www.mlive.com/news/bctimes/index.ssf?/base/news-9/1181747738262290.xml&coll=4
Former Alcona treasurer sentenced to 9-14 years
Wednesday, June 13, 2007
By ERIC ENGLISH
TIMES WRITER
HARRISVILLE - By the time his Nigerian investment scheme came crashing down last year, former Alcona County Treasurer Thomas A. Katona cost his rural county more than $1.2 million, auditors believe.
On Tuesday, Katona learned the crimes he committed in office while pursuing a phantom payoff had their own price - more than nine years of hard time.
Katona, 56, asked for forgiveness moments before his sentencing on felony embezzlement and forgery charges in 23rd Circuit Court.
http://www.mlive.com/news/citpat/index.ssf?/base/news-21/118174350672980.xml&coll=3
City leaders' homes raided
Wednesday, June 13, 2007
By Danielle Quisenberry
dquisenberry@citpat.com -- 768-4929
and Steven Hepker shepker@citpat.com -- 768-4923
A drug team on Tuesday seized suspected marijuana from the houses of brother-and-sister Jackson City Council members Sarah Mead and William Mure.
Mead confirmed the Jackson Narcotics Enforcement Team searched her home at 710 Center St. in the afternoon and found marijuana.
Mead, 36, who was elected in November 2003 to represent the 4th Ward, said the marijuana was for her personal use.
http://www.mlive.com/news/flintjournal/index.ssf?/base/news-44/118174290820970.xml&coll=5
Another mayoral forum planned for July 19
Hometown Headlines
FLINT
THE FLINT JOURNAL FIRST EDITION
Wednesday, June 13, 2007
By Marjory Raymer
Journal Staff Writer
Residents will have another chance to hear what the candidates for Flint mayor have to say at a forum less than three weeks before the primary.
The public is invited to attend the forum at 5:30 p.m. July 19 at UAW Local 651, 3518 Longway Blvd. in Flint.
The event will be hosted by the Genesee County Democratic Party, Genesee County Democratic Black Caucus, Genesee County Democratic Hispanic Caucus and UAW Local 651.
http://www.mlive.com/news/kzgazette/index.ssf?/base/columns-3/1181748263281660.xml&coll=7
The Great Lakes:Protect 'em or lose 'em
Wednesday, June 13, 2007
It was only 10 years ago that Michigan residents were fretting about the high water level of the Great Lakes.
Waves were lapping at the shoreline, eating away at bluffs and causing buildings at the waters' edge to topple into the lakes.
It was a cyclical problem, scientists said. The levels of the Great Lakes rise and fall in 30-year cycles. They're in the process of falling again.
http://www.mlive.com/news/bctimes/index.ssf?/base/news-1/1181747730262290.xml&coll=4
Michiganders' burden of greenhouse gas is lighter than you'd think
Wednesday, June 13, 2007
Michigan isn't one of the bad boys in the global warming debate.
An Associated Press review of U.S. Department of Energy records showed that in 2003, Michigan ranked 30th among the states in per-capita emissions of the major greenhouse gas, carbon dioxide.
That's a surprising showing for the home of the automobile industry, in the industrial heartland of the Midwest, for a northern state with massive heating requirements each winter.
http://www.mlive.com/news/kzgazette/index.ssf?/base/columns-3/1181748278281660.xml&coll=7
Create incentives for more renewable energy
Wednesday, June 13, 2007
Wind-generated electricity isn't likely to replace coal- or nuclear-generated power in Michigan, not soon, not ever.
But with the wind that whips off of the Great Lakes, there's potential for wind farms to someday provide enough energy to lessen the need for burning more fossil fuels to create electricity.
On Monday, Gov. Jennifer Granholm and representatives of the Wolverine Power Cooperative and John Deere Wind Energy announced the construction of a wind turbine complex in Huron County, in Michigan's Thumb, that will be able to power up to 15,000 homes.
http://www.mlive.com/news/bctimes/index.ssf?/base/news-1/1181747818262290.xml&coll=4
Don't risk your life for a few more miles per gallon of gasoline
Wednesday, June 13, 2007
There's a new name for an old game of squeezing as many miles as possible out of each gallon of gasoline.
Hypermilers may drive newfangled hybrid cars, but they rely on decades-old folklore to get their miles per gallon to soar.
They coast to red lights and over-inflate their tires. They avoid traffic and jackrabbit starts.
Some may even ''draft'' trucks.
Supposedly, the mileage you can get in the low-pressure zone that's 10-15 feet behind a big truck is astounding.
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/13/AR2007061302225.html
Senators Try to Limit Fuel-Efficiency Rules
Washington Post Staff Writer
Thursday, June 14, 2007; Page D01
Allies of the U.S. auto industry stepped up a campaign yesterday to soften strict vehicle fuel-efficiency mandates in proposed energy legislation before the Senate, even as momentum for the tougher measures continued to build.
Sens. Carl M. Levin and Debbie Stabenow, the two Democrats from Michigan, and Christopher S. Bond (R-Mo.) are leading the effort to craft an amendment that opponents say would water down measures already approved by the Senate Commerce Committee.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070614/POLITICS/706140335/1022
Thursday, June 14, 2007
Support builds for Levin's fuel bill
Automakers back Michigan senator's compromise fuel economy standards.
David Shepardson / Detroit News Washington Bureau
WASHINGTON -- Detroit auto executives went to Capitol Hill Wednesday to urge undecided lawmakers to support a compromise fuel economy proposal by Michigan Democrat Sen. Carl Levin and others that would increase standards but not as drastically as a bill being debated on the Senate floor.
Troy Clarke, president of General Motors Corp.'s North America unit, and Beth Lowery, the automaker's vice president for energy policy, are seeing more than a dozen senators and representatives in meetings Wednesday and today.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070614/OPINION01/706140305/1008
Thursday, June 14, 2007
Opinion
Innovation, not regulation, will improve fuel economy
U.S. Rep. Mike Rogers
American-built cars and trucks powered by renewable U.S.-made energy is not the impossible dream but a growing possibility based on automakers' innovation, not big government regulation.
Detroit is looking to the future while some in Washington, D.C., are looking to the past and a 1970s law created when families drove station wagons with carburetors and eight-track tape players. These fuel economy standards have failed us. They were supposed to reduce our dependence on foreign oil. Thirty years later, U.S. consumption of foreign oil is at a record high, and American auto jobs are disappearing.
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/13/AR2007061301939.html
The Senate Energy Bill
Ignoring the 800-pound gorilla in the room
Thursday, June 14, 2007; Page A26
GIVEN THE alternative of doing nothing about global warming -- which President Bush and the Republican-led Congress excelled at for the past six years -- the flurry of activity on climate change in Washington is welcome. President Bush at least agreed at the recent Group of Eight summit in Germany to international talks on the topic, and the Democratic-led Senate is debating an energy bill designed in part to limit greenhouse gas emissions. But here's the problem with the latter: Nowhere in its 277 pages does the legislation even entertain the notion of incentives to curb greenhouse gas emissions, through a carbon tax or a cap-and-trade system or both.
There are useful provisions in the Senate bill, as well as some areas of concern. The drive for greater efficiency, with the federal government taking the lead, is good. For instance, the fleet of federal vehicles would have to reduce petroleum consumption by 20 percent by October 2015, and "all general-purpose lighting" in federal buildings would be switched to Energy Star products. The bill would push for the use of 36 billion gallons of renewable fuels in vehicles by 2022, and there would be an emphasis on creating that renewable fuel from plant material other than corn, such as switch grass, and from waste materials, such as crop residue and animal waste.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070614/POLITICS/706140303/1022
Thursday, June 14, 2007
Clinton to return for canceled Detroit fundraiser
The Detroit News
DETROIT -- Missed Bill Clinton? Don't fret. He's coming back, say organizers of a fundraiser canceled Tuesday because severe weather prevented the former president's plane from leaving New York.
The event at the Max M. Fisher Music Center, which was to benefit the YES Foundation, an at-risk youth literacy group, probably will be rescheduled sometime in September, said Alexis Bourkoulas, a spokeswoman for African American Family Magazine, the fundraiser's producer.
http://www.freep.com/apps/pbcs.dll/article?AID=/20070613/NEWS01/70613023/1003
Presidential hopeful John Edwards to appear Thursday in Detroit
June 13, 2007
Presidential hopeful John Edwards will travel to Detroit to talk Thursday about his plans for universal health care.
The former Democratic Senator from North Carolina will be at the East Riverside Health Center in Detroit at 9:30 a.m. to discuss the cost-savings measures in his health plan.
His plan calls for businesses to either provide insurance coverage for employees or contribute to the cost of employees' own health care plans.
He also would require individuals to get health care coverage, whether it is from an employer, a government program, or through regionally based health care markets.
It will be Edwards' second visit to Michigan in the last three months.
http://www.freep.com/apps/pbcs.dll/article?AID=/20070614/NEWS06/706140427/1008
Troops' kin tuition to be paid
June 14, 2007
Starting in the 2008-09 school year, Grand Valley State University will offer free tuition to the spouse or children of western Michigan service members who died serving in Iraq or Afghanistan through the Fallen Heroes Foundation scholarship program.
"This is a way that we could give back to those that have served us in uniform in Afghanistan and Iraq and have given their lives to protect what we have here in this nation," Grand Valley President Thomas J. Haas said Wednesday.
NATIONAL STORIES
http://thehill.com/leading-the-news/sen.-mccain-hits-harder-2007-06-14.html
Sen. McCain hits harder
June 14, 2007
White House hopeful Sen. John McCain (R-Ariz.) yesterday adjusted his campaign tactics, aiming withering fire at his rivals in an apparent effort to mute recent stories that his campaign is in trouble.
Campaign officials issued a statement attacking GOP rival ex-Gov. Mitt Romney (Mass.) for changing his position on abortion. McCain also called a press conference to attack Sen. Hillary Rodham Clinton (N.Y.), the Democratic frontrunner.
http://www.newsmax.com/archives/ic/2007/6/13/201148.shtml
Wednesday, June 13, 2007 8:10 p.m. EDT
McCain Strikes Hillary Clinton's Pork Projects
Republican presidential candidate John McCain said Wednesday he will try to squash nearly $150 million in proposed defense spending backed by Democratic rival Hillary Rodham Clinton, calling the projects wasteful and unneeded by the military.
Speaking to reporters outside a downtown fundraiser, the Arizona senator said Clinton larded a Senate bill with a lineup of "pork-barrel" proposals that would drain funds needed to shore up armed forces arrayed around the globe.
http://www.lifenews.com/nat3186.html
John McCain Criticizes Mitt Romney on Abortion, Saying He’s Not Fully Pro-Life
by Steven Ertelt
LifeNews.com Editor
June 14, 2007
Washington, DC (LifeNews.com) -- Seeing his polling numbers decline and not obtaining much in the way of support from the pro-life community, Sen. John McCain is going after former Massachusetts Gov. Mitt Romney, who is seeing is numbers rise in top primary states. McCain’s campaign disseminated a video showing Romney saying he would uphold the state’s abortion laws.
McCain’s campaign is hoping to use Romney’s image in some circles as a candidate who flip-flops on various key political issues to assail him on abortion.
http://www.chron.com/disp/story.mpl/politics/4888309.html
Former N.Y. senator snubs Giuliani, backs Thompson
By BETH FOUHY
Associated Press
NEW YORK — A former Republican senator from Rudy Giuliani's home state says he is unhappy with the GOP presidential field and is backing Fred Thompson, who hasn't officially entered the race.
Sen. Alfonse D'Amato announced he is supporting his former Senate colleague, an actor-politician who has formed a presidential exploratory committee and is expected to launch a campaign this summer.
http://www.newsmax.com/archives/ic/2007/6/13/201741.shtml
Wednesday, June 13, 2007 8:12 p.m. EDT
NBC Poll: Fred Thompson's Strong Showing
A new NBC/Wall Street Journal Poll released Wednesday night finds that Republican Rudy Giuliani and Democrat Hillary Clinton remain their party’s respective frontrunners.
But the latest trends show Hillary’s position strengthening as John Edwards appears to be slipping, dropping some 5 points since the last NBC poll.
On the GOP side, former Senator Fred Thompson, who has yet to announce his candidacy, is showing surprising strength.
http://www.opinionjournal.com/federation/feature/?id=110010206
Is There a Third Term Curse?
No, but 2008 looks tough for Republicans anyway.
BY JAY COST
Thursday, June 14, 2007 12:00 a.m. EDT
Many times, methodological mistakes lead to substantive mistakes. Methodological mistakes can be subtle, and oftentimes they are the product of overenthusiasm. That is, analysts and pundits are so eager to offer something of substance that they commit some kind of methodological error that, in turn, leads to an erroneous conclusion.
One such error that I often see is a kind of correlation-as-causation fallacy. To be a little cheeky, we might call it the fallacy of the historical curse. I often read pundits who cite historical trends and then use those trends as an argument for why something will happen. For instance, last year, pundits, in their attempts to analyze the congressional elections, were wont to offer a litany of reasons to expect the Republicans to do poorly. One of those reasons was something to the effect of, "Parties of the president always do poorly in their sixth years."
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/13/AR2007061302051.html
Spielberg Turns Spotlight on Clinton
By Politics
Thursday, June 14, 2007; Page A10
Is the Hollywood flirtation with Sen. Barack Obama beginning to fade?
One indicator came yesterday, as director Steven Spielberg endorsed Sen. Hillary Rodham Clinton. Spielberg, of course, co-hosted the David Geffen fundraiser for Obama earlier this year -- triggering a wave of speculation at the time that many in the entertainment industry, like Geffen, saw too much baggage in the Clinton candidacy.
http://www.usatoday.com/news/politics/election2008/2007-06-13-obama-clinton_N.htm
Upper-income black donors back Obama over Clinton
By Fredreka Schouten and Paul Overberg, USA TODAY
WASHINGTON — Democrat Barack Obama is surpassing rival Hillary Rodham Clinton in campaign contributions from areas with blacks of above-average income, a USA TODAY analysis shows.
The Illinois senator has received more than double the number of campaign contributions from ZIP codes with sizable concentrations of upper-income blacks than Clinton, according to the analysis of first-quarter campaign records.
http://www.nytimes.com/2007/06/14/us/politics/14rezko.html?_r=1&hp&oref=slogin
An Obama Patron and Friend Until an Indictment
By CHRISTOPHER DREW and MIKE McINTIRE
Published: June 14, 2007
CHICAGO — Antoin Rezko, an entrepreneur of considerable charm who found riches in fast food and real estate, is known around Chicago as a collector of politicians.
Back in the 1990s, Mr. Rezko’s office was adorned with framed photos of candidates he viewed as up-and-comers. Among them was Barack Obama, a state legislator whose first campaign donations included $2,000 from Mr. Rezko’s companies. As Mr. Obama built a career that carried him to the Senate in 2004, Mr. Rezko was there with him, holding fund-raisers and rallying support.
http://thecaucus.blogs.nytimes.com/2007/06/13/2008-obama-girl-and-more/
June 13, 2007, 9:12 pm
Racing around our e-mails and clocking up the views on YouTube is an incredibly racy, well, steamy new video “I Got a Crush … on Obama” by a student (Obama Girl) and a new Web site, barelypolitical — uh-huh — that teases it’ll give us more info later.
Well, if you watch the video, you’ll understand. It not only has her doing pole-dancing on the subway (clothed, mind you), but mashing up her bikini-clad bod next to those pix of Senator Barack Obama shirtless in his trunks from his Hawaii vacation last year.
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/13/AR2007061301577.html
Primary Calendar Poses Big Challenges
By Chris Cillizza and Paul Kane
washingtonpost.com staff writers
Wednesday, June 13, 2007; 4:00 PM
As they criss-cross the nation at a dizzying pace, Democratic and Republican presidential candidates are locked in a fast-track campaign that has forced frontrunners and the far-behind to rethink the traditional path to nomination seven months before a single vote is cast.
In prior campaigns, candidates fought for votes in Iowa and New Hampshire while largely ignoring the rest of the country based on a time-tested belief that wins in those two early states would slingshot them into contention. But now, with many large states moving their primaries to late January or early February, even the best-known and best-financed candidates are being forced to make tough tradeoffs.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070614/OPINION03/706140306/1008/OPINION01
Thursday, June 14, 2007
Thomas Sowell
Public halts bipartisan immigration betrayal
With immigration, the most important decision is: Who is to make the decision?
It should be too obvious for words that decisions about who is to live among Americans should be made in the United States by Americans.
In reality, however, for years that decision has been made in Mexico by Mexicans and others who chose to cross the border from Mexico into the United States with impunity, knowing that even if they were caught, they would at worst be turned back -- and could try again.
http://hosted.ap.org/dynamic/stories/C/CONGRESS_IMMIGRATION?SITE=MIDTN&SECTION=HOME&TEMPLATE=DEFAULT
Jun 14, 3:09 AM EDT
Senators work to revive immigration bill
WASHINGTON (AP) -- Key Republican and Democratic senators are reaching for a deal to resurrect their stalled immigration compromise by requiring that some $4 billion be spent on border security and workplace enforcement.
The mandatory security funding is part of a plan to attract more Republican support for the measure, which grants legal status to millions of unlawful immigrants.
In private meetings Wednesday, the bipartisan group that crafted the delicate compromise was hammering out a plan to allow votes on a limited set of Republican- and Democratic-sought changes in exchange for a commitment from GOP holdouts that they will back moving ahead with the bill.
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/13/AR2007061302399.html
House Leaders Near Agreement on Managing Earmarks in Spending Bills
Washington Post Staff Writer
Thursday, June 14, 2007; Page A13
House leaders moved toward a tentative agreement last night on allowing votes on "earmarks" attached to upcoming annual spending bills, potentially ending a Republican-led floor protest over the handling of pet spending projects that had brought voting on the bills to a standstill.
The deal would allow the first two spending bills, for homeland security and for military construction and veterans affairs , to pass the House this week without any earmarks in their texts. Earmarks would be added later, as Democrats originally planned, before the bills enter conference, in which they are reconciled with their Senate versions.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070614/POLITICS/706140420/1022
Thursday, June 14, 2007
Prosecutor inquiry deepens
Congress subpoenas two Bush administration figures in investigation of eight firings.
Laurie Kellman / Associated Press
WASHINGTON -- Congress issued subpoenas Wednesday for former presidential counsel Harriet Miers and political director Sara Taylor, reaching inside the White House for the first time in the probe of the firings of eight federal prosecutors.
The Bush administration appeared in no hurry to encourage the pair to testify, as the subpoenas demanded. Complying could set a precedent for testimony by another adviser not yet on the subpoena list: presidential counselor Karl Rove.
The Democratic chairmen of House and Senate committees implicitly threatened a constitutional showdown if the White House does not comply with the subpoenas -- or strike a deal.
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/13/AR2007061300733.html
2 Former Aides to Bush Get Subpoenas
Miers, Taylor Had Roles in Firings Of U.S. Attorneys
Washington Post Staff Writers
Thursday, June 14, 2007; Page A01
The decision by two congressional panels to issue subpoenas to the White House yesterday escalates a constitutional showdown over the Justice Department's firing of nine U.S. attorneys that could end up being decided by the federal courts.
The subpoenas from the House and Senate judiciary committees are the first to be served directly on the White House or its staff since the start of the uproar over the prosecutor firings. They signal that Democrats are willing to pursue protracted litigation to determine whether President Bush or his top aides played a significant role in identifying U.S. attorneys to be removed.
http://hosted.ap.org/dynamic/stories/C/CIA_LEAK_TRIAL?SITE=MIDTN&SECTION=HOME&TEMPLATE=DEFAULT
Jun 14, 6:16 AM EDT
Libby headed back to court
WASHINGTON (AP) -- Former White House aide I. Lewis "Scooter" Libby is headed back to court to try to forestall his 2 1/2-year prison term in the CIA leak case.
Libby, the former chief of staff to Vice President Dick Cheney, planned to ask a federal judge Thursday to put the sentence on hold while he appeals his perjury and obstruction conviction.
It would be a longshot request before a judge who has already said he sees no reason to grant it.
But even if U.S. District Judge Reggie B. Walton were to order Libby to prison at Thursday's hearing, it is unlikely Libby would be taken away in handcuffs. Rather, it would led to more maneuvering in Libby's legal fight.
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/13/AR2007061302453.html
FBI Finds It Frequently Overstepped in Collecting Data
By John Solomon
Washington Post Staff Writer
Thursday, June 14, 2007; Page A01
An internal FBI audit has found that the bureau potentially violated the law or agency rules more than 1,000 times while collecting data about domestic phone calls, e-mails and financial transactions in recent years, far more than was documented in a Justice Department report in March that ignited bipartisan congressional criticism.
The new audit covers just 10 percent of the bureau's national security investigations since 2002, and so the mistakes in the FBI's domestic surveillance efforts probably number several thousand, bureau officials said in interviews. The earlier report found 22 violations in a much smaller sampling.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070614/POLITICS/706140398/1022
Thursday, June 14, 2007
House OKs national background gun check
Jim Abrams / Associated Press
WASHINGTON -- The House voted Wednesday to fix flaws in the national gun background check system that allowed the Virginia Tech shooter to buy guns despite his mental health problems.
The legislation, passed by voice vote, was backed by the National Rifle Association, boosting its chances of becoming the first major gun control law in a decade.
"As the Virginia Tech shooting reminded us, there is an urgent national need to improve the background check system" to keep guns out of the hands of those barred from buying them, said House Speaker Nancy Pelosi.
http://hosted.ap.org/dynamic/stories/C/CONGRESS_GUN_CONTROL?SITE=MIDTN&SECTION=HOME&TEMPLATE=DEFAULT
Jun 14, 12:49 AM EDT
House tempers background checks for guns
WASHINGTON (AP) -- The House voted Wednesday to fix flaws in the national gun background check system that allowed the Virginia Tech shooter to buy guns despite his mental health problems.
The legislation, passed by voice vote, was endorsed by the National Rifle Association, boosting its chances of becoming the first major gun control law in more than a decade.
"As the Virginia Tech shooting reminded us, there is an urgent national need to improve the background check system" to keep guns out of the hands of those barred from buying them, House Speaker Nancy Pelosi said.
The measure would require states to automate their lists of convicted criminals and the mentally ill who are prohibited under a 1968 law from buying firearms, and report those lists to the FBI's National Instant Criminal Background Check System, or NICS.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070614/POLITICS/706140417/1022
Thursday, June 14, 2007
Passport waiver mix-up strands air travelers
Some carriers refuse to board passengers who did not realize they needed birth certificates.
Peter Pae and Jane Engle / Los Angeles Times
Just when it seemed the passport logjam was starting to ease, passengers faced another obstacle this week: Some airlines refused to let them board planes because they didn't have birth certificates with them.
In yet another embarrassment for the State Department, temporary measures enacted last Friday to reduce a huge backlog of passports is leading to more unexpected aggravation.
"It's a real bummer," said Alex Alvarado, a 10-year-old Needles, Calif., resident who was blocked from boarding a plane to Mexico City for a summer soccer camp because he didn't have a birth certificate -- something Mexico requires if you don't have a passport.
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/13/AR2007061300810.html
President Names Ex-GOP Leader As Key Adviser
Washington Insider to Assume Role Being Vacated by Longtime Counselor
Washington Post Staff Writer
Thursday, June 14, 2007; Page A03
President Bush yesterday tapped veteran GOP strategist and lobbyist Edward W. Gillespie as White House counselor, adding another Washington insider to a key position in his administration as it continues to battle with Congress over Iraq, the Justice Department and immigration.
Gillespie, 45, will replace outgoing counselor Dan Bartlett, who is leaving at the end of the month to spend more time with his family, and is the latest in a parade of prominent outsiders who have gradually been replacing Bush's original team. Gillespie will also be stepping down as chairman of the Republican Party in Virginia.
http://hosted.ap.org/dynamic/stories/C/CONGRESS_SPENDING?SITE=MIDTN&SECTION=HOME&TEMPLATE=DEFAULT
Jun 13, 8:43 PM EDT
Agreement nears in homeland funding bill
WASHINGTON (AP) -- Warring factions in the House neared the end of a two-day imbroglio over how to handle thousands of requests by lawmakers for home district projects, as Democrats yielded to GOP demands for floor votes on offending "earmarks."
The development came Wednesday evening as leaders in both parties, not to mention rank-and-file lawmakers, became increasingly frustrated over the earmarks impasse that held up debate for a second day on the popular budget bill funding the Homeland Security Department.
The agreement has not been finalized, but under an outline described by both Democrats and Republicans, Democrats would largely abandon plans to bypass floor debates on earmarks, while Republicans would offer procedural help to move the 12 spending bills through the notoriously partisan House. Republicans cautioned that an agreement was not final.
http://hosted.ap.org/dynamic/stories/U/US_IRAQ?SITE=MIDTN&SECTION=HOME&TEMPLATE=DEFAULT
Jun 14, 6:27 AM EDT
Military officers now targets on Hill
WASHINGTON (AP) -- A Democratic challenge to Gen. Peter Pace indicates that uniformed officers no longer are exempt from the partisan fire on Capitol Hill once reserved for civilian policymakers.
On Friday, Defense Secretary Robert Gates made the stunning announcement that he would not recommend Pace to serve a second two-year term as the chairman of the Joint Chiefs of Staff. The Marine Corps four-star general had not been a target previously of Democrats' ire on the war, but Gates said lawmakers made it clear the confirmation process would be ugly.
"It would be a backward looking and very contentious process," Gates said at a Pentagon news conference.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070614/OPINION03/706140301/1008/OPINION01
Thursday, June 14, 2007
Kathleen Parker
Military leader may be victim of partisan politics
Gen. Peter Pace -- the first Marine Corps officer to serve as the chairman of the Joint Chiefs of Staff -- is being precipitously let go.
In a surprise announcement last week, Defense Secretary Robert Gates said that Pace wouldn't be renominated to a second term. In his place, Adm. Mike Mullen, current chief of naval operations, would take over when Pace's term expires Sept. 30.
As the highly qualified, deeply respected Pace is being ushered out the door, it is reasonable to wonder why.
http://www.opinionjournal.com/editorial/feature.html?id=110010207
Al Qaeda's American Harbor
A bad decision likely to be overturned.
Thursday, June 14, 2007 12:01 a.m. EDT
On Monday, the Fourth Circuit Court of Appeals ruled that al Qaeda agent Ali Saleh Kahlah al-Marri can't be detained as an enemy combatant. The press corps is reporting--no, shouting, cheering, doing somersaults--that this is further proof that Bush Administration detainee policies are doomed to legal oblivion.
Well, here's a wager: This decision is the outlier and will be overturned on appeal, while most of the Administration's legal antiterror architecture will survive past January 20, 2009. Any takers?
http://hosted.ap.org/dynamic/stories/I/IRAQ_PENTAGON_REPORT?SITE=MIDTN&SECTION=HOME&TEMPLATE=DEFAULT
Jun 14, 3:06 AM EDT
Pentagon: Iraqi violence still rising
WASHINGTON (AP) -- Violence in Iraq, as measured by casualties among troops and civilians, has edged higher despite the U.S.-led security push in Baghdad, the Pentagon told Congress on Wednesday.
In its required quarterly report on security, political and economic developments in Iraq, covering the February-May period, the Pentagon also raised questions about Prime Minister Nouri al-Maliki's ability to fulfill a pledge made in January to prohibit political interference in security operations and to allow no safe havens for sectarian militias.
Overall, however, the report said it was too soon to judge whether the security crackdown was working.
The security operation was launched Feb. 14 and is still unfolding as the last of an additional 28,000 or so U.S. forces are getting into position in and around the Iraqi capital. The Pentagon is required by Congress to provide its initial assessment of the operation in July, and Gen. David Petraeus, the top U.S. commander in Iraq, has said he will report in September.
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/13/AR2007061302357.html
No Drop in Iraq Violence Seen Since Troop Buildup
Washington Post Staff Writer
Thursday, June 14, 2007; Page A01
Three months into the new U.S. military strategy that has sent tens of thousands of additional troops into Iraq, overall levels of violence in the country have not decreased, as attacks have shifted away from Baghdad and Anbar, where American forces are concentrated, only to rise in most other provinces, according to a Pentagon report released yesterday.
The report -- the first comprehensive statistical overview of the new U.S. military strategy in Iraq -- coincided with renewed fears of sectarian violence after the bombing yesterday of the same Shiite shrine north of Baghdad that was attacked in February 2006, unleashing a spiral of retaliatory bloodshed. Iraq's government imposed an immediate curfew in Baghdad yesterday to prevent an outbreak of revenge killings.
MIRS Capitol Capsule, Wednesday, June 13, 2007
John Reurink (517) 482-2125
New Business Tax Deal Reached
Michigan businesses have a new tax.
Nearly 100 hours of closed-door negotiations have yielded a one-of-a-kind hybrid called the Michigan Business Tax (MBT), which Gov. Jennifer GRANHOLM and legislative leaders proudly proclaimed would encourage economic growth and investment in Michigan.
While the new tax is slated to bring into state coffers the same $1.9 billion the soon-to-be retired Single Business Tax (SBT) generated, out-of-state businesses will pay around $100 million more while manufacturers see property tax relief as high as 67 percent. The MBT includes credits for companies that invest in Michigan while increasing the state's insurance tax 17 percent from 1.07 percent to 1.25 percent.
Roughly 72 percent of all businesses can be declared winners under the agreement, while real estate firms, banks and insurance companies could be seen as losers. Small businesses will see a $300 million tax cut.
"The message we wish to send is Michigan is open for business," said Granholm.
Showing all the glow of new parents, Granholm, Senate Majority Leader Mike BISHOP, House Speaker Andy DILLON, state Treasurer Bob KLEINE and the eight legislative members of the business tax work group formally announced the agreement at a 5:30 p.m. press conference.
The framework of the deal mirrors what MIRS reported late last night in a breaking news alert, but legislative leaders were waiting throughout the day for the Department of Treasury numbers before officially signing on the bottom line.
Two-thirds of the new business tax will be made up of a modified gross receipts tax, which officials called a "margins tax." The rate will be under 0.8 percent and will not include tangible property. The other third will be a business income tax. Banks will pay a capital stock tax for banks.
Industrial corporations will see personal property tax relief of 24 mills, plus a 35 percent refundable credit on any remaining industrial personal property. Commercial businesses will see 12 mills of personal property tax relief, equaling a 23 percent cut.
Tax credits of up to 65 percent are made for investment and compensations, and another 75 percent credit will be available for research and development. An entrepreneurial credit Sen. Nancy CASSIS (R-Novi) wanted in the deal was added as well.
Small businesses would be allowed to pay a 1.8 percent income tax in place of the MBT.
If the new tax brings into the state a certain amount over the anticipated $1.9 billion in 2008, 2009 and 2010, half of the overage will be refunded back to businesses and the other half will be put in the Budget Stabilization Fund (BSF). Legislation that encapsulates this agreement will be drafted late this week. Legislative action is expected in the next week or two, enough time to meet the business community's-imposed July 1 deadline.
Dillon called the agreement "a victory for Michigan businesses and Michigan workers." Bishop said the broad-based tax is fair to small business while giving "generous personal property tax" relief. The Big Three automakers will pay under the new tax, unlike the original House Democrat plan, where large manufacturers could have received a check back from the state.
Although the modified gross receipts tax and the business income tax are elements of business taxes in other states, no other state has this type of configuration. Granholm was asked if the MBT will suffer the same criticisms as the expiring SBT — that it's too complex, too unique and too fractured.
"This is not like the SBT," she said. "This flips the SBT on its head."
The big change is the rewards for investment in Michigan, she said. The governor also urged state leaders to "hold true to the agreement" so it doesn't get punctured with special exemptions and loopholes like the SBT.
Lawmakers voted in the fall of 2006 to scrap the SBT by the end of this year. Because the measure came to the legislative body through the citizen petition process, Granholm could not veto it. Oakland County Executive L. Brooks PATTERSON was the well-known face behind the petition drive.
The celebratory tone of today's press conference resembled that of a locker room of a softball team that rallied from six runs down in the last inning to win a game.
Rep. Steve BIEDA (D-Warren), the chair of the House Tax Policy Committee, said, "I never thought I'd ever hear myself trumpeting the creation of a new tax."
The deal came together Tuesday night after roughly six hours of up-and-down negotiations within the tax workgroup, which had already met for five weeks on this subject. At one point in the meeting, it appeared the Senate Republicans would walk out. At another point in the meeting, it looked like the House Democrats would walk out.
Sen. Buzz THOMAS (D-Detroit) turned out to be one of the unsung heroes behind the deal. Sources said Thomas, a former House Minority Leader, was able to cool off some tempers and get the negotiations back on track.
"I just said that we had met enough. We were very close and it was time to wrap it up," Thomas said.
A final deal was reached shortly after 9 p.m. and came down to Bieda and Cassis, the two main drivers of the workgroup, coming to terms with what each would and would not accept.
"We persevered, which I think speaks to the stewardship of the members of the work group," Cassis said. "It's like a marriage. You may wake up in the morning and have a disagreement with your spouse. By lunch you're talking, and at dinner you're kissing again."
The Senate Republicans can declare victory on the structure of the base of the tax, its tax relief for small business and an entrepreneurial credit Cassis had wanted.
The House Democrats had made personal property tax relief and tax credits for investment and compensation a major part of their tax.
The Governor and her administration stressed that the new tax be revenue neutral. She also put an emphasis on making the business tax "more fair" by shifting some of the liability from manufacturers to industry without tangible assets, like insurance companies and banks, which is what the new tax does. The new tax will bear the moniker "The Michigan Business Tax," which the governor also created.
Outside of Bieda, Cassis, Thomas and Kleine, members of the legislative workgroup included: Sen. Jud GILBERT (R-Algonac), Sen. Mark JANSEN (R-Cutlerville), Rep. Paul CONDINO (D-Southfield), Rep. Kathy ANGERER (D-Dundee) and Rep. Brian CALLEY (R-Portland).
"This compromise reflects sound public policy for our state," Bishop said. "I am confident this legislation creates a more manageable structure than its predecessor and will help set Michigan on the path to economic recovery."
Said Dillon, "This plan brings significant rewards to businesses that want to locate in Michigan and to our businesses that already support Michigan's economy."
GONGWER- Volume #46, Report #114 --Wednesday, June 13, 2007
Larry Lee (517) 482-3500
NEW M.B.T. SHOULD MAKE MICHIGAN COMPETITIVE, OFFICIALS SAY
A new business tax structure for the state that relies on a combination gross receipts and income tax with substantial personal property tax relief will "send a message across the country" that Michigan is competitive for new business, Governor Jennifer Granholm and the top legislative leaders said in a press conference Wednesday evening that confirmed accord on a "conceptual agreement" to replace the Single Business Tax.
Ms. Granholm said the new agreement helps make a "business case" for locating in Michigan. Senate Majority Leader Mike Bishop (R-Rochester) said the proposal will help "position Michigan for the 21st Century," and House Speaker Andy Dillon (D-Redford Twp.) said that while the focus has been on the effect the tax will have on businesses the agreement represents a "victory" for Michigan workers as well.
The proposal will replace the $1.9 billion in revenue that the SBT would have netted Michigan. Ms. Granholm said 70 percent of the state's businesses would see a tax break compared to the SBT. The SBT ends on December 31.
In initial responses to the tax, a number of business groups were cautious but mostly positive on the proposal.
The final formal announcement of the agreement came after initial word leaked out late Tuesday night that an agreement was reached. Officials largely refused comment through the day (although Senate leaders were stunned Wednesday morning with a "spontaneous" announcement on the chamber floor from Sen. Nancy Cassis (R-Novi) that there was a "victory" on the business tax) except to say there had been progress. Officials were waiting for a 4 p.m. meeting to review final details and agree on the joint statement.
One of the more noteworthy aspects of the agreement was that the sheet outlining it was signed by all of the legislative workgroup participants as well as Ms. Granholm, Mr. Bishop and Mr. Dillon. Two other major announcements earlier in her administration fell apart dramatically and publicly, and officials then said had there been signed agreements then the issues might not have collapsed.
There are still technical details to be completed, officials said, and bill drafters will begin work on the legislation later this week. Legislative action will likely take place next week (one source said, in fact, that next week should be "a busy week") with the goal of completing action on the tax by July 1.
The tax structure will be based with two-thirds of revenues coming from a "margins tax" - which is how the legislative group is styling the gross receipts portion - with a rate under .8 percent and one-third coming from business income with a rate of under 5 percent. The group is basing the "margins" on a company's sales less its purchases of tangible property.
In terms of the personal property tax credits, industrial personal property will get credits for 24 mills while commercial businesses will see credits for 12 mills. In addition there will be a 35 percent credit on the remaining industrial personal property and a telephone credit corresponding to commercial personal property.
Ms. Granholm said that industrial companies will see a 65 percent personal property tax credit, while commercial businesses will see a 23 percent personal property tax credit.
The tax agreement also includes:
- An investment and compensation credit capped at 65 percent of liability;
- A research and development credit capped at 75 percent of liability;
- An entrepreneurial tax credit;
- A small business alternative tax that would allow qualifying firms to pay a 1.8 percent tax based on their adjusted business income;
- In addition, the officer compensation disqualifying provision now in the SBT would be bumped up from $160,000 to $180,000, and flow-through business entities would be permitted to access the compensation credit;
- The aggregate business income disqualifying provision would be increased to $1.3 million;
- And it increases the gross receipts phase-out for small businesses from the small business treatment to between $18 million and $20 million.
The total cost of the small business portion will be $120 million, and Mr. Bishop and Sen. Nancy Cassis (R-Novi) said one aspect of the plan they were most pleased with was that the tax would help smaller companies grow and expand.
The proposal also has a three-year revenue trigger to ensure that businesses in general pay no more than they are under the SBT. For the first year, the trigger is set if revenues exceed 5 percent over the 2007-08 base (and that base is defined as the revenue neutral SBT yield plus personal property tax millage reductions "excluding insurance"). In the next two years, the revenue trigger would be the tax's percentage increase over the personal income plus 1 percent.
If the revenue trigger is pulled then half the excess is refunded to businesses and the other half is paid to the Budget Stabilization Fund.
But while more than 70 percent of businesses are estimated to see some tax break, some businesses will see tax increases and those are mostly financially-based companies.
The agreement would set the state's insurance premium tax to 1.25 percent plus credits. It would set a capital stock tax for banks.
Ms. Granholm said those companies paying more would be paying a "fairer" tax rate.
Ms. Cassis said the credits available to companies located in Michigan were a critical element of the proposal. "Exporting the tax" will help draw businesses into the state, she said.
Treasurer Robert Kleine said out of state businesses would pay about $100 million more under the proposal.
The agreement was reached after weeks of concentrated negotiations that followed months of stop and start talks punctuated often with harsh words that generally went between Mr. Bishop and Ms. Granholm.
Asked if their relationship had improved because of the agreement, Ms. Granholm said the two have a "great relationship." Mr. Bishop was then called to the podium to comment and blushed visibly as Ms. Granholm beamed at him. "We just might kiss," he joked.
But he said the process had involved a "little bit of gamesmanship, a little bit of politics." But "I never threw trust out the window," he said. The negotiations were a good faith on the part of all individuals and has helped "us develop a relationship that will help us move forward."
The Small Business Association of Michigan applauded the compromise, and urged quick action. "The House and Senate have done well in devising a package that is certainly a tremendous improvement over the old Single Business Tax. We believe it will result in an overall tax cut for most small businesses. It's a good solution that needs to be enacted now to end the uncertainty that small business owners have bout the shape of the business tax structure," said SBAM Vice President Todd Anderson.
Michigan Chamber of Commerce Vice President Rich Studley said his understanding of the agreement sounds like "conceptually it is in the ballpark in the mix of elements that could result in a tax that is not just different, but better than the SBT."
The agreement, he noted, keeps the Legislature on track to get a replacement in place by July 1, but he said it is important that final drafts of the bills be made available publicly for a few days prior to a vote to help avoid unintended consequences or omissions. Mr. Studley said it is particularly important to make sure all the "t's are crossed and the i's are dotted" because lawsuits are expected in a major business tax rewrite.
Earlier in the day Chuck Hadden of the Michigan Manufacturers Association was still assessing whether the proposal was beneficial, but early indications seemed to him that it could be. The personal property tax credits as well as the other credits that were kept from the House proposal were very critical to his members, he said.
The state's major auto manufacturers said little on the proposal during the day. Ms. Granholm said they would pay tax under the proposal, though less than under the SBT.
And all the participants said the tax would help boost employment in Michigan, though by how many jobs and beginning when no one could say.
