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Legislative Report MAPO
position adopted: state tax reduction delayed Little more than a week after the Michigan Association of Police Organizatins publicly proclaimed its position on Governor Granholm's then-pending budget executive order, that stance was adopted as part of a compormise deal - announced Dec. 18 - to erase Michigan's $920-million deficit. The MAPO Board of Directors 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 would lead to layoffs of police officers 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 throught 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 proration 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 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). Regarding another issue of great concern to MAP and all other MAPO organizations, legislation will be introduced in other MAPO organizations, legislation will be introduced in January clarifying that Garrity statements may not be related to a third-party without written consent of the officer involved. It has been a pleasure for Karoub Associates to partner with MAP and MAPO, and we look forward to helping you in the future with matters of legislative interest. |
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