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November 7, 2008
POLITICS AND THE CAPITOL . . . POST 2008
The 2008 election brought a larger majority to the House Democrats, increased the number of women and minority legislators to serve in the House and continued a slow ramp up of Democratic control of the lower chamber. The year 2008 capped a 6-year run that has seen 19 seats move from the Republican side of the aisle to the Democratic caucus.
The 2008 General Election also saw Democratic gains in areas that have been Republican strongholds since the Reagan administration. From the Northwest coast of the Lower Peninsular to Oakland, Macomb and St. Clair counties, the Democrats were successful in changing the election map for our state. In Macomb County, the Democrats picked up two seats to take control of the county delegation. In Oakland County, once the centerpiece of the Republican base in Michigan, the House delegation is now evenly split 7-7 between Democrats and Republicans.
The respective caucuses will have a number of new faces to start 2009. The Republicans will greet 20 new members to their 43-member caucus. Republicans will have 37 men and 6 women on their House team. Two African Americans will join the House Republicans, a number which has not been reached in modern history in our state.
Democrats will have 26 new members joining their 67-strong caucus in 2009. Twenty-two members of their caucus are women and 19 and minorities.
Both caucuses plan to bring their new members to Lansing soon to begin the orientation process and to discuss committee structures and appointments.
HOUSE DEMS PICK LEADERS
The House Democratic causes met Thursday to elect their leadership team for the 95th legislature. Not surprisingly, Speaker Andy Dillon (D-Redord) who led the Democrats to their largest majority since the early 1970s was reelected without opposition.
Joining Speaker Dillon will be Rep. Kathy Angerer (D-Dundee) as Majority Floor Leader and Rep. Pam Byrnes (D-Chelsea) as Speaker Pro-Tempore. The caucus voted to allow the Speaker to appoint the remaining leadership posts prior to the January start up of the next legislature.
PRIORITIES BEING SET FOR LEGISLATIVE LAME DUCK SESSION
Governor Granholm, legislative leaders and the business community are starting to return to normal following the elections - talk is turning to legislative lame duck priorities and what business they hope to conclude prior to sine die adjournment and all pending legislation dying on December 31.
The House and Senate both plan to be in session next Wednesday and Thursday. Tuesday, November 11, is Veterans Day and state offices are closed. Both chambers plan to adjourn Thursday for Thanksgiving recess and will reconvene on Tuesday, December 2.
Governor Granholm said Thursday that her state legislative priorities prior to the year end are: expanding the Cobo Convention Center in Detroit; developing a light rail system along the Woodward corridor in Detroit; completing action on promise zone legislation that will help communities allow residents to attend colleges free of tuition costs; and reducing home foreclosures in the state, including a 90-day freeze on foreclosures. She did not rule out other issues, including reform of the Michigan Business Tax and its business surcharge in exchange for reforms to the corrections funding.
Senate Majority Leader Mike Bishop said Wednesday that his first priority is to change the Michigan Business Tax with tax revenue reductions likely being offset by savings in the state corrections system. He also said that several issues that could be part of the lame duck are the Cobo expansion, light rail, the smoking ban in public places and the Blue Cross Blue Shield individual market reform for health care insurance.
Senator Bishop said his Republican caucus discussed the lame duck priorities at a member's retreat Thursday. The Senate Commerce and Tourism Committee plans hearings next week on the Cobo expansion legislation and the Senate Transportation Committee has scheduled hearings on the light rail system.
The House-Senate conference committee on the individual market reform has not set a schedule for work on the health care insurance issue. Mr. Bishop said the Senate plans to hold session for seven days following the Thanksgiving holiday break until year end but would not rule out additional session days if progress was being made on critical issues and more time was needed to conclude negotiations.
House Speaker Andy Dillon said the Cobo expansion, light rail system expansion were on his lame duck agenda. He also wants to see action on the definition of the Detroit Public Schools as a first class school system.
Meanwhile, the Detroit Regional Chamber announced its business agenda for the lame duck session to include the MBT surcharge reform balanced off with the Corrections Department budget reductions, health care individual market reform, creating an Aerotropolis to make Detroit Metro Airport a global destination for business and entertainment, public transit options in Southeast Michigan and the Cobo expansion.
GOVERNOR EXPECTED TO ORDER BUDGET CUTS
Governor Granholm said Thursday in a capitol press conference that she expects to soon issue an executive order calling for reductions in the 2008-09 state budget. She would not give a total amount for the reductions; but administration officials have said it will likely be in the $100 million range.
"It is very clear that we will have a very challenging year ahead of us," the Governor said. She said the amount of the reduction will be decided after the University of Michigan's Research Seminar in Quantitative Economics is held later in November.
State officials said that Congressional discussions on a possible second federal economic stimulus package directed at supporting state and local governments will impact the amount of state reductions needed. State budget officials have not said how the cuts would be allocated between departments, school aid, and colleges and universities.
Once the governor issues the executive order, it has to be approved or rejected by the two legislative appropriations committees.
GOVERNOR SAYS STATE WILL PROVIDE BANKS FUNDS FOR MICHIGAN LOANS
Governor Granholm said Thursday the state would provide up to $150 million of state funds to banks and credit unions to make available for loans to Michigan businesses. The Governor said the plans would require the state banks and credit unions to guarantee that up to 80 percent of the money would go for loans.
The Department of Treasury said the program would use up to $150 million of the state's common cash to purchase certificates of deposit at competitive rates from state banks and credit unions. They were still working on details on how long the CDs would be held.
SENATE FISCAL AGENCY REPORT SHOWS ECONOMIC CRISIS CONCERNS
The Senate Fiscal Agency said in its regular bimonthly report that "negative repercussions" could occur in state and local governments because of the continued global financial crisis. "It is clear the economic activity will be slower than had been projected previously and tax revenue will be less than previously estimated," the report concluded.
The SFA paper said that state and local governments will be forced to make budget cutbacks, which will in turn hurt the economy and cause additional reductions in revenue. Capital outlay borrowings by state and local governments could be delayed and the projects end up with higher costs.
The state has not made any short-term borrowings to help with its cash flow because of the continued concern over market fluctuations. The borrowing is generally made in October but has been delayed because of the volatility in the financial market. Department of Treasury officials hope to complete action on a $600 million short-term borrowing by next week.
The SFA said that the multi-billion drop in the state's pension fund will force an increase in pension contribution rates paid for both public school employees and state government workers.
GOVERNOR PLANS MIDEAST INVESTMENT MISSION
Governor Granholm announced Thursday that she will travel to Israel and Jordan on November 14-20 to meet with business leaders to encourage them to invest in Michigan. The Governor will be joined on her seventh overseas investment mission since 2004 by Michigan Economic Development Corporation President James C. Epolito.
"These missions are part of my go anywhere, do anything strategy to grow Michigan's economy by encouraging international companies to invest in Michigan," Governor Granholm said. While in Israel and Jordan the Michigan delegation will meet with leaders of the countries' advanced manufacturing, alternative energy, homeland security/defense, venture capital and water treatment technology sectors.
Epolito will join the Governor in Israel after traveling to Dubai for discussions with business and government leaders in the United Arab Emirates (UAE).
PAADVISORY BRIEFS
House Committee Approves 911 Sunset Fee Extension. The House Energy and Technology Committee approved legislation Thursday that would extend until December 2014 the fees counties assess on phone lines for 911 emergency services. HB 6070 extends the law approved last year to apply 911 charges to cell phones and voice over Internet protocol. Without the extension the assessment would sunset on February 2009.
Senate Committee Approves Bill on Funeral Insurance Coverage. The Senate Banking and Financial Institutions Committee approved legislation Thursday to give access to burial insurance to people whose health problems make them ineligible for traditional death benefit coverage. SB 1534 would establish an insurance program for individuals to receive full burial benefits after two years and partial benefits during the first and second year of a policy's activation.
Bird Leaving as House Speaker's Press Secretary. Greg Bird, who has been the press secretary for House Speaker Andy Dillon, announced this week he was leaving state government to accept a position with Wayne State University. Prior to joining the House Democrats he served as press secretary for the State Budget Office.
AG Cox Announces Gubernatorial Exploratory Committee. State Attorney General Mike Cox announced Thursday that he was forming an exploratory committee for the 2010 gubernatorial election. The filing with the Bureau of Elections allows Attorney General Cox to form a finance committee for the race.