Michigan Votes

2007 House Bill 5408 (Impose Michigan Business Tax surcharge and repeal service tax )

Public Act 145 of 2007

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  • Introduced by Rep. Andy Coulouris on October 31, 2007, to create a “vehicle” bill that could be used to raise certain rates, credits and refunds in the Michigan Business Tax by an amount determined to equal the revenue projected from the new 6 percent tax on many services, which presumably would then be repealed.
    • Referred to the House Tax Policy Committee on October 31, 2007.
      • Reported in the House on November 8, 2007, with the recommendation that the substitute (H-1) be adopted and that the bill then pass.
    • Substitute offered in the House on November 8, 2007, to replace the previous version of the bill with one that imposes a Michigan Business Tax surtax, as desribed in the House-passed bill. For more details see House Fiscal Agency analysis. The substitute passed in the House by voice vote on November 8, 2007.
    • Amendment offered by Rep. Kimberly Meltzer on November 8, 2007, to repeal the service tax but not impose a Michigan Business Tax surcharge. The amendment failed in the House by voice vote on November 8, 2007.
  • Passed in the House (58 to 47) on November 8, 2007, to impose a 32.9 percent surcharge on businesses subject to the Michigan Business Tax, and repeal the new 6 percent tax on many services. After the 2008 tax year the surcharge would be 27.3 percent. The rate was determined by the desire to take in $614 million to avoid spending cuts in Fiscal Year 2008, and $750 million in 2009. Small businesses (gross sales below $10 million and earnings below $475,000) would be exempt, and there would be a $2 million surcharge cap on the amount of surcharge imposed on any particular company, so the the full surcharge rate would only be imposed on medium size firms. [Vote Details and Comments]
  • Moved to reconsider by Rep. Kathy Angerer on November 8, 2007, the vote by which the House passed the bill. Note: Rep. Emmons missed the first vote, and voted "no" on the second. The motion passed in the House by voice vote on November 8, 2007.
  • Received in the House on November 8, 2007, to impose a 32.9 percent surcharge on businesses subject to the Michigan Business Tax, and repeal the new 6 percent tax on many services. After the 2008 tax year the surcharge would be 27.3 percent. The rate was determined by the desire to raise $614 million to avoid spending cuts in Fiscal Year 2008, and $750 million in 2009; small businesses (gross sales below $10 million and earnings below $475,000) would be exempt, and there would be a $2 million surcharge cap on any a particular company, so the the full surcharge rate would only be imposed on medium size firms. Passed in the House (58 to 48) on November 8, 2007. [Vote Details and Comments]
  • Received in the Senate on November 20, 2007.
    • Referred to the Senate on November 20, 2007.
    • Substitute offered in the Senate on November 20, 2007, to replace the previous version of the bill with one that imposes a 13.85 percent Michigan Business Tax surtax, as opposed to the 32.9 percent rate in the House-passed bill, and makes other changes. See Senate-passed bill. The substitute passed in the Senate (20 to 16) on November 20, 2007. [Vote Details and Comments]
    • Motion by Sen. Alan L. Cropsey on November 20, 2007, that the previous question be ordered. The motion passed in the Senate (20 to 16) on November 20, 2007. [Vote Details and Comments]
    • Substitute offered by Sen. Michael Prusi on November 20, 2007, to increase the cap on the amount of surchage imposed on any one company to $3.5 million. The substitute failed in the Senate (16 to 20) on November 20, 2007. [Vote Details and Comments]
  • Passed in the Senate (20 to 16) on November 20, 2007, to impose a 13.85 percent surcharge on businesses subject to the Michigan Business Tax, and repeal the new 6 percent tax on many services. The surcharge will take in approximately $560 million annually, replacing most of the $614 million to avoid spending cuts in Fiscal Year 2008, and $750 million in 2009 and 2010. There would be a $7.5 million cap on the amount of surcharge imposed on any particular company. A $219.4 million “windfall” the state expects from the transition from the old Single Business Tax to the new MBT would be used to reduce the surcharge rate; supposedly this money would otherwise go into the rainy day fund (although current revenue projections already fall short of desired spending in the next year). The surcharge would end after 2010. The bill also slightly eases officer and owner compensaton limits on firms qualifying for a lower small business MBT rate, and directs any MBT revenue increases to reducing the surtax. [Vote Details and Comments]
  • Motion by Sen. Alan L. Cropsey on November 20, 2007, to give the bill immediate effect. The motion failed in the Senate (20 to 16) on November 20, 2007. [Vote Details and Comments]
  • Received in the House on November 20, 2007.
    • Amendment offered by Rep. Kenneth Horn on November 28, 2007, to give businesses a tax credit equal to the amount they spent preparing to comply with the new 6 percent tax on many services the bill is intended to eliminate. The amendment passed in the House by voice vote on November 28, 2007.
    • Amendment offered by Rep. Steve Tobocman on November 28, 2007, to tie-bar the bill to House Bill 5295, meaning this bill cannot become law unless that one does also. HB 5295 would impose new regulations on mortgage lenders. The amendment passed in the House by voice vote on November 28, 2007.
    • Substitute offered by Rep. Daniel Acciavatti on November 28, 2007, to replace the previous version of the bill with one that authorizes new business tax credits for Michigan International Speedway and for the costs incurred by retailers complying with the bottle deposit law, and slightly expands eligibility for an alternative small business tax rate by relaxing certain executive and owner compensation caps. This substitute does not contain any surcharge. This substitute was adopted but then made moot when another substitute containing a surcharge was subsequently adopted. The substitute passed in the House by voice vote on November 28, 2007.
    • Amendment offered by Rep. Daniel Acciavatti on November 28, 2007, to repeal the new 6 percent tax on many services, and not replace the revenue it would have taken in. Although the amendment was gaveled through on a voice vote, it was moot because minutes later the substitute version of the bill it amended was itself replaced by a substitute containing a business tax surcharge taking in all the money the service tax would have. The amendment passed in the House by voice vote on November 28, 2007.
    • Substitute offered by Rep. Paul Condino on November 28, 2007, to impose a 25.7 percent surcharge on businesses subject to the Michigan Business Tax, and repeal the new 6 percent tax on many services. The surcharge will take in enough from firms doing business in Michigan to replace all of the $614 million the service tax would have imposed to avoid spending cuts in Fiscal Year 2008, and $750 million in 2009 and 2010. There would be a $4.75 million cap on the amount of surcharge imposed on any particular company. The surcharge would be permanent, and after 2008 the rate would be 23.4 percent. The substitute passed in the House by voice vote on November 28, 2007.
  • Passed in the House (57 to 44) on November 28, 2007, to impose a 25.7 percent surcharge on businesses subject to the Michigan Business Tax, and repeal the new 6 percent tax on many services. The surcharge will take in enough from firms doing business in Michigan to replace all of the $614 million the service tax would have imposed to avoid spending cuts in Fiscal Year 2008, and $750 million in 2009 and 2010. There would be a $4.75 million cap on the amount of surcharge imposed on any particular company. The surcharge would be permanent, and after 2008 the rate would be 23.4 percent. [Vote Details and Comments]
  • Received in the Senate on November 28, 2007, to concur with the House-passed version of the bill, which has a surcharge than the Senate-passed version which takes in all the revenue the service tax would have taken. Failed in the Senate (13 to 22) on November 28, 2007. [Vote Details and Comments]
  • Received in the Senate on December 1, 2007.
    • Motion by Sen. Alan L. Cropsey on December 1, 2007, to reconsider the vote by which the House substitute was not concurred in. The motion passed in the Senate by voice vote on December 1, 2007.
    • Substitute offered by Sen. Jud Gilbert on December 1, 2007, to replace the previous version of the bill with one that establishes a 21.99 percent surtax, and also makes various revisions to the Michigan Business Tax, including classifying income earned by a trust, and payments by theaters for the rental of films. The substitute passed in the Senate by voice vote on December 1, 2007.
    • Amendment offered by Sen. Jud Gilbert on December 1, 2007. The amendment passed in the Senate by voice vote on December 1, 2007.
  • Passed in the Senate (33 to 4) on December 1, 2007, to impose a 21.99 percent surcharge on businesses subject to the Michigan Business Tax, and repeal the new 6 percent tax on many services. The surcharge will take in enough from firms doing business in Michigan to replace all of the $614 million the service tax would have imposed to avoid spending cuts in Fiscal Year 2008, and $750 million in 2009 and 2010. There would be a $6 million cap on the amount of surcharge imposed on any particular company. Around half of the $219.4 million “windfall” the state expects from the transition from the old SBT to the new MBT would be used to reduce the surcharge rate. The surcharge would end as of 2017 if aggregate personal income in the state had increased in the previous three years. If personal income was still falling, the higher business tax rate would remain. [Vote Details and Comments]
  • Received in the House on December 1, 2007.
  • Passed in the House (66 to 42) on December 1, 2007, to impose a 21.99 percent surcharge on businesses subject to the Michigan Business Tax, and repeal the new 6 percent tax on many services. The surcharge will take in enough from firms doing business in Michigan to replace all of the $614 million the service tax would have imposed to avoid spending cuts in Fiscal Year 2008, and $750 million in 2009 and 2010. There would be a $6 million cap on the amount of surcharge imposed on any particular company. Around half of the $219.4 million “windfall” the state expects from the transition from the old SBT to the new MBT would be used to reduce the surcharge rate. The surcharge would end as of 2017 if aggregate personal income in the state had increased in the previous three years. If personal income was still falling, the higher business tax rate would remain. [Vote Details and Comments]
  • Signed by Gov. Jennifer Granholm on December 1, 2007, the repeal of the 6 percent tax on many services passed on Oct. 1, 2007, which went into effect 16 hours before this gubernatorial signature, and imposition of a new 21.99 business tax surcharge.

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Comments

Introduced by Rep. Andy Coulouris on October 31, 2007. Passed in the House (58 to 47) on November 8, 2007. New Comment

1) it's amazing how [by Anonymous Citizen on December 1, 2007]
important repealing taxes becomes when the outcome of the vote is reported on the evening news. when it was just 'politics as normal', they raised taxes left and right. now that the voting public is looking, and promising to vote them out of office at the earliest opportunity, they are all concerned with repealing the tax they voted in.

where was this zeal to reduce taxes when they voted FOR this tax to begin with?
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2) They didn't reduce anything [by Anonymous Citizen on December 3, 2007]
they just shifted it. If you think that the business that are going to get whacked with this increase are just going to silently pay it, I have a bridge that you might like. All this money will be charged to the end user. You will still pay the tax but instead of paying it when you go skiing you will pay it when you buy a new washer and dryer.
Wake up sheeple
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3) Any tax that does not tax everyone fairly is unfair [by Jennybegone on December 3, 2007]
I was opposed to the service tax (I do graphic art and web design), because it singled me and others like me out for this tax, while letting others get out of their obligations completely. That includes golf courses, who got off scott free while ski resorts would have to pay.

Yes, Jenny and the folks in the legislature: Please be gone.
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4) Legislature at Work [by Anonymous Citizen on November 29, 2007]
Another fine example of our legislature at work.
Heh, heh. heh, heh. God love em!
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5) God must love them... [by Anonymous Citizen on November 30, 2007]
but i don't think he is the one who keeps on ELECTING them. let's stop shooting ourselves in the foot.

the problem here is those who vote to get a slice of the state and federal treasury. THEY will keep on shooting us in the foot to get that little slice of heaven.

then there are the union slugs who vote for what's best for the union.
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6) how about just [by Anonymous Citizen on November 30, 2007]
repealing the tax and learning to get along without the money?

the rest of us have to work that way, why won't our government?

because they have big guys with guns to come and take our money away. that's why.
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7) Common Theme [by Anonymous Citizen on November 6, 2007]
I see one common theme in so many of the bills recently introduced. The theme is to raise taxes then other taxes will presumably be repealed. I like starting my day with a good joke. We have 28 more legislators than California at 148. We have certainly not been very choosy in our selection.
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Received in the House on November 8, 2007. Passed in the House (58 to 48) on November 8, 2007. New Comment

1) Rep. Meltzer's "no vote explanation" [by Admin003 on November 9, 2007]
Rep. Meltzer, having reserved the right to explain her protest against the passage of the bill, made the following statement:

"Mr. Speaker and members of the House:

NO VOTE on 5408

I voted no on this bill because the presiding officer failed to recognize the request for record roll call on support of my amendment to repeal the service tax. The request for record roll call was supported in writing by 34 signatures, which exceeds the constitutional requirement of 22 members supporting a record roll call. This is a violation of Michigan's Constitution pursuant to Article 4, Section 18."

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2) wow... [by Anonymous Citizen on December 1, 2007]
the same people who consistantly tromp on constitutional rights are now worried about whats in the constitution?

check for pod fragments, what have they done with our politicians?
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3) Rep. Stahl's "no vote explanation" [by Admin003 on November 9, 2007]
Rep. Stahl, having reserved the right to explain his protest against the passage of the bill, made the following statement:

"Mr. Speaker and members of the House:

I voted no on this bill because there was clear support via 34 signatures for an amendment and the Speaker failed to recognize them, this is a violation to the Constitution of the state of Michigan, not allowing the voices of many Michigan citizens to be heard, denying the democratic process of our republican government in Michigan."

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4) Rep. Shaffer's "no vote explanation" [by Admin003 on November 9, 2007]
Rep. Shaffer, having reserved the right to explain his protest against the passage of the bill, made the following statement:

"Mr. Speaker and members of the House:

NO VOTE on 5408

I voted no on this bill because there was clear support via 34 signatures for an amendment and the Speaker failed to recognize them. I believe that this was contrary to the Joint Rules of the House."

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5) Rep. Moss' "no vote explanation" [by Admin003 on November 9, 2007]
Rep. Moss, having reserved the right to explain his protest against the passage of the bill, made the following statement:

"Mr. Speaker and members of the House:

I voted NO on HB 5408 because there was sufficient support for an amendment with 34 signatures and the Speaker refused to recognize them, which is against the Constitutional Rules of the House.

I opposed the Service tax, I voted no on it last September. I would be happy to eliminate it right now. However, I will not just take a bad tax burden off some businesses and load it onto someone else. We need to eliminate the Service Tax and pay for it by reform of government operations."

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6) Rep. Calley's "no vote explanation" [by Admin003 on November 9, 2007]
Rep. Calley, having reserved the right to explain his protest against the passage of the bill, made the following statement:

"Mr. Speaker and members of the House:

While I supported portions of this bill, specifically the repeal of the service tax, the structure of the MBT changes were not in form that I could support. The surcharge method of taxation added an unnecessary step to an already complicated tax code. Additionally, the dollars required to accommodate the $2,000,000 cap would be better spent providing tax credits for investments in Michigan and Personal Property Tax relief. Finally, this increase, along with all other forms of taxation, should include a sunset or rollback provision of the additional liability."

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7) "no vote explanation of" [by Admin003 on November 9, 2007]
Reps. Caswell, Robertson, Nitz and Agema, having reserved the right to explain their protest against the passage of the bill, made the following statement:

"Mr. Speaker and members of the House:

NO VOTE on 5408

I voted no on this bill because there was clear support via 34 signatures for an amendment and the Speaker failed to recognize them."

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8) "no vote explanation of" [by Admin003 on November 9, 2007]
Reps. Palmer and Knollenberg, having reserved the right to explain their protest against the passage of the bill, made the following statement:

"Mr. Speaker and members of the House:

I have voted no on this bill because while I support the repeal of the services tax, I cannot support a surcharge on the MBT. I believe that the bill should simply repeal the tax and the legislature should make up the difference through spending reductions, and structural reforms in both the budget and the operations of government, as we should have from the beginning of the year."

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Received in the Senate on November 20, 2007. Passed in the Senate (20 to 16) on November 20, 2007. New Comment

1) What On Earth [by Anonymous Citizen on November 26, 2007]
makes you mental midgets think that you can steal money from the good folks still left in this state? The service tax is stealing, adding 13% or so to other overtaxed businesses in michigan will not help our state. Don't you people understand that all taxes are paid by the guy at the bottom? Let me splain it Ricky, if you jack up taxes on any business they just add it to their price, then the consumers (tax payers) cut back on purchases and all you folks at the public teat think that you need to raise the taxes to get the revenue you lost from jacking up the taxes last time. If this is too hard for you to understand I suggest that you go apply at walmart but you better go quick before they leave this state. Cut out the service tax and learn to get by with what you have left. Oh, you say you will have to cut, start cutting like we have all been doing.
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2) Sen. Cropsey's "journal statement" [by Admin003 on November 21, 2007]
Senator Cropsey's statement is as follows:

I find it interesting some of the comments that have been made. The service tax, or the tax on services, was obviously proposed by the Governor. It was a bill that came out of the House of Representatives. It was supported by almost every Democrat in the House of Representatives, opposed by almost every Republican in the House of Representatives, and the same thing happened over here in the Senate. It was a tax that the Democrats uniformly supported, except for one. I believe that it was a tax that the Republicans uniformly opposed, except for two or three of us, and it was signed by the Democratic Governor. The service tax is a Democrat tax, pure and simple.

It is also a tax that the business community hated. People hated it. It was a new tax. Everybody knew that once it was implemented as a brand-new tax that whenever the government decided it could not control its spending, as it has not been able to control its spending now for several years, then they would keep expanding the tax to bring in new people all the time. It was a tax that needed to go. The fact is, I want to commend the Finance Committee for holding a hearing this last week; having a good hearing which the business community came in and mentioned vehemently that this tax needed to go.

I wanted to thank the Senators from the 25th and 28th Districts for coming up with a very good alternative on this that we have just sent back over the State House of Representatives today. Obviously, the service tax was going to have a devastating effect upon the business community, upon the job providers of this state. One thing we don't need to do is drive more job providers out of this state. The fact is, this tax was so bad that even though the Governor had proposed it and signed it, the Governor has wanted to have it eliminated. Even though it passed with almost unanimous support from the Democrats in the House of Representatives, they have seen the error of their ways. They have passed legislation over here to eliminate that service tax. We passed legislation back eliminating the service tax.

Now there are changes and differences between the House and the Senate. But, yet, obstructionists on the other side are saying they don't like the idea of conference reports. That's part of the process. Let's be grown-up. We know we've been around here for a long time and that the way you settle differences between the two bodies is you go to conference committee reports. That is what we are doing. It is unfortunate that the House of Representatives is not here today so that we can have the conference committee meet right away and go into serious negotiations on how we are going to get rid of this dreadful, dreadful service tax. I don't think the idea of attacking the idea of conference committees is the way to do that.

By the way, I just wanted to say to everybody, happy Thanksgiving. Isn't this a great country where we can come together, disagree, debate our disagreements but yet still walk away as friends and as a civil government? It's a government in which, yeah, we did have our disagreements and we do have our disagreements, but yet it is a free country and, boy, it's wonderful to live in a free country where can do this and not be settling things at the end of a gun because we don't like another person's ideas. I am very thankful to God for living in a country as great as this one is

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3) Then tell me Sen. Cropsey: what took you so long? [by Jennybegone on December 3, 2007]
Then tell me, Sen. Cropsey, what took so long?

The politics of statesmanship has been replaced by the politics of brinksmanship. Both the Republicans and Democrats held the whole thing hostage, not willing to compromise to get a good bill passed that would call for reforms while at the same trying to continue helping the state raise money and provide services as painlessly as possible.

Michael Moore should do a movie on all of you for scuffling at work, not doing your job until it becomes absolutely necessary. You only work as hard as you have to. I don't always agree with Moore, but he would expose you legislators for what you are.
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4) Sen. Basham's "journal statement" [by Admin003 on November 21, 2007]
Senator Basham's statement is as follows:

There's been a lot of comments from both sides of the aisle about what this solution does or doesn't do to fix Michigan's business woes; if we'd acted on House Bill No.5408 as it came to us. There were some comments about how it hurts businesses, and in reading my analysis in support of House Bill No.5408, it says the Michigan Manufacturers Association supports it; Detroit Regional Chamber supports it; the Grand Rapids Chamber supports it; the Insurance Institute of Michigan supports it; specifically, Ford Motor Company, General Motors, Chrysler, AT&T, Meijer, EDS, Kellogg's, Herman Miller, Alticor, Dow, Whirlpool, Delphi, Strategic Staffing Solutions, Northwest Airlines, Amerisure Insurance, AAA, Steelcase, Guardian, Jackson National Life Insurance, Auto-Owners Insurance--they all support House Bill No.5408 the way it was presented to the Senate. The only opposition I see here to that House bill on my paper, it says the Michigan Chamber opposes it.

So I would ask my colleagues who want to work together, maybe you should tell the Michigan Chamber that they should work with members of this chamber, both the Democratic and Republican side of the aisle, because, certainly, there are a lot of businesses who support House Bill No.5408 as it came to this chamber.

The majority party in this chamber talks about working together. The majority party needs to talk with minority members of this chamber to come up with a solution to our budget woes. If we continue to do one-time fixes, shifts, and raids of restricted funds, it's not in the best interest of the state of Michigan. This chamber raided $70 million out of the revolving petroleum fund. That was a restricted fund. Just today, I read a survey that concluded that Michigan per capita spends less money than any other state on environmental issues.

We're going down a road, my friends, and it's a road that we should not be so proud of. We talk about working together. We should actually come together, work together, come up with a solution, and go home and enjoy our families. I would encourage members on both sides of the aisle to work together to come up with a reasonable solution.

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5) Sen. Cherry's "journal statement" [by Admin003 on November 21, 2007]
Senator Cherry's statement is as follows:

I rise today to express my disappointment that we once again did not solve the problem, but instead we delayed this issue. On Tuesday, as was stated, the Treasury Department will be sending out notices to all businesses within the state of Michigan because we did not finish our job today. Those businesses are going to be very confused, and they are spending, I think the tag that I saw last week was something like $14 million just a day to get ready for implementation of the service tax. So while we are talking, they are spending money trying to figure out how to comply with something that may or may not exist on December 1. So I am very disappointed that we could not solve this problem today and instead have shifted it.

To the Senator from Oakland County the 13th District, the conference committees that we had for our budget shut people out. They did not bring people together. There were conference committees that dealt with only one or two people solving a problem. House Bill No.5408 actually brought a large group of people together, they took testimony, and they took time in committee to come up with a solution that was comprehensive in nature. The conference committee by the nature of it includes very few people; they do not have to talk to anybody else to solve that problem. They simply need to figure out a solution that they think can get passed. It is not the best procedure for solving a problem.

Today was the best procedure for that, I think, where we could have all come together in a bipartisan fashion. I'm very disappointed that we did not do that.

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6) Sen. Cherry's "journal statement" [by Admin003 on November 21, 2007]
Senator Cherry asked and was granted unanimous consent to make a statement and moved that the statement be printed in the Journal.

The motion prevailed.

Senator Cherry's statement is as follows:

I think that this substitute is a very good solution to a problem that we are facing now. It again brings us very close to the original House version. It raises the cap and lowers the surcharge, which is what I heard in testimony over in the Finance Committee last week as being a problem.

I think that, again, as I said earlier, it is a solution with a Senate fix on it. It is bipartisan in nature. We can all easily support this and go home knowing that we have fixed a very serious problem without extending it into the future. It also is very important because it fully replaced revenue and it replaces that revenue permanently.

I ask that members support it.

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7) Sen. Schauer's "no vote explanation" [by Admin003 on November 21, 2007]
Senator Schauer's statement, in which Senator Clark-Coleman concurred, is as follows:

Colleagues, this was a special, unprecedented Thanksgiving week session, and I'm sure the Republican majority envisioned a headline something like, "Senate repeals service tax - helps Michigan business." Well, it didn't quite work out that way.

I voted "no" on the Senate-passed version of House Bill No.5408 because it does not repeal the service tax, which by law is slated to go into effect December 1. This bill, colleagues, actually removed the service tax repeal as passed by the House.

I also voted "no" because this bill actually hurts Michigan-based companies. This bill which passed with the minimum number of votes in this chamber and along purely partisan lines will cost Michigan business investments and jobs. This unfortunate partisan stab at dealing with Michigan's tax structure by the Republicans is dead on arrival, unacceptable to the House and unacceptable to our Governor. This partisan legislation is a setback to individuals and businesses hoping to see the service tax not take effect.

Now, ten days before the December 1 effective date, the State Treasurer must now send out new tax forms for this new service tax. If I was a Michigan-based company facing investment decisions, like Kellogg Company in my own district, I'd be scratching my head wondering what the heck is going on in Lansing. This is serious business, colleagues. I voted "no" because this bill hurts Michigan's economy. I am not willing to do that nor, colleagues, should you.

Finally, I voted "no" because along party lines Republicans just voted to cut $300-400 million out of the state's budget, which will hurt Michigan's families, our schools will raise tuition for college students, throw people off of health care, and cut police and fire fighters in our own communities.

To the Senator from Oakland County from the 13th District who spoke about process, you're fiddling and Rome is burning. You're game playing and posturing while Michigan is in crisis. So the real headline today should be, "Senate fails Michigan businesses - puts state's future at risk." That's why I voted "no."

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8) Sen. Jacobs' "no vote explanation" [by Admin003 on November 21, 2007]
Senator Jacobs' statement is as follows:

It's really tough to serve in Michigan now. We've got a really tough job to do. Times are tough. We've got to make very tough decisions. To be honest, I was so excited about coming back to work today because I've been spending a lot of time in the district, as I'm sure all of have done this past week, talking to business owners--small business owners, medium-size business owners; I did a cable show with one of my chambers of commerce--and the businesses were crying out for explanations and relief and solutions. I came here today fully expecting to provide those solutions tothe businesses in my district, and I feel that we've let the folks down in our districts by not moving forward, particularly with the Prusi substitute. This is my "no" vote explanation that we really did not do the work that the business owners wanted us to

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9) Sen. Gleason's "no vote explanation" [by Admin003 on November 21, 2007]
Senator Gleason's statement is as follows:

I would like to offer some remarks in regard to the action that just transpired. As I mentioned a week and a half ago, we were all predetermined as either a man of means or not of means. In my short time here in the Senate, we have consistently addressed issues and readdressed them and readdressed them even further. We talk today about a complicated issue and easy results that could redefine and redistribute the treasury of this state into much-needed programs. A short while ago, we were accused of raising taxes as a Democratic Caucus, yet today we had the will--some of us in the chamber--to raise them three-quarters of a billion dollars just a moment ago.

The issue before us should not be about who wins or loses the political debate, but what is going to be provided for the families of Michigan. Mr.President, we are having difficult times in this state. We're having a difficult time trying to measure what tomorrow will be offering and what obligations the businesses that provide the revenue of our state will be facing. There is great uncertainty now. We have marched through nearly another calendar year, and yet, those who will be asked to pay taxes, fair taxes on their business dealings, still do not have an answer.

Thanksgiving is now upon us. Another weekend, another holiday is going to transpire and once again the Michigan businesses will not understand what their tax obligations are going to be. I have had personal friends who have gone out of business in Michigan in recent times because they did not understand what their tax obligations were going to be.

We had a chance today to pick up where the House left off, asking us to offer a responsible tax policy for the businesses here in Michigan. Many of you have communicated with theses businesses, as I have, saying that they would accept this new tax burden, yet we're going to leave here today with a huge question mark once again over the businesses across the state of Michigan.

Now we're going to be hitting them pretty soon and it's going to be a 15-round hit again, late into the match to determine what their tax obligations are going to be. We do have a remedy. The House was very diligent in offering us a resolution to the state tax and treasury and revenue obligations. We should have taken that opportunity. One of the greatest hurdles any of us have as individuals or as businesses is the undecidedness of what our actions will require.

Once again, we come down to Lansing and we're going to go home this afternoon and not offering to share what the tax obligations of our businesses are. That's what the biggest question is: How do you make accommodations to pay your tax obligations? Not necessarily what they are, but how and by what means you are going to be afforded to pay them and when they are going to be due. December 1st is now right in our midst. I sat here as a first-term Senator, and nearly 11-months I have served down here. We have charged ahead and we've retreated. We've charged ahead and we've retreated again on these policies that will determine the tax obligations of our businesses.

I'm not pleased with how we do our business down here. So, Mr.President, I would ask that we undertake the obligations that we have been honorably disposed to do and make sure that we give an understanding to our businesses--big, medium, and small businesses. I received a letter, as you did, too, from the Chamber of Commerce organizations here in Michigan, saying that this was an acceptable means. The House policy that was presented to us was a measurable means. We should have utilized that today and sent the businesses a message that we were willing to do their work and that we would fulfill the obligations as legislators to provide the policy-making decisions that is ours.

I had to vote "no" because we did not give them a conclusion today, as we have not given them for eleven and a half months.

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10) Sen. Prusi's "journal statement" [by Admin003 on November 21, 2007]
Senator Prusi's statement is as follows:

In essence, I concur with the previous two speakers, but I would like to add another reason why I could not bring myself to vote for the substitute for House Bill No.5408. I am disappointed that once again we've put partisanship and political game playing ahead of good public policy. We've turned this into just some more of the "gotcha" politics of who is voting for what, instead of actually sitting in a room with the House, with the administration, with the Treasurer, with the Senate Democrats and Republicans all in one room talking about good public policy and a long-lasting fix.

We embarked on this road of twisting and rewriting policy that we've struggled with all year, and I think it is a bad precedent to be set because it was set earlier in this session. I am just disappointed that we cannot find the political will to come together and find a solution that matters to everybody, that meets the needs of our employers, both big and small, as well as the citizens who sent us to this town to legislate on their behalf.

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11) Sen. Switalski's "no vote explanation" [by Admin003 on November 21, 2007]
Senator Switalski's statement, in which Senators Jacobs and Clarke concurred, is as follows:

I can understand why the majority wanted to cut off debate because I'd be embarrassed, too, if I'd just put forward a plan that was fiscally irresponsible, that used one-time money, and put Michigan back into deficit spending and a chronic budget deficit. So I can understand why they didn't want to talk about that very much.

There were two alternatives that I voted for that would have been a much better solution. One was the bill as passed by the House. We also made a change to it with the Prusi amendment and offered an alternative. Both of those were fiscally responsible, and they did not use one-time money. They were fiscal approaches that would continue over years and keep us out of fiscal problems. But the majority has chosen to do the irresponsible thing and raid the piggy bank, spend all our savings, and leave us bereft next year.

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12) Sen. Cherry's "no vote explanation" [by Admin003 on November 21, 2007]
Senator Cherry's statement is as follows:

I voted "no" because I believe that the substitute for House Bill No.5408 causes more problems than it solves. It does not replace revenue, it hurts job creation in this state, and it opens up the MBT, before it has taken effect, for majorrewrites. I think the perfect solution was House Bill No.5408 as passed by the House. Since we did not pass that version and passed a version which is more harmful and causes more problems, I voted "no."

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Received in the House on November 20, 2007. Passed in the House (57 to 44) on November 28, 2007. New Comment

1) Rep. Nitz's "no vote explanation" [by Admin003 on November 29, 2007]
Rep. Nitz, having reserved the right to explain his nay vote, made the following statement:

"Mr. Speaker and members of the House:

I voted no on HB 5408 because this bill was passed without giving me the ability to read the bill. This bill was placed on the board for a vote without any debate or explanation to what the practical applications of this bill are. This bill includes an unnecessary tax replacement while there was an alternate plan introduced by Republicans. House Republicans offered a detailed list of government reforms and cost-saving measures that would have allowed the state to repeal the service tax without raising taxes in other areas. The Democrats are playing games and have adjourned until well after the deadline for a fix, forcing the Senate to accept the House's flawed, late-night legislation once again."

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2) "no vote explanation of" [by Admin003 on November 29, 2007]
Reps. Opsommer and Booher, having reserved the right to explain their nay vote, made the following statement:

"Mr. Speaker and members of the House:

I voted no on HB 5408 because this bill was passed without giving the minority party the ability to read the bill. This bill was placed on the board for a vote without any debate or explanation to what the practical applications of this bill are. This bill includes an unnecessary tax replacement while there was an alternate plan introduced by Republicans. House Republicans offered a detailed list of government reforms and cost-saving measures that would have allowed the state to repeal the service tax without raising taxes in other areas. The Democrats are playing games and have adjourned until well after the deadline for a fix, forcing the Senate to accept the House's flawed, late-night legislation once again."

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3) Rep. Caswell's "no vote explanation" [by Admin003 on November 29, 2007]
Rep. Caswell, having reserved the right to explain his nay vote, made the following statement:

"Mr. Speaker and members of the House:

I voted no because I had no time to read the bill before the board was closed. Also no debate or questions were allowed."

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Received in the Senate on December 1, 2007. Passed in the Senate (33 to 4) on December 1, 2007. New Comment

1) michigan???? [by Anonymous Citizen on December 6, 2007]
To all of you that voted her back into office, how can you justify your vote now. The state has been crippled even more, if possible. Businesses have been hit with this joke of a surcharge instead of fixing the real problems. I guess you all have forgotten who employees the citizens of Michigan, the businesses you just ran out of town. You think finding jobs was difficult before, well you haven't seen anything yet. The same business that also pays a large portion of taxes to this state, but a lot of them will now give that tax money to a different state. All of you women or men that voted for a women just because she was a women, you should have stayed home and not voted at all. The problems start at the top, the government.
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2) Unbeleivable [by Anonymous Citizen on December 3, 2007]
I'd say RECALL, but there will not be any voters left in the state. Or if there are they won't be able to afford the gas to get to the polls since our fuel "surcharge" tax makes our gas more expense than surrounding states. Of course you can't sell your house to move because of the housing market and foreclosure rates, but my property tax bill comes in the mail, value is down but tax is UP UP
I think you folks need a reality check----mine bounced!!!!
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3) hmmmm [by Anonymous Citizen on December 3, 2007]
But you knew this was coming Senator Brater, didn't you? I live nowhere near Lansing and have no inside information like you do senator, and still knew this vote was inevitable. Nice sidestep to your "Keep the Service Tax" vote.
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4) Time to retire and Move! [by Anonymous Citizen on December 2, 2007]
Thank you Michigan Government! Time to retire and go to a new state. Hope you can take care of all my patients. Wait, I think my patients will be moving also. Time for a Change.
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5) it's long past that time... [by Anonymous Citizen on December 2, 2007]
now is the time to stock up on ammo and provisions.
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6) Silent members? [by Anonymous Citizen on December 1, 2007]
Where are the comments from larry moe and curly?
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7) 3 stooges [by Anonymous Citizen on December 1, 2007]
Just wait, with term limits, they are there somewhere, they just haven't figured out the internet yet.
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8) don't be so hard [by Anonymous Citizen on December 1, 2007]
The 3 stooges would have figured out a resolution by now
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9) Sen. Cassis' "no vote explanation" [by Admin003 on December 1, 2007]
Senator Cassis' statement is as follows:

I voted "no" on the four year '08 budgets above 2.1percent projected rate of inflation, and "no" on growth of overall general fund increase in spending of 8.2%. I voted "no" against the service tax. The surcharge represents a 22 percent tax increase on Michigan's smaller and medium-sized businesses, and shifts a larger proportion of tax burden to them.

I authored the repeal of the service tax, Senate Bill No.838. On November 20, I voted for a 14% MBT surcharge tie-barred to the repeal of the service tax, Senate Bill No.838, and a three year hard date sunset.

This morning, December 1, I voted against a 22% MBT surcharge, an almost 8 percent increase, that will be in place for 10 years, the biggest overall tax increase in a generation. No meaningful reforms, no budget reductions, occurred as a result of House Bill No.5408. In my opinion, House Bill No.5408 says, "Yes to some pork, yes to more spending, $119 million left in the BSF, and somewhere around $150 million lapsed funds."

The original MBT will be more than just revenue-neutral and now compounds the MBT with a 22 percent surcharge. How does this advance Michigan's competitiveness with other states that have no surcharge? While the service tax represents poison that would kill businesses, the 22 percent surcharge just leaves them maimed. The service tax, brought to us, as was said, in the wee hours of the morning, has now been morphed into the emperor's new clothing in the garb of a "shift and shaft" surcharge tax.

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10) Sen. Brater's "no vote explanation" [by Admin003 on December 1, 2007]
Senator Brater moved that the statement she made during the discussion of the Senate substitute be printed as her reasons for voting "no."

The motion prevailed.

Senator Brater's statement is as follows:

It is 4:45a.m. Saturday morning; the public is asleep. About a month ago, we were in this chamber at the same time passing what was supposed to be a correction to an ongoing budget problem. Now we are back here doing the same thing again in the middle of the night. Those of us on the Democratic side came in here a couple of minutes ago, were told what was negotiated, and now we're being asked to vote.

I do not want to go home and take those phone calls again from my constituents that say, "Why did you do this in the darkness of night? Why didn't you have deliberations and let the public have their input?" I just protest this procedure, and for that reason I can't support it

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Received in the House on December 1, 2007. Passed in the House (66 to 42) on December 1, 2007. New Comment

1) Interesting [by Anonymous Citizen on December 4, 2007]
tate Budget Priority: Preserve Business as Usual

(Note: A shorter version of this commentary appeared in The Detroit News on Nov. 8, 2007.)

For the past year, the public was told that even with nearly $1.4 billion in new state tax hikes, severe cuts would still be required to "balance the budget." Surprise! The "deficit" turns out to have been a gap between expected revenue and the level of desired additional spending. The state will spend $900 million more this year than last, most of which is from state taxes and fees. The following items from the just-passed budget illustrate the overall pattern:

* Total prison spending will be $2.01 billion, compared to $1.94 billion enacted last year.
* The Department of Labor and Economic Growth will spend $1.30 billion, compared to
$1.23 billion enacted last year.
* $1.89 billion will be spent on universities, compared to $1.79 billion enacted the previous year.
* The Department of Community Health will spend $12.05 billion, compared to $11.02 billion enacted last year.
* The Department of Human Services (Welfare) will spend $4.59 billion, compared to
$4.47 billion enacted last year, and the department will gain 171 new employees.

There were a few cuts: Government arts grants will fall by $2 million, four prison facilities will close and a juvenile justice facility will downsize, to name a few. An attempt to contract out the state’s foster child and adoption services to private social service agencies will be implemented to some degree, but much less than was hoped for.

That half-a-loaf foster care reform is a good example of how the political establishment’s priorities are misplaced. Despite bipartisan recognition that money could be saved and better outcomes realized for children from troubled backgrounds, what appeared to trump everything else was the possibility that outsourcing could replace some 800 government workers. The same calculus has stymied every recent effort at bringing about transformational government restructuring, from prison privatization to devolving State Police road patrols to less costly county sheriffs.

The debate over these reforms is not ideological. Neither liberals nor conservatives benefit from paying corrections officers wages that an American Federation of Teachers survey shows are almost one-third above the national average for corrections employees.
The education of children is not advanced by granting school employees benefits so extraordinary that even a state panel chaired by former Govs. Jim Blanchard and William Milliken suggested they be scaled back. The public is not served by a budget that includes $150 million for raises to state workers —members of a class that on average already earns substantially more than Michigan residents in the private sector, even in many apples-to-apples job comparisons.

And Michigan’s economy is in serious trouble. Between 2001 and 2006, the real per-capita personal income of residents fell by 0.9 percent; nationwide, it rose by 5.3 percent.
The state’s inflation-adjusted gross domestic product actually shrank last year, and our
7.7 percent unemployment rate is the nation’s highest. Most sobering of all, there are indications that Michigan’s population may be beginning to fall, as has been happening in Detroit for several decades.

Michigan has become a poor state — and compared to the rest of the country, it’s getting poorer.

One would expect state government’s top priority to be finding ways to do more with less and make Michigan a place that encourages entrepreneurs and investors, rather than drives them away. However, the just-concluded budget saga demonstrates that the real priority is to preserve the government status quo, quite literally at all costs.

This raises a disturbing question: Who runs state government? Most people would answer "the governor," or "the Legislature," but lawmakers are beginning to look like the agents of a very different set of bosses — the state’s public employee unions. Michigan residents may not be aware of the powerful pressure these unions brought to bear in Lansing over the past year; those of us in Lansing saw it regularly in loud demonstrations, e-mail campaigns and uncompromising letters to legislators. When the governor announced her budget back in February, public-sector union members in T-shirts were already handing out fliers supporting tax increases as an alternative to budget cuts.

There are now indications that lawmakers may postpone some of the tax hikes passed a month ago. This is promising only if lawmakers genuinely reduce spending to lighten the burden on the residents they serve — not just obsess on the hardships that may be faced by public servants.

#####

Jack McHugh is senior legislative analyst for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.

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2) In Defense of Our Governor [by beverlytran on December 3, 2007]
I speak strictly with a non-partisan tongue when I say the position of State Chief Executive Officer has been stripped mined of authority. Inheriting a position that has had its authority involuntarily abjucated by Act 431 of 1984, et seq.in time... to transfer authority to "insubordinate" department heads, I do not see the justification of defamation for elected officials. I solely place the blame on citizens.

Perhaps, the state could utilize a portion of the new "strip mining" tax to fund civic education.

Beverly Tran
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3) "...To avoid spending cuts" [by beverlytran on December 3, 2007]
It utterly amazes me how, with the presentation of GAGAS state auditor general reports of the highest quality (I state with the utmost bias) that our sophomoric legislatures prefer to support the political etiquette of paying off "hush money" instead of remaining strong and slashing phantom programs of DHS.

This "hush money" focuses on the pending federal litigation in June of 2008. Pump more of the General Fund into DHS CPS to satisfy deficiencies of human services and violations of civil rights. Rumor has it that state negotiations ceased when the number hit $500,000,000.00. But what do I know...

(To the tune of "Fiddler on the Roof") "If I had a red pen"... I am not only an impoverished econometric policy analyst; I survived phantom policies of DHS. Perhaps, I should one day run for office...

Beverly Tran
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4) That flushing sound ... [by Mike Hignite on December 3, 2007]
... you hear is Michigan business going down the drain.

Yes, the repeal of the stupidiest tax of all time is something to be proud of.

Yes, the 22% increase of the second stupidiest tax of all time is something to be ashamed of.

Jenny, explain to me again how these toggling tax increases and the ultimate failure to reign in state spending attracts businesses to Michigan? Is it because business people are attracted to the excitement of guessing how and what you are going to tax next? Nothing is more fun than wondering if you will be able to continue in business next year, or if you might just survive one more quarter.
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5) Rep. Robertson's "no vote explanation" [by Admin003 on December 2, 2007]
Rep. Robertson, having reserved the right to explain his nay vote, made the following statement:

"Mr. Speaker and members of the House:

I voted 'no' on the substitute for HB 5408 because it replaces a damaging tax with another damaging tax. Michigan has the worst economy in the nation and this plan will do nothing to help it. It will not create one new job or stop one home foreclosure. This tax increase was not necessary. The FY08 budget included $760 million in increased spending. Additionally, House Republicans have introduced reforms to eliminate our budget gap without additional taxes, but these proposals have been ignored by Democrat leadership in the governor's office and House of Representatives. Let me make my position clear. I opposed the expansion of the sales tax on services when it passed this House two months ago. The sales tax on services should never have become law in the first place. Obviously, I support its repeal. My attempts and those of my Republican colleagues to repeal this tax without increasing taxes elsewhere was procedurally denied a vote in this House through what I believe to be unconstitutional means. In light of this recent history and the real damage this new tax will do to our state's economy, I am compelled to oppose this legislation."

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6) Rep. Sheen's "no vote explanation" [by Admin003 on December 2, 2007]
Rep. Sheen, having reserved the right to explain his nay vote, made the following statement:

"Mr. Speaker and members of the House:

I voted 'no' on the substitute for HB 5408 because it replaces a damaging tax with another damaging tax. Michigan has the worst economy in the nation and this plan will do nothing to help it. It will not create one new job or stop one home foreclosure. This tax increase was not necessary. The FY08 budget included $760 million in increased spending.

I support the repeal of the services tax and the tax on business-to-business transactions which was applied arbitrarily on top of all the other taxes still in place. However, I cannot support the new Michigan Business Tax (MBT) and the surcharge which is attached to it. The MBT is still a gross receipts tax and still contains the Personal Property Tax which penalizes businesses investing in their business to produce jobs. Every state around us has gotten rid of their Personal Property Tax. We are the only state in the Midwest which has not eliminated it. Michigan must fundamentally change its taxation system, if it ever hopes to become competitive."

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7) Rep. Knollenberg's "no vote explanation" [by Admin003 on December 2, 2007]
Rep. Knollenberg, having reserved the right to explain his nay vote, made the following statement:

"Mr. Speaker and members of the House:

I voted 'no' on the substitute for HB 5408 because it replaces a damaging tax with another damaging tax. Michigan has the worst economy in the nation and this plan will do nothing to help it. It will not create one new job or stop one home foreclosure. This tax increase was not necessary. The FY08 budget included $760 million in increased spending. Additionally, House Republicans have introduced reforms to eliminate our budget gap without additional taxes, but these proposals have been ignored by Democrat leadership in the governor's office and House of Representatives."

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8) Rep. Agema's "no vote explanation" [by Admin003 on December 2, 2007]
Rep. Agema, having reserved the right to explain his nay vote, made the following statement:

"Mr. Speaker and members of the House:

We can not ask the people or the businesses of the State of Michigan to pay more in taxes when there was no attempt to restructure and reduce spending in State budgets. All taxes are ultimately paid by the end consumer and tax payer in the price of increased goods and services. The government is out of control with spending. This bill will not attract one business to this State. You can't tax this State into prosperity. HB 5408 makes no economic sense for this State- cuts do!"

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9) Rep. Garfield's "no vote explanation" [by Admin003 on December 2, 2007]
Rep. Garfield, having reserved the right to explain his nay vote, made the following statement:

"Mr. Speaker and members of the House:

I can not vote to justify a 22% Tax on the Business Tax. The Service Tax should not have passed or even been considered to justify over spending for a budget. When we did nothing to address the 1.7 billion dollar Structural Deficit we will revisit in a matter of months. Plain and simple,. were overspending. This equates to not only a 1.9 Billion dollar SBT replacement, but an increase to 2.6 Billion dollars. Not including the Income Tax increase."

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10) Rep. Palmer's "no vote explanation" [by Admin003 on December 2, 2007]
Rep. Palmer, having reserved the right to explain his nay vote, made the following statement:

"Mr. Speaker and members of the House:

I have voted NO on this bill because while I very strongly support the repeal of the services tax, a major 'job-killer' and unacceptable burden on all businesses in the state, I cannot support a 22% surcharge on the MBT. This new tax would be an outrageous 'penalty' for doing business in Michigan for the next ten years, particularly the small to intermediate size businesses that are the back-bone of our state's economy. I believe that the legislature should simply repeal the tax, along with the recent increase in the income tax, with no replacement whatsoever, and that the legislature should make up the 'difference' through both spending reductions, and structural reforms in both the budget and the operations of government, as should have been accomplished at the beginning of the year. Further the language in this bill that attempts to make the legislation 'referendum proof' is an outrageous attempt to subvert the will of the people of this state, and should be resoundingly rejected."

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