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2007 Senate Bill 511: Balance 2006-2007 budget

Public Act 278 of 2008

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1) "no vote explanation"  by Admin003 on May 10, 2008 
Rep. Rocca, having reserved the right to explain his nay vote, made the following statement:

“Mr. Speaker and members of the House:

Unfortunately, once again, a substitute version of the legislation was provided to members of the House of Representatives literally after the voting board was opened to take a record roll call vote for final passage, giving the members of this body inadequate time to review the content of this spending bill. While I may, in fact, support many of the items contained in this budget, I find it difficult to agree to spend hundreds of millions of the taxpayers’ dollars without first being allowed to review how that money will be spent.”

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2) "no vote explanation"  by Admin003 on May 10, 2008 
Rep. Agema, having reserved the right to explain his nay vote, made the following statement:

“Mr. Speaker and members of the House:

SB 511 in it’s original form separated out the airport funding so that the people of the state of Michigan could take advantage of the $9 of Federal money for every $1 of state money. This substitute bill was an attempt by the democrats to force excessive spending at a time when we can least afford it. We will lose out on Federal money because of partisan politics. This is further evidence that the airport funding should be in the transportation budget so that the Governor can not use this leverage to put out partisan pork.”

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3) "no vote explanation"  by Admin003 on May 3, 2008 
Senator Switalski’s statement is as follows:

I would concur in the remarks of Senator Cherry. I am very disappointed that you try to work with people and try to work something out and then you ask what is actually in the amendment that is just handed to you—the substitute—and there is no explanation. We have no time to offer an amendment, and it’s unfortunate. It’s hard to deal with that. But I’d like to offer my “no” vote explanation and I would remind members of the chamber that we just passed a capital outlay bill just last year and the vote was, I think, one “no” vote. It was like 33-1 or something in this chamber. What has happened since then? Wall Street has approved our resolution of our structural deficit problem, and our annual billion-dollar-plus deficits are gone and the national economy is teetering on recession, but we are relatively stable in the state budget.

The government’s role is to stimulate the economy during downturns, and we have no budget deficit right now. We are arguing over a surplus and how much we should increase higher ed and K-12 and other state functions. In this environment, this capital outlay bill would help stimulate our economy and help stimulate a recovery. We have a lot more money right now than we did when we passed the previous capital outlay bill, and it seems like this would be a good time to do this.

But what we have in front of us takes out all the projects, apparently, because I haven’t had a chance to review it, and no questions were answered about it to reassure me exactly what is in there. If we go back to February of this year, the Governor has proposed a capital outlay bill, in essence, reversing ourself from the time she had vetoed the one that we had passed at the end of last year and had proposed capital outlay spending. The Legislature had looked at that and evaluated it and found a few flaws. We’ve been talking about those flaws for the past three months. One of those flaws was, “Gee, not all the projects are in the bill. In fact, it seems like there are a lot of projects in Dem areas and not enough in Republican areas.” So we listen to that and we thought, “You know, that might be a fair criticism. Let’s see if we can find a more evenhanded bill.” We proposed and the original version of Senate Bill No. 511 that came over from the House had everyone’s project in—all Republican and Democratic projects. There was a second objection, which was the bond cap was going to have to be raised and it was time to raise that bond cap. We said, “Well, we don’t really want to raise the bond cap.” And we found a way to accommodate all of the projects over a series of years to stay under the bond cap and to not require a raising of that cap. So on the two principal objections, we found a way at the suggestion of one of my good Republican colleagues of phasing it in over three years and accommodating that.

We went to the institutions and said, “Give us your top priority. Nobody gets more than one.” That was all put into the bill. Now, people who are fiscally conservative and careful about our money have worried about the bond cap and raising that bond cap. We addressed that by not raising it, but then they worried about our debt service. Our debt service would be less than it was in 2003, before we raised taxes when we had more money. Our debt service is the lowest it has been since 1997—for eleven years. As you know, when we do capital outlay projects, the universities and colleges have to spend their money first before the state kicks in its portion. In fact, the state wouldn’t have any outlays until probably 2011 before we’d have to start contributing. So it’s not a budget impact in this year or the year after or until 2011 before it begins. What do we get for that? We get a huge stimulus to our economy. We get tradespeople and construction workers who are laid off and drawing benefits and unemployment. We’d get them instead paying taxes. We get the benefit of science and technology buildings and nursing program building expansions that would actually train people to get jobs that are available and unfilled—to fill shortages in this state.

About $125 million falls off our debt service each year and this would be falling off and keeping us under the cap. We’d actually have a cushion. So we could have done all these projects and not put ourselves into a difficult position. I think it would have been very wise to do that. The universities normally pay 25 percent match to our 75 percent, and in this bill, because of a $40 million cap, universities are paying about 78 percent on average. The Big Three—U of M, MSU, and Wayne State—would be putting in $100 million when the state is putting in $40 million. We get a huge benefit—huge stimulus—that we are not paying for. We’re leveraging those university dollars; so again, another good reason to do it.

I would just pose one question to members and it deals with your vision of the future. To clarify your vision, I would say, would you ever tell your child, “Hey, don’t take out a student loan. Don’t go to college. The economy is bad and it might be tough getting a job. Don’t go into debt to get your education.” I don’t think any of us would tell our child that. It speaks to the essence of our economic problem today. It’s a crisis of confidence. The credit market is afraid to lend. Consumers are afraid to buy, and the banks are afraid of foreclosures. This makes everyone unwilling to act, and it brings about a recession. People are afraid to make any kind of move.

So what is the role of government in this situation? I would suggest that in such a crisis, it is the government’s job to lead, and if the government doesn’t have the confidence to invest, how can it expect consumers and businesses and banks to lend or spend or invest? I think this is the singular reason that we should have supported a full capital outlay budget.

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