Most Recent Comments

1) Sen. Brater's "journals statement" [by Admin003 on October 26, 2005]
Senator Brater's statement is as follows:

I also ask permission to address the package as a whole as well as this bill.

We have a complex bill before us; in fact, it's tie-barred to a complex package of bills, and as the good chair of the Finance Committee just noted, there were hearings held on the previous bills that were introduced, but, in fact, we have not had the opportunity to have committee hearings on the bills as substituted in this package. I rise, first of all, as a matter of process to express concern that there has not been an opportunity for our constituents to participate in that debate that ordinarily would occur on the committee process on such a very, very important policy matter. I regret that today.

I think that there is a good deal of interest. I don't think that the minority party would casually ask to have all the bills read, but I think it's an expression of our concern that these bills are being rammed through this Senate without adequate opportunity for analyzing the bills, for understanding their consequences, and for allowing public input. But as best as I can understand, and as some of my colleagues have expressed earlier in this debate today, this bill as substituted would implement an irresponsible plan making further tax cuts at a time when the state faces ongoing structural deficits as a result of the tax cuts of the 1990s.

Indeed, if tax cuts were the answer to our economic woes, we would be rolling in money in this state today, but that is not the case. We do not have a thriving economy now. When people talk about worrying about jobs and unemployment, and if tax cuts were the answer, in fact, unemployment, if you look at the numbers, was falling more severely on a relative basis during the '90s than it is during this administration. That was at the time when we had huge tax cuts going on in terms of the income tax and other cuts that we were making, including phasing out of the SBT.

If you do believe that tax cuts are the answer, these cuts are actually very small compared to the Governor's plan--a 3-percent cut of the SBT rate compared to 37 percent. While the Governor's plan was revenue-neutral, so that it did have some of our business sectors that are not now paying their fair share step up to the plate and pay it. In fact, people talk about insurance, for example, being one of those sectors, and we don't have lower insurance rates here in Michigan Senate as a result of our insurance paying lower rates. I think the Governor was right to look at spreading that tax burden more fairly among our business sector and giving manufacturers that break that they need without, as I said, depriving the General Fund of urgently needed dollars.

Now, as I understand it, this--and I heard varying numbers today about what this plan is going to cost--I've heard $400-$450 million of unfunded tax cuts and $200-$250 million of triggered tax cuts based on phantom revenue. I say phantom revenue because there is no proof that this economy is going to grow the way that you're projecting and materialize in order to cover those tax cuts. So it's a total of $600-$700 million of unfunded expenses to this state at a time when we're already running a structural deficit of that size. This really doesn't make any sense.

I guess we are having a basic ideological debate here and the constituents who those on the other side of the aisle are listening to don't have the same problems that my constituents have. Maybe some of your constituents don't have teeth that we were finally able to restore dental benefits, where for two years, people went without dental health care because they couldn't afford it. Maybe you don't have farmers who are coming to you to complain about the cutbacks in food safety inspection. Maybe you don't have parents who are concerned about the rising cost of higher education in this state. I'm certainly hearing from constituents who have those concerns, and I don't know how we're going on paying for it with these ongoing cuts in revenues.

When we did have the opportunity to have experts come before the Senate Finance Committee, we saw studies that show that in any case, tax rates are not the principal factor that businesses look at when they're deciding to locate. We've heard already about their concern about an educated workforce, and this is borne out in studies, as well as their desire for infrastructure and, indeed, parks and recreation and quality of life issues. These are all things that attract businesses to the state. I don't know how we're going to pay for an educated workforce and all of our other public and higher education concerns if we go on cutting our revenues.

This is a reckless and irresponsible package of legislation which does nothing to cure Michigan's economic woes. It places the Michigan Senate in the position of obstructing and standing in the way of the Governor's plan to build Michigan's economy. This is not a good model for how to make legislation.

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2) Sen. Cassis' "journal statement" [by Admin003 on October 26, 2005]
Senator Cassis' statement is as follows:

I'd like to remind my colleagues that millions and perhaps even billions of dollars have gone to Michigan manufacturers in the form of credits and abatements over the years. Delphi alone, for example, garnered $24 million in tax relief. We also today recognize the plight of the manufacturing sector and provide personal property tax relief, and further, single business tax cuts over the next six years totaling $1 billion.

You know, I remember when John Kennedy was sworn in. I remember the house, the living room and my other
15-year-old friends as we watched his inauguration. President Kennedy knew. President Reagan knew. President George W. Bush knew. They knew what Professor Vedder of Ohio University, my alma mater, and other economists alluded to in our Senate Finance and Tax Committee hearings all over the state. That is, reducing the state's and nation's tax burden leaves more money with those who invest in businesses, who hire employees, who grow the economy and thus, create revenue.

Indeed, I know truly how all of us--each one of us--have agonized over an economy that continues in distress. Today we have a vision, a plan for economic empowerment that is before us. Let us together say a strong, affirmative "yes" and vote green. Move Michigan forward.

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3) Sen. Johnson's "journal statement" [by Admin003 on October 26, 2005]
Senator Johnson's statement is as follows:

First, I rise to correct the former speaker. While it is very true that I did not appreciate nor support--and it was very obvious to the committee members--the proposal that was presented to the Appropriation Committee, this is not that proposal. As the Governor who represents the other side of the aisle said, this is a proposal that she can work with. This is proposal that has some reasonable compromises to it, and this is one that she embraces far more than she would consider than that which has been adopted by the House.

I'd love to give you a history lesson, but I know I've done that often enough and bored the hell out of all of you. But let me tell you something, I've served here, as well as two other members in this chamber, back in 1981 when our unemployment rate was three times as high as it is now; when manufacturing jobs were beginning to leave this state; and when you went out into that parking lot, you did not find one foreign automobile.

Over those years that I've been here, we've lost countless manufacturing jobs; there is no doubt about it. And we've lost it not just because of manufacturers here in Michigan, but we've lost it because of the consumer. It's the consumer who is enamored with the cars that are built overseas or in southern parts of this country.

Michigan's economy has suffered enormously in the years that I have been here. We have been so cyclical it's been unbelievable. And it's because we offer tax increases without realizing that we're offering and taking from the very consumer who going to go out and spend it and buy something, whether it be a K-Mart, Wal-Mart, or any other store where they purchase.

I would much prefer that the dollars that we're cutting today went into my constituents' pockets, frankly, because I know they're the ones who are going to go out and spend the quickest. But this is without question a responsible proposal because it answers the need for funding.


Senator Sikkema's statement is as follows:

I rise to support this bill and to make some comments on this particular bill and the others in the package, if I may. A previous speaker, the Senator from the 10th District, who is a good friend of mine, talked about the need for vision and proceeded to articulate a vision that has as its premise more state spending. I listened carefully and intently to his remarks made in an eloquent fashion, but at its heart was the suggestion that it is state spending on a variety of programs that is critical. Mr.President and members, I have a different vision. My vision is a vision of an extremely prosperous Michigan, a state of growth and opportunity and good, high-paying jobs in a vastly changed economy from what we've known in the past. That vision has as its premise the growth and health and vitality of the private sector, and not just certain kinds of businesses that might be large and might be engaged in manufacturing. That's part of my vision, but it's not exclusive to just those kinds of companies and jobs. The vision I have is a vibrant economy where you have new companies and jobs being created and small businesses, medium-sized businesses, and large businesses; manufacturing, high-tech, life sciences, and information processing. It's a dynamic economy, a dynamic vision.

This package of bills provides tax relief and tax restructuring across the board. We're not saying we're going to put all of our eggs in one basket, being old-style manufacturing, although that's part of this.

At the end of the day, there's as high as a 60 percent credit for personal property taxes in this package. The bill we're debating right now has as part of it as tax relief for small businesses. I think that's absolutely critical--that kind of broad-based approach that's in this package.

Now, that speaker, who is a friend of mine who I thought was eloquent but who I thought articulated the vision that is almost the opposite of mine, talked about the trough, referred to the price of government, and referred to this issue of looking at states to see if the relative tax burden is at the average, below or high. It's an interesting debate, but there's another trough that I'm more concerned about and that is the job loss and that trough that we're in. That's not an academic discussion. That's real, and frankly, given that our unemployment rate is so much higher than the national average, you can't open a newspaper today in this state without seeing another bad headline about some company going into bankruptcy or hemorrhaging jobs--Lansing State Journal, front page, 650 jobs today from an auto parts supplier. I'm more concerned about that trough in our economy than I am about how Michigan rates on its tax burden vis-a-vis the other states and I think that's what we should be concerned about.

There was a reference made that this revenue trigger that's in this package is similar--that was the word used--to this proposal that was in front of the Appropriations Committee a few short weeks ago. Nothing could be further from the case. That proposal was a constitutional amendment that would restrict the flexibility of this Legislature to act. This revenue trigger is in statute precisely for the purpose of giving the Legislature the flexibility so you don't end up in some kind of unacceptable crisis. That proposal we were referring to, it's similar to this tapered proposal coming out of Colorado. The Colorado proposal not only was a constitutional amendment on spending, but it didn't allow state or local government to raise taxes if they felt-- elected officials--they needed to. There's nothing in this proposal that stops that.

CPI plus one percent? Government can't live with the rate of inflation plus one percent? The inflation rate today is 2.7 percent. One percent above that is another 37 percent above the rate of inflation. Government can't live with the rate of inflation plus 37 percent? There's additional flexibility built in here beyond that. It doesn't count federal money. That's not part of this. It counts about 90 percent of the taxes that make up about 90 percent of our revenue.

We're kind of inside baseball here a little bit, but there's other flexibility measures built into this. That first $50 million of triggered tax cuts beyond the $1 billion tax cuts, you've got to have $50 million there to get the $50 million relief. We've got some people who are objecting to that because it's too flexible for state government. There's a provision in this proposal to put money in the budget stabilization fund to deal with an emergency. When's the last time we've had money in the budget stabilization fund in this state? It's been four or five years. This proposal puts money in the budget stabilization fund. That's a responsible thing to do. This proposal must be the right one because there are people saying it doesn't cut government enough and there are people saying it cuts government too much. I think I'm probably in the right spot.

This is a good proposal. It recognizes that you can't just have government spending on economic diversity and job creation and the new economy; but you also need substantial tax relief if Michigan is going to be a place that attracts business investment and growth. I think it's irrelevant--these economists love to debate whether our business tax burden is average, high, or low compared to other states. What difference does it make when you've got an unemployment rate of 6.4 percent? What difference does it make where you stand relative to other states when you know you've got to reduce the cost of doing business?

This does cut business taxes. I think we should, but it does it in a responsible fashion that recognizes there are some other obligations we have as legislators. But it doesn't sacrifice economic growth to the god of state spending, and that's "god" with a little "g."

I heard reference from a previous speaker I have respect for, Senator from the 19th District, who said it's not like the Governor's proposal. Well, thank God. The Governor's proposal was a billion-dollar tax increase on growth sectors of our economy to give a billion-dollar tax cut to one other sector. You know, I find it interesting and enlightening that when I hear advocates of that proposal on the radio, they always talk about the billion-dollar tax cut to manufacturers, not one hint that there's that little billion-dollar increase to financial services. That's a mistake. At best, it's a wash. I've heard the Governor, who I have respect for, say, "Well, we need a billion-dollar tax cut to create jobs." Well, what does a billion-dollar tax increase do then? It must result in fewer jobs. I mean, you can't have it both ways. That's the flaw in that proposal--not that it understands the need for a tax cut. It double-speaks by then raising taxes.

You know there are detractors of this proposal, obviously, but there was a lot of curiosity about it because we are reading all the bills word for word. People, obviously, want to know what's in there. I know there are detractors, but I find it interesting that the detractors are on the two extremes. And, frankly, I think it's time to meet in the middle. We need tax relief for the job providers of this state if we are going to have a growing economy. We have an obligation to critical government services, particularly, education because I think that is also part of our future. I would submit to you that a vote for this package today is the right vote.

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