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Bulletins, News, and Press: Legislative Bulletins

State Government Open for Business

Monday, October 01, 2007   (0 Comments)
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State government is open for business after lawmakers gave Governor Granholm what she wanted this morning to call off a shutdown.

After the Senate early this morning passed a sales tax expansion, Granholm ordered state employees to work, ending a brief halt in services that began at 12:01 a.m. today.

As the shutdown of state government was short lived, Governor Granholm instructed state employees to return work this morning so that all state offices will be open for business today, Monday, October 1st. In preparation for the restart of MDOT’s construction projects, Director Kirk Steudle has requested the cooperation of all contractors in returning to work as expeditiously as possible.

MITA suggests all prime contractors immediately contact their MDOT engineer to get project restart direction. When that direction has been issued, communicate it to all subcontractors and suppliers to ensure the timely and efficient restart of your project.

Lawmakers took the state past the midnight deadline for a shutdown, but moved to avert the full impact of the crisis by approving a flurry of bills this morning including a boost in the state’s income tax from 3.9 to 4.35 percent and sales tax expansion.

The deadline slipped by with the House approving Republican-sought reforms of public employee health care that were seen as a key to a deal. The Republican-led Senate gave final approval to that legislation at 1:04 a.m. today.

Granholm demanded that the Legislature pass the tax increases before she would call off the planned layoff of 35,000 state employees. Granholm said at 12:23 a.m. that the Legislature had not completed its jobs and she was implementing shutdown plans.

Aides to the governor said she was determined to see that a budget-balancing plan was on her desk before she left the Capitol today.

Racing to try to meet Granholm’s deadline, the state House had pushed through a 30-day continuation budget to maintain current spending and passed a sales tax on a host of services and an income tax hike to provide new revenue. The same wasn’t true of spending cuts, a key part of a budget compromise, which failed to gain support or even reach votes. The continuation budget was approved by the Senate and sent to Granholm for her hoped-for signature. It would allow the state to spend money into this month while budget talks continue.

The linchpin in the overall agreement for Republicans, reform of teacher health insurance was passed by the House just before midnight.

A 6 percent sales tax on the following services won narrow passage in the state House as Granholm and lawmakers made an 11th hour push to avoid sending the state to the brink of a spending shutdown.

- Business service centers
- Carpet and upholstery cleaning
- Consulting services
- Courier and messengers
- Document preparation
- Investigation, guard and armored cars
- Investment advice (not accounting)
- Janitorial
- Landscaping (no lawn mowing)
- Office administration
- Packaging and labeling
- Personal care (no hair care)
- Scenic transportation
- Security systems
- Service contracts
- Skiing (not golf)
- Specialized Design
- Tour operators
- Transit and ground passenger transport
- Travel and reservations
- Warehousing and storage
- Mini-warehouse and self-storage units

- Personal services, which include:

- Astrology, fortune-telling, numerology,
- Baby shoe bronzing
- palm reading, psychic and phrenology
- Bail bonding
- Balloon-o-grams and signing telegrams
- Bondsperson
- Check rooms
- Coin operated blood pressure machines, personal machines, rental locker & photographic machines
- Comfort state operations
- Concierge services
- Consumer buyers
- Credit card notification
- Dating, social introduction & escorts
- Discount buyers
- Genealogical investigation
- House sitting
- Pay telephones
- Personal fitness trainers
- Personal shoppers
- Porters
- Restroom operation services
- Shoe shiners
- Wedding chapel (not churches, and wedding planning services)

The House passed the controversial levy with 56 Democratic votes, the minimum needed for passage. The measure went to the Senate early this morning, in the first moments of the first closure of Michigan government in the state’s 140-year history.

The Senate passed the sales tax bill on a 20-19 vote, with Lt. Governor John Cherry casting the tie-breaking vote. The bill headed to Granholm. All told, the tax hikes would raise $1.35 billion. No significant action was taken on cutting government spending, with $400 million in cuts to be made in coming weeks. The measures would alleviate a $1.75 billion budget deficit for the fiscal year that starts today.

If you have any questions please contact Mike Nystrom, Vice President of Government and Public Relations at mikenystrom@mi-ita.com ; Glenn Bukoski, Vice President of Engineering Services at glennbukoski@mi-ita.com or Keith Ledbetter, Director of Legislative Affairs at keithledbetter@mi-ita.com ; or by calling the MITA office at (517) 347-8336.


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