Stick A Fork In It

Monday, October 01, 2007

Well, it's done. Our legislators passed a series of cuts, reforms and tax increases and ended a complete shutdown of the state only 4 hours into it.

Very briefly, the Senate and House gareed to about $400 million in cuts to some state services. This is more than the House wanted but about half of what the Senate wanted. Other than that, our income tax in Michigan increases to 4.35% (from 3.9%) and the 6% sales tax has been extended to other goods and services that are currently sales tax-fee.

Also, the legislature passed continuation budget bills which allow 30 more days to negotiate on the FY 08 budget. Most of the FY 08 budget bills are in their respective conference committees (ask me in the comments for an explanation of conference committees if you want to know) and were simply awaiting the final figures for what this fiscal year's revenues will look like. With the passage of all of the pieces of the deal last night/early this morning, they can now set their targets.

The 6% sales tax bill will raise about $411 million for the general fund and $200 million for the school aid fund. The new services that will be taxed include:
Business service centers

Carpet and upholstery cleaning

Consulting services

Courier and messengers

Document preparation

Investigation, guard and armored cars

Investment advice (but not accounting)


Landscaping (but not lawn mowing)

Office administration

Packaging and labeling

Personal care (but not hair care)

Scenic transportation

Security systems

Service contracts

Skiing (but 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, palm reading, psychic and phrenology

Baby shoe bronzing

Bail bonding

Balloon-o-grams and singing telegrams


Check rooms

Coin operated blood pressure machines, personal machines, rental locker, and photographic machines

Pay telephones

Comfort station operations

Concierge services

Consumer buyers

Credit card notification

Dating, social introduction and social escorts

Discount buyers

Genealogical investigation

Housing sitting

Personal fitness trainers

Personal shoppers


Rest room operation services


Wedding chapel (but not churches, and wedding planning services

There's some funny shit in there.

The income tax increase will raise about $765 million. This increase will begin to roll back in 2011 and be back to it's pre-passage level of $3.9% by 2015.

On a personal side, I have now been at work 20 of 21 days, incluing weekends. Many of these days, most in fact, were more than 16 hours. I don't grouse; legislators and their families were in the same boat. I guess it boggles my mind that for as long as we have known about the problems we faced, it took 3 weeks of late-night and all-night sessions, and 4 hours' worth of shutting down government, to make it work. This was political brinksmanship at its worst. This weekend, I worked Friday until midnight. They reconvened Saturday afternoon and went through the night without stopping into Sunday, and still through early this morning until a little after 4:00 a.m. That's 40 straight hours. That's bullshit.

But...they did it. It's over.

My boss was kind enough to give me the day off today for all of the work that our firm put into this.

And my wife got to go to work today and earn money.


Smitty 9:02 AM  

Colin asked about the retirement stuff.

The biggest reform was SB 418, which allows school districts to form small local pools with other nearby school districts or even local municipalities in order to get good insurance rates.

Currently, each school district negotiates for their own insurance. The pools set by this bill must be of at least 100 employees.

The bill was conceptualized by the American Federation of Teachers (AFT), and supported by a number of other school-related lobbying organizations, including school administrators and Intermediate School Districts. It was strenuously opposed by the Michigan Education Association (MEA) and their subsidiary insurance company MESSA.

There were also 2 "graded scale premium" bills, which alter how health and retirement premiums are paid by the employer and employee. The longer you work, the less you pay, but you have to work longer to get there. Something like that. I'm tired.

Colin 9:11 AM  

My mother was a teacher. But a friend of the MEA she was NOT. It sounds like MEA/MESSA are just concerned about losing the business? I was very happy with the quality of health coverage I received as the child of a Michigan Teacher. As long as we keep our teachers healthy and happy, I'm good. They deserve it! God knows they don't (often) get paid enough...

Stopping of an enforced Monopoly, no matter how insignificant, is a good thing in my book. There's no reason school districts shouldn't be able to get equivalent healthcare for cheaper on the market, at least I hope!

Colin 11:58 AM  

Crains Detroit has an interesting collection of reader comments:

(split up over three lines after what it did to my last link.)

I'm getting more and more ticked off about the tax increases as the day goes on...

steve s,  1:17 PM  

As a current beneficiary of MESSA insurance, I can say it the best I have ever had. Not just in terms of coverage, but also for great customer service.

I hear plenty of complaints about tax increases, but then the same people don't want to give up certain services. You can't have it both ways...low taxes and high expenditures.

Smitty, thanks for the update. Get some rest!

Smitty 8:45 PM  

MESSA was making claims that this will end good coverage for teachers. Not true. In fact, it will help districts reduce costs to itself as an entity and teachers as payors (at least of premiums) by allowing them to seek the same benefits at more competitive prices.

As colin points out, it stops a sanctioned monopoly. Coverage won't get worse; why would it?? If it did, it's the union's fault, not the competitively-bid insurance.

steves 10:13 PM  

I agree, but I will believe it when I see it. I am cautiously (maybe foolishly) optimistic.

steves 7:15 AM  

In the interest of full disclosure, I am generally pro-union. I know they are not perfect, but I also don't believe they are the cause of all economic hardship in this state, as some republicans would have us believe.

My first job out of grad school was union and this was a huge help, as the administrators where I worked were, for the most part, idiotic and arbitrary. My wife has also received strong support and help from the MEA when the Superintendent tried to back out of a promise that was made.

Also, every single time that my insurance has changed in any job that I have ever had, it has always been to reduce benefits. I understand that the the union will still have to negotiate any changes, so they will bear some of the responsibility, but this just makes me nervous.

Anonymous,  11:07 AM  

Sorry for keeping you up the last hour and a half of session.


Smitty 11:40 AM  


I won't take you to task on my blog. I'll do it later.

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