Dillon: Michigan House could begin passing revised budget bills next week

Michigan budget debate escalates as deadline nears

LANSING, Mich. — House Speaker Andy Dillon said Wednesday that Democrats who control the Michigan House could start passing revised budget bills next week for the fiscal year that starts Oct. 1.

His comments came after Republican lawmakers and Democratic Gov. Jennifer Granholm said they’re anxious for House Democrats to pass their version of legislation addressing a $2.7 billion budget shortfall so final budget negotiations can take place. Lawmakers say they are trying to avoid a repeat of 2007, when Michigan was four hours into a partial government shutdown before the Legislature signed off on a temporary budget deal.

Speaking Wednesday evening on WJR-AM’s “Ask the Governor” program, Granholm said Michigan would not go through another shutdown like the one in 2007, “when we had no budget and no money. Now we have cash from (the federal Recovery Act) but we only have it for two years. We won’t have a cash flow problem but we still have to get budget under control.”

The Republican-led Senate has approved $1.2 billion in cuts that, along with the Recovery Act money, could balance the budget for the next fiscal year.

Granholm prefers cuts of about $572 million on top of those she proposed earlier this year. The governor also would raise about $685 million more through taxes on entertainment tickets, cigarettes and some services while reducing tax exemptions for oil and gas producers, among others.

Dillon has not made his budget-balancing plan public but details should be coming soon as the House prepares to vote on a spending plan that reflects tax revenues falling far faster than anticipated earlier this year. It’s not yet clear if consensus on any one approach has been reached between Democrats in the House who hold a 67-43 advantage over Republicans.

Dillon said he opposes deep cuts to college scholarship programs, early education programs, community health programs and tax revenue payments that help local governments pay for services such as police and fire departments. Granholm opposes some of those same cuts approved by the Senate.

“I believe we can find solutions to the revenue shortfall for those,” Dillon said.

Dillon said the solutions would not all have to come from tax increases because savings could be found through reduced spending or increased efficiency in other areas.

Michigan’s 2007 budget fix included a higher income tax rate and a surcharge on Michigan’s main business tax. But Republicans say that didn’t work, because two years later Michigan again faces a big budget deficit.

“Why is it that today, just two years later, we find ourselves in the very same situation?” said Rep. Kevin Elsenheimer of Kewadin, the House’s Republican leader. “We have failed to make the kinds of reforms that are needed in order to bring this state back and to move this state forward.”

Dillon downplayed a rift with Granholm over when the House would pass revised budget bills. Granholm said Tuesday that the House would pass budget bills Wednesday, but Dillon apparently had no plans to do so. He issued a statement late Tuesday saying all sides needed to “put theatrics and demands aside.”

Dillon said Wednesday the disagreement was about “procedure” and he doesn’t consider it a “continuing divide” with Granholm.