In accordance with congressional requirements, the Senate passed legislation on Wednesday designed to prevent the practice of dumping unemployment taxes. SUTA dumping is when companies find ways to pay a lower state unemployment insurance tax than their layoff experience allows. This bill package will stop the transfer of employees from one company to another to avoid higher unemployment taxes. The practice of acquiring another company and using its experience rating in order to lower taxes will also be prohibited.

This package of four bills (SB 171, SB 172, SB 173, SB 174) passed unanimously with the exception of SB 172, which was opposed by Senate Minority Leader Bob Emerson (D-Flint). The package of bills did not pass without a struggle, as Democrats unsuccessfully tried to amend the main bill so that professional employer organizations (PEOs) would be required to provide quarterly reports using their client company’s identification numbers. This proposal was defeated 16 to 21, with one Republican siding with the solid Democratic caucus. The Department of Labor and Economic Growth has placed a large portion of the blame for the SUTA dumping problem in Michigan on PEOs.

Republicans also blocked an amendment that would raise the state’s maximum unemployment benefits by overruling Lt. Governor John Cherry’s germaneness ruling. Supporters of the proposal to raise the state’s unemployment benefits level argued that Michigan’s maximum unemployment benefit has not been raised since 2002, and with record layoffs, something needs to be done.

Speaker of the House Craig DeRoche (R-Novi) said that kids that "did their work in school" deserved the $500 college scholarship promised them when the program was initiated by then Governor John Engler. Students who won the award are eligible to receive the $500 grant for the 2005-2006 college school year. The total cost of $9 million is the issue in this very contentious budget year.

While the Merit Award program for middle school students is a key issue for many Republican legislators, Senate Majority Leader Ken Sikkema (R-Wyoming) has indicated he would like to continue to protect the program but all issues have to be reviewed due to Michigan’s struggling fiscal condition.

School Funding Guarantee Bill: SB 246 would guarantee annual school funding increases of five percent or the rate of inflation, whichever is less. Senate Minority Leader Bob Emerson (R-Flint) sponsored the bill, and was joined by all but three members of his caucus as co-signers. Education organizations are initially focusing on the legislation, but are poised to launch a petition drive should the measure fail. The bill has been sent to the Senate Appropriations Committee for further review.

Bush names Engler to Trade Group: President George W. Bush has named former Michigan governor John Engler to the U.S. Advisory Committee for Trade Policy and Negotiations. Engler will join the 25-member advisory committee for a term of two years. Engler is currently the president of the National Association of Manufacturers and has called for increased trade agreements overseas to expand markets for goods made in the United States.

Senate Republican Campaign Committee Event    March 16, 2005

House Democratic Caucus Lansing Gala    April 20, 2005

Senate Democratic Fundraiser    April 26, 2005