ECONOMIC NEWS DOMINATES WEEK OF LIGHT LEGISLATIVE WORK The major legislative news of the week was the Senate passage Thursday of the K-12 public education budget and Governor Granholm signing into law several bills that received legislative approval prior to its summer recess. Meanwhile the Capitol was abuzz surrounding a series of announcements concerning the state’s economy. In rapid order this week, General Motors announced a series of cuts to its white-collar workforce, Dow Chemical announced a joint venture with the Government of Kuwait (K-Dow) which will place its world headquarters in Michigan, and finally Volkswagen announced Michigan had lost out to Tennessee for a new manufacturing facility. Later in the week, state unemployment numbers were released showing no improvement to the 8.5% unemployment rate. Additionally, the Michigan Economic Development Corporation made a series of awards to new and existing businesses that will create upwards of 3,500 new jobs in the state. Included in the award package was assistance for the placement of a solar panel manufacturing facility in the Midland/Saginaw area. The award was the first sign that the Governor’s alternative energy initiative was showing signs of progress. Both chambers of the legislature are expected in REFORM GOVERNMENT INTIATIVE DRAWS FOCUS
The controversial proposed ballot issue of Reform Michigan Government Now (RMGN) continued to draw media attention as opponents of the proposal were considering challenging its constitutionality because of typographical and other errors in the petition. Opponents also continued to question the financial backing the proposal. A PowerPoint presentation on the proposal, which was inadvertently publicly disclosed, called the RMGN proposal a cheaper and potentially more effective means of guaranteeing a substantial Democratic Party role in state government rather than trying to win all three separate branches of government. The cover page of the proposal was titled “Governmental Reform Proposal, Changing the Rules of Politics in Several legislators suggested that a state constitutional convention in 2010 would be a better forum for discussing alteration of legislative terms, restructure of the judicial branch, modification of the method for redistricting and revision of existing state executive departments, boards and commissions. Meanwhile, supporters of RMGN remain confident they have submitted enough valid signatures to put the reform petition before voters in the November general election. SENATE APPROVES K-12 BUDGET FOR SCHOOL FUNDING Thursday, the Senate approved (on a 31-4 vote) the K-12 School Aid budget calling for a per pupil funding increase of $56 to $112 per pupil, focusing larger increases on the state’s poorer districts. The conference report on SB 1107 now goes to the House where passage is expected next week so that schools will know their state aid prior to going into their new academic year. The budget is $13.789 billion, the largest single budget in the state’s appropriations process. The budget is $481.1 million more than the current fiscal year K-12 budget. Included in the new budget is $40.8 million in state general funds, an increase of $5.9 million more than the current year. $15 million is also included in the budget to help finance the start of Governor Granholm’s proposal for 21st Century Schools. The proposal was intended to provide funding for creation of new small high schools to help solve the high dropout rates in certain districts. Instead, the funds will be allocated in $3 million grants to school districts where the graduation rate is lower than 70 percent. STATE UNEMPLOYMENT STILL OVER EIGHT PERCENT The state Department of Labor and Economic Growth said Wednesday that The DLEG report said that June 2008 unemployment was 1.4 percent higher than a year ago. The report added that the state’s employment declined by 11,000 and unemployment decreased by 5,000. The June unemployment level represented the fifth consecutive month that total employment saw a reduction in the state. The national unemployment rate for the month was 5.5 percent. The state attributed the sustained unemployment rate to a slow summer hiring season and temporary layoffs of workers in the auto sector. FISCAL AGENCY REPORTS JUNE REVENUES INCREASE SIGNIFICANTLY The whirl of financial news in June continued to send mixed signals as the Senate Fiscal Agency reported that the state’s revenues in June were 21.7 percent higher than the same month a year ago. The SFA said that fiscal year revenue is up by 9.2 percent compared to the year before. Analysts said that part of the increase is due to the state income tax increase last fall from 3.9 percent to 4.35 percent. The Michigan Business Tax showed a larger than anticipated collection for the month. The state sales tax also showed a June increase, partially because May ended on a weekend, pushing part of the tax collection into June. DOW CHEMICAL ANNOUNCES JOINT VENTURE TO LOCATE IN The state received encouraging economic news Tuesday when Dow Chemical Company announced that A company official said the joint venture will be completed by the end of the year, including the location of its corporate headquarters in M.E.D.C. AWARDS THIRTEEN PROJECTS NEW STATE TAX CREDITS The Michigan Economic Development Corporation on Tuesday showed its support for the state’s business climate with awarding $44.4 million in tax credits to thirteen companies proposing to start or expand its business in The new projects include research and development of a new amphibious vehicle, new headquarters and expansion of a company that provides voice date services to other companies and an online health/life insurer. The Aquada Vehicle grant is to United Kingdom-based Gibbs Industries, which will build research and development facilities in Auburn Hills to refine engineering of the vehicle proposed to be on the market by 2010. The vehicle is expected to travel on the water at speeds of 35 knots and on the ground at 115 miles per hour. GOVERNOR SIGNS INTO LAW PROPOSALS TO AID DOWNTOWN DEVELOPMENT Governor Granholm signed legislation that creates new tools and enhances existing ones to assist in efforts to develop downtowns throughout the state. The Downtown Development support was initiated in her state of the state address and resulted in a bipartisan legislative 14-bills package. The new laws will: n Allow local downtown development authorities (DDA) to operate retail business incubators n Allow DDAs to offer loan programs for improvements to existing buildings located in downtown districts; n Reactivate the Commercial Redevelopment Act to allow new tax abatements for new or replacement facilities in redevelopment districts in a city or village; n Increase the potential number of applications of the Neighborhood Enterprise Zone Act, an existing law designed to reinvigorate neighborhoods in distressed communities; n Require the Natural Resources Trust Fund board to give additional consideration to trails that intersect downtowns when determining funding priorities; and n Expand local governments’ ability to exempt personal property to distressed parcels to encourage redevelopment of rundown parcels in downtowns. Among the other bills signed into law this week by the Governor are: · SB 388, HB 4050, HB 4317 and HB 4680. This legislation will better ensure consumers receive the full value of gift cards and gift certificates. The bills prohibit retailers from: refusing to accept a certificate during a sale closeout or liquidation; refusing to accept a certificate as partial payment; charging an activity fee; considering them abandoned property after five years; altering any term or condition of a certificate once issued; or failing to disclose the terms of a certificate. · HB 5925. The new law allows boutique liquor distillers to operate tasting and sampling rooms much like wineries. The law applies to distillers producing fewer than 60,000 gallons of liquor a year. The small distillers also can retail directly from their production facility. |