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PAADVISORY

March 5, 2010

FEDS REJECT STATE BID FOR RACE TO THE TOP EDUCATION FUNDING

State governmental leaders worked aggressively late last year to approve the bipartisan Race To The Top (RTTT) education reform in an attempt to qualify Michigan for about $400 million in federal aid to state schools.

Michigan’s bid fell short of reaching the top as U.S. Department of Education officials announced Thursday that the state was not one of the 16 finalists to qualify for the much- needed funding for state schools. The federal agency said the state can reapply in June when the second round of applicants will be considered.

The legislature, Governor’s office, school officials, and education reform organizations joined together in a cooperative effort late last year to pass a number of education reform proposals in Michigan in order to form the basis of the state’s application to receive the Department of Education one-time funding. The state reform programs, which are scheduled to take effect regardless of the RTTT status, include an increase in the number of charter schools in the state, improved school achievement and efficiency standards, teacher accountability and other measures to improve K-12 programs.

“Although it would have been nice to get funding in this first round, our schools and our students cannot wait and we will continue designing this new education system to move Michigan forward,” Superintendent of Public Instruction Mike Flanagan said.

Legislators expressed disappointment that the state did not qualify as a finalist to receive the federal funding but maintain that the reforms initiated were long overdue to help improve the state school system.

“The reforms passed in late December are a start, but there remains much work to be done,” said Rep. Phil Pavlov (R-St. Clair), one of the House negotiators on the legislation. “There can be no sitting back or waiting in this race to reform public education. Unfortunately, even the federal government recognizes we didn’t go far enough as a state to accomplish meaningful education reform.”

Meanwhile, the Senate Appropriations Committee approved Wednesday $492,800 to pay for 13 new staffers in the state Department of Education to administer the education reforms called for in the RTTT legislation last year. The funds would allow the Department to hire a school redesign officer that would oversee failing schools.

SENATE FAILS TO ADOPT MEASURES TO RESCIND STATE WORKER PAY RAISE

The Republican controlled Senate failed Wednesday to muster sufficient votes to rescind a planned 3 percent raise scheduled to begin October 1 for certain state unionized employees. Majority Leader Mike Bishop (R-Rochester) said he will likely bring the measure up for an additional vote prior to the April 11 deadline to repeal the raise.

The 3 percent increase will take effect for certain union-represented employees unless the legislature rejects it by a super majority vote. The Senate would need 26 of its 38 members to vote to rescind the raise. The House also would have to record a super majority vote, or two-thirds of its 110 members, to rescind the raise for the state’s unionized employees. No vote has been scheduled in that chamber.


House Republican Minority Leader Kevin Elsenheimer (R-Kewadin) called on Governor Granholm to urge the Democratic controlled chamber to bring the measure up for a vote. “Republicans are willing to be the bad guys and take a vote that is going to be unpopular with a lot of people, but for us to convince Democrats to stop blocking this bill, we need Governor Granholm’s support,” Mr. Elsenheimer said. “The governor can’t simply wash her hands of this issue – she needs to get involved.”

The vote Wednesday was 22-16, with all GOP senators except Sen. Bruce Patterson (R-Canton) voting in favor of rescinding the raise. Mr. Patterson, an attorney, said he was concerned about the legality of rescinding the pay raise and did not vote on the issue. The GOP was joined by one Democrat, Sen. Mickey Switalski (D-Roseville), to rescind the raise. “The legislature must choose between bad options,” Mr. Switalski said in his floor remarks. “We can cheapen our word, or spend money we don’t have.”

The Senate GOP leadership said rescinding the pay raise was needed as part of the fiscal reform package it was proposing to secure a balanced state budget. “We can’t afford to let this (pay raise) go,” said Majority Leader Bishop. “If we have to take a vote every day until April 11, which is the final date, we’re going to do it. We have to get this done.”

Mr. Bishop also stated that he didn’t expect another vote to come up until he thought the GOP senators would be joined by more members of the Democratic caucus to support the repeal.

Senate Minority Leader Mike Prusi (D-Ishpeming) said the move to rescind the raise was an “atrocity” when considering the sacrifices state employees have given through health care concessions. “It has become very politically popular to demonize public employees and state workers,” Sen. Prusi said. “When is enough, enough? I think now enough is enough.”

Senate budget leaders said that rescinding the raise would save the state $48 million in the 2010-2011 fiscal year budget. Legislative leaders said that without the $48 million in savings, there would be additional program cuts and reductions, possibly leading to layoffs of state workers.

The organization Business Leaders for Michigan expressed their disappointment in the Senate vote. “We commend the Senate Republicans and Senate Democrat who crossed party lines to vote on this issue today, but we are very disappointed in those that voted no on the resolution to reject the pay increase for unionized state workers,” the group said in an issued statement. “Given the fiscal challenges facing our state, we urge the legislature to reconsider in order to avoid making deeper cuts to critical state services like Medicaid, schools or higher education.”

An EPIC/MRA survey released Friday said that 68 percent of Michigan voters oppose giving the unionized state employees their scheduled 3 percent raise on October 1, after they were told that non-unionized state employees had their scheduled 3 percent raise rejected earlier this year.

The poll was conducted on behalf of the National Federation of Independent Business (NFIB) of 600 registered voters from February 22-25.

SENATE APPROVES LIMITED PURE MICHIGAN TOURISM FUNDING

The Senate overwhelmingly approved legislation on Wednesday to provide an additional $9.5 million to fund the Pure Michigan tourism advertising campaign this year. The funds provided in SB 619 will be allocated from unappropriated dollars in the state use tax and will be added to the $5.5 million already approved by the legislature to promote Michigan tourism.

The House Tourism and Recreation Committee is scheduled to take up the issue on Tuesday. It is likely the committee will consider amending the bill to add more revenue to the tourism promotion program.

Also uncertain is whether the House will include funds for the Michigan Economic Development Corporation business promotion advertising campaign touting the state as a good place for economic expansion.

Last year the state spent about $30 million on the campaign that won national awards as the nation’s best state tourism ad campaign. The Michigan campaign features the narration of homestate native Tim Allen. If the total of $15 million is approved to be spent this fiscal year, which ends September 30, the promotion will be focused on a regional, rather than national advertising market.

Amendments were defeated to increase the funding to $40 million through the addition of a new tax on rental cars or an increase in sales tax revenue from tourism-related businesses.

Bill sponsor Sen. Jason Allen (R-Traverse City) said he would prefer to have seen the full $30 million approved, but couldn’t get support for the additional funding in a fiscally responsible manner. “It’s a start on adequately funding the tourism program but falls short of what is needed to maintain the message that the state’s tourism industry is a jobs provider throughout the state,” Mr. Allen said. “We have to deliver the message that tourism is not just a Northern Michigan jobs maker. State travel figures show that Wayne County is Michigan’s number one tourist destination.”

He asked his legislative colleagues to continue working on programs that will provide a permanent source of funding for the state’s tourism industry.

State tourism leaders said timing is critical to get passage of the bill and are urging the House to take up and approve the bill next week so that the new funds can be spent on an advertising campaign to aid the summer and fall tourism season.

DILLON ANNOUNCES CANDIDACY; SCHWARZ MAY BE INDY; KILDEE OUT

House Speaker Andy Dillon made it official Sunday that he is a candidate for the Democratic nomination for governor this fall. Mr. Dillon made a series of statewide announcements Monday noting that his background of working in the private sector and working in the Legislature in a bipartisan manner qualified him as the best candidate.

Meanwhile, former GOP Congressman and State Senator Joe Schwarz said Tuesday he is filing an exploratory committee for an independent run for governor.

Dan Kildee, the former Genesee County Treasurer and current head of a national land bank organization, announced he is withdrawing from seeking the Democratic nomination for governor.

Mr. Dillon, who is completing his third term in the state legislature, said he plans to continue as the Speaker of the House while he campaigns for the Democratic nomination for governor. The primary election is in August and general election is in November.

Speaker Dillon said that a successful candidate needs to articulate how the state can move out its current financial crisis.

“People want jobs,” Mr. Dillon stated at his campaign stops in Detroit, Grand Rapids and Lansing. “They want to get back to work. They want to see people stop fighting. Michigan has suffered 50 percent of the job losses in the nation over the past 10 years. It’s not going to ever change without dramatic change in state government and we have to be part of the solution and not part of the problem.”

The Speaker joins announced Democratic candidates Lansing Mayor Virg Bernero and Rep. Alma Wheeler Smith. Announced Republican candidates are Attorney General Mike Cox, Congressman Pete Hoekstra, Oakland County Sheriff Mike Bouchard, State Senator Tom George and Ann Arbor businessman Rick Snyder.

COAST GUARD SAYS DETROIT RIVER BRIDGE PROPOSAL UNACCEPTABLE

The U.S. Coast Guard said in a letter issued this week that a proposed second span of the Ambassador Bridge linking Detroit and Windsor created problems with property ownership issues of the new structure.

The Coast Guard letter to the Detroit International Bridge Company (DIBC) stated that the City of Detroit, and not the bridge company, owned the land where the structure would be located and the city is not willing to give up the property.

The Coast Guard letter is part of the continuing controversy over whether a second bridge crossing will be built by the U.S. and Canadian governments or by the private owner of the current Ambassador Bridge. The government-sponsored proposal, called the Detroit River International Crossing (DRIC), would be located a few miles downriver from the existing Ambassador Bridge, which links downtown Detroit with downtown Windsor.

The private proposal calls for the new structure to be built by the DIBC owned by Manuel (Matty) Moroun adjacent to the existing Ambassador Bridge, which DIBC owns.

Supporters of the DRIC proposal said the new span built downriver would provide greater security and efficiency for trade traffic by moving the facility away from the congested downtown city area.

The legislature is expected to act by June on which proposal will be approved.

STATE DEM PARTY CALLS FOR EARLY CANDIDATE ENDORSEMENT

The Michigan Democratic Party state central committee said they would name their party candidates for attorney general and secretary of state at a special endorsing convention in April. Party leaders said they would make the endorsements on April 17 in conjunction with its annual Jefferson/Jackson fundraising dinner.

Leading candidates to seek the Democratic nomination for attorney general are Detroit attorney Richard Bernstein and Genesee County Prosecutor David Leyton. Secretary of State candidates are Wayne State University law professor Jocelyn Benson and Detroit City Clerk Janice Winfrey.

The Democratic Party candidates will face off in November against the Republican Party candidates who will be nominated at the GOP state convention in August.

ELECTIONS BOARD APPROVES PETITIONS FOR NEW CASINO VOTE

Michigan residents may have the opportunity in November to vote on two proposals that could add as many as 15 new casinos in the state.

The Board of Canvassers last Friday approved language of two proposed petition drives to seek voter approval in November for the new casinos.

The plan by Racing to Save Michigan, led by Hazel Park Harness Raceway officials, would provide the state’s current five horse racing tracks with casinos, plus three additional casinos elsewhere in the state.

A second group, Michigan is Yours, would place seven new casinos in Benton Harbor, Detroit, Flint, Lansing, Muskegon and Romulus, as well as one at Detroit Metropolitan Airport.


With Board of Canvassers approval of the petition form and language, the supporters have to gather 304,101 valid signatures within 180 days to qualify the proposals for a vote in the November election.

PAADVISORY BRIEFS

Sen. Hardiman announces for congressional seat. State Senator Bill Hardiman (R-Kentwood) announced this week he will seek the GOP nomination to replace retiring U.S. Congressman Vern Ehlers (R-Grand Rapids). Mr. Hardiman previously served as mayor of Kentwood before winning election to the state senate eight years ago. Also, Steve Heacock, chief administrator of the Van Andel Institute, said Wednesday he will be running in the GOP race to succeed Mr. Ehlers.

Rep. Moore may leave legislature early to take school position. Term-limited Rep. Tim Moore (R-Farwell) said he has accepted a position as the principal of an elementary school in his district in mid-Michigan. Rep. Moore has not said when he starts the principal position and whether he will leave his state house position early.

Sister Monica retiring from Michigan Catholic Conference. One of the most gracious and respected people in the state policy arena, Sister Monica Kostielney, said she will step down this summer as president and CEO of the Michigan Catholic Conference. Sr. Monica has worked for the Conference in Lansing for 25 years, including the last 16 years as CEO and president.