Around the Dome

by Del Chenault, Senior Vice President, Government Affairs
Scofes & Associates Consulting, Inc. (S&A)

June, 2003

OPTIMISM AMONG REPUBLICANS AFTER RETREAT
After GOP members came from a House retreat, Republican legislators feel confident that the budget can be completed by the end of the month.
The funding for the Michigan Merit Award has proved to be a reason for debate between Republican and Democrat legislators. Republican leaders continue to work with the Granholm Administration on resolving these issues.
Another important issue that needs resolution is the revenue sources to help close the $1 billion-plus gap in the General Fund, and use the federal money coming into Michigan as part of the federal tax cut signed last week by President George W. Bush.
The Senate and House Appropriations Committees are expected to report all budgets to their respective full houses this week.

DETROIT PUBLIC TRANSIT FUTURE LOOKS GOOD
Agreements between top governmental officials from the City of Detroit regarding a regional public transit system stated the future of public transportation in the City is promising and exciting.
The Detroit Area Regional Transportation Authority most likely use money it now gets and the buses it already has to build a more efficient schedule and effective routes.

Detroit Mayor Kwame Kilpatrick, Wayne County Executive Robert Ficano, Oakland County Executive L. Brooks Patterson and the head of the Macomb County Commission agreed on the DARTA system last month. This agreement is based mainly on the legislative form of DARTA former Governor John Engler vetoed last month.

The next option for DARTA will be seeking additional tax revenues for the bus system.

M.E.D.C. ADMINISTRATION FUNDS ARE STILL OUT IN HOUSE BUDGET
The House Appropriations Economic Development Subcommittee decided to cut $4 million from MEDC’S administration costs. This issue has been under scrutiny by several Republicans who want to restore the MERIT scholarship program.

In many respects, the budget is mainly unchanged from the version passed by the Senate. Overall spending is about $54.4 million above current levels and $13.4 million higher than recommended by Governor Granholm; General Fund spending is $12.7 million less than the current year and about $520,000 below the Governor's recommendation.

SIKKEMA CRITICIZES THE DEMOCRATIC VIEW ON THE MERIT SCHOLARSHIP AWARD
Senate Majority Leader Ken Sikkema said there is no need to change the Merit Award scholarship. The scholarship is operating efficiently and proposed legislation by House Democrats could put the program in jeopardy.

Last week, House Democrats proposed funding the scholarship out of the General Fund instead from the tobacco settlement monies, and instead paying the awards over four years.

Governor Granholm had implied at the Detroit Regional Chamber of Commerce Mackinac Island meeting that she would be open to the proposed compromise to the Merit Award Scholarship.

Senator Sikkema spoke at a public forum on the scholarship in Midland. He said the House plan could threaten the long-term potential of the scholarship. People should join us in our efforts to keep the scholarship fully funded with tobacco settlement dollars if they are serious about saving it, he stated.

However, Democrats said the proposal is a genuine compromise that should not be dismissed.

Scofes, Kindsvatter & Associates, Inc. will continue to keep BOMA abreast of its most important issues on a weekly basis, which include the following:

Service Taxes – BOMA strongly opposes ANY type of new service taxes in Michigan. This would have a harmful ripple effect on the building and real estate industry and we vehemently oppose efforts to raise state revenues through any new Service Taxes.

Single Business Tax Cuts – We support efforts to further reduce the SBT in Michigan or maintain the tax at its current level. We understand the state’s requirement to balance its budget but this must be balanced against the need for job creation sparked by lower business taxes.

Mold – BOMA promotes high standards to protect the health and safety of building occupants. To that end, BOMA supports additional research to examine potential health effects of mold in indoor environments. BOMA opposes state initiatives to write model building codes and standards regulating mold and moisture. Building codes and standards designed to address mold and moisture should be developed through the industry standards consensus processes.

Utility Deregulation – BOMA fully supports the transition towards a competitive marketplace for electricity through the unbundling of generation, transmission and distribution. The generation of electricity must become competitive as soon as possible so that all Michigan consumers may realize the benefits of lower prices and enhanced services.

Urban Sprawl/Smart Growth – We encourage the use of the Brownfield’s law for redevelopment of urban areas and adaptive re-use of obsolete buildings. We feel the restrictions of local zoning boards and planning commissions are adequate to deal with urban sprawl issues and while we do not oppose state efforts at a cohesive plan for Smart Growth, we feel the best government in this case is the local government.

MEDC Funding Cuts – While sympathetic to the tough decisions that must be made during today’s budget crunch, BOMA Michigan is opposed to efforts to reduce or eliminate funding for the Michigan Economic Development Corporation. We view any such moves as shortsighted and contrary to the steps Michigan needs to make to keep our state attractive to the development or re-location of businesses to our area.

Brownfield Tax Extension – We applaud the Michigan Legislature for extending the Brownfield’s Tax Credit in December through 2008. This is the type of tax law that will spark urban development and curtail suburban sprawl. We encourage the state to invest more in Brownfield Development as future funding allows.

Read previous Around the Dome reports

The "Around the Dome" newsletter is written monthly by BOMA's Michigan lobbying firm Scofes-Kindsvatter & Associates (SKA) for BOMA members to be aware of key issues in Lansing. In addition, SKA is monitoring top issues identified by the Government Affairs Committee. If you have comments on the newsletter or BOMA issues, please direct them to GAC Chair Bruce Babiarz at bruce.babiarz@bartonmalow.com or Cynthia Andary of BOMA staff. We welcome your comments and questions on BOMA advocacy issues.