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Senate acts on teacher retirement benefits

*The Republican majority in the Senate passed changes in the state teacher retirement system today, the first plank of their "reform" platform to emerge from the chamber.* Senate Republicans have insisted on significant changes in public expenses, many of which focus on public school teacher retirement and health benefits, as the price of allowing (and implicitly supporting) a vote to increase taxes for the next fiscal year (see related story). The measures, "SB 546":http://legislature.mi.gov/doc.aspx?2007-SB-0546 and "SB 547":http://legislature.mi.gov/doc.aspx?2007-SB-0547, would increase employee contributions into the pension system, require retirees to pay a portion of their health benefits, and tighten eligibility for full retirement benefits. The measures passed on party-line votes.

Budget deal saves schools - for now

Late Friday, Michigan's top lawmakers hammered out a deal which both prevents last-minute cuts to schools and closes the current year's deficit without a tax increase, but at a cost. Most of the cuts from the regular state budget went to fund increases for health care and prison beds, both of which are projected to increase because of the poor economy. To fill the overall gap, the Legislature intends to sell rights to some future tobacco settlement fund revenues ("securitize" these revenues), among other things. Closing the current year's deficit without a tax increase is evidently part of an agreement with Senate Republicans not to block a vote on an income tax increase for fiscal 2008.

Revenue Conference: School aid deficit $150 million larger than predicted

Much as the Hubble Telescope expanded the known universe, the May revenue estimation conference expanded the "known deficit" for Michigan government and schools. Top state economists agreed that revenues earmarked for school aid for the current year (2006-7) will be $153 million lower than estimated in January - or about $560 million less than originally budgeted for school aid last year.

Senate pushes through budget plan after negotiations fail

The state Senate approved a Republican plan to balance the current fiscal year's budget along party lines last night after negotiations on a compromise proposal broke down. The measures include cuts to schools of $36 per pupil, transfers from restricted funds, and pushing some expenses into next year. Senate Republican leaders wanted to pass a plan to close the current year deficit without increased taxes, while Gov. Jennifer Granholm and House Democratic leaders wanted new revenues to be part of the package to help with both this year and next.

News Analysis: Looking for Cover

The recent fuss in the Legislature with budget agreements that weren't and battling press releases has made it fairly clear that the Republican majority in the Senate is looking for cover on increasing taxes, but Democratic lawmakers are reluctant to give it to them.

Legislative Wonderland

The lengths that some lawmakers will go to avoid dealing with the reality of the state's budget situation was on display today in Lansing. With this week's conference of state economists expected to find that the budget deficit has grown significantly since January, some lawmakers were touting budget solutions that relied on the lower, outdated, figures. Late this afternoon, Senate Majority Leader Mike Bishop (R-Rochester) issued a press release announcing that an agreement had been reached on the state's budget deficit, one that did not require new taxes. Sen.

Clock starts ticking on School Aid cuts

Gov. Granholm made it official - aid to school districts will be cut by June 1st unless the Legislature acts. Speaking to the news media, the governor reiterated her frustration with the Legislature's inaction. "Nobody is more frustrated than I am," she said. "The Legislature has not filled that hole. The clock starts ticking today." If other funds are not found, the cuts would amount to approximately $122 per pupil taken out of school districts' final aid payments, and a further $8 million in cuts to intermediate school districts.

Granholm will cut schools by June 1 unless Legislature acts

An angry Gov. Jennifer Granholm announced today that she is warning school administrators that they will face $125 per pupil cuts starting June 1st unless the Legislature acts to find new revenue. The Governor laid the blame for the situation on Senate Republicans, who have so far resisted any effort to find new tax revenues to solve the deficits for the current fiscal year.

Governor to sign school aid bill for this year; hole remains

The state Senate yesterday gave its approval to a bill that closes about $300 million of the school-aid deficit for this year, even though it fails to account for $62 million of the deficit originally projected in January. State budget officials say Governor Granholm will sign the bill. Left unresolved is the question of how the growing school aid deficit, now reckoned to be an additional $150 million below the mark, will be handled.

House acts in late session; now the horsetrading begins

In a late night session so tense that it degenerated into 'trash talking,' the state House voted last night not to make per pupil cuts to public schools. While the vote on school aid was unusually bi-partisan, other bills considered last night - aimed at closing the State's general fund deficit - were voted up or down on nearly straight party lines and occasioned the verbal tussling.


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