LANSING – Their unexpected bipartisan alliance on the budget spawned nicknames like “Billon” and “Dishop,” but Thursday, Senate Majority Leader Mike Bishop and House Speaker Andy Dillon went back to the drawing board after they were unable to get their plan through the Legislature.

Bishop (R-Rochester) and Dillon (D-Redford Twp.) must now await Gov. Jennifer Granholm’s signature, veto or line-item vetoes of the budget bills. They still have to decide on a plan for a K-12 public schools continuation budget (SB 252 ) and the House will consider the revenues and supplemental spending bill that Dillon had said it would seek.

They also must confront another system failure for the Legislature and governor as for the second time in three years officials were unable to pass a budget on time, leading to a shutdown of less than two hours and continuation budget.

“I don’t think we have to start all over again,” Bishop said. “I just think now that the governor is engaged with the process, we’re going to have to figure out exactly what she wants.”

Earlier this month, Bishop and Dillon agreed to close a $2.8 billion deficit with spending cuts and federal stimulus money, but no new revenues. Dillon and the House could then pass new revenues to pay for a supplemental budget to restore some of the lost spending.

Under the plan, Bishop would not commit to acting on new revenues, a fact that triggered strong criticism from Ms. Granholm, a host of groups that would be affected by the cuts, Senate Democrats and even many members of Dillon’s own House Democratic caucus.

Dillon said Democrats will be readying a tax package for next week, but he was not firm on what day the chamber may act.

And Bishop, in his clearest words on the subject to date, signaled willingness in the Senate to support some revenues.

Asked if Senate Republicans could support freezing the Earned Income Tax Credit, which is scheduled to rise, Bishop said, “If you freeze current tax expenditures, if you freeze all those items that are on the table right now, you can definitely get votes to probably do that. That’s not a problem. It’s the general tax increases on taxpayers that have our members very upset.”

Still, Bishop said Republicans’ goal was to use such revenues to reduce the Michigan Business Tax surcharge, not to patch the budget.

Dillon said freezing some taxes is certainly on the table, such as the increase in the Earned Income Tax Credit. While a physician’s tax, also known as the quality assurance assessment program, would trigger significant federal Medicaid dollars, Dillon said he expects that might be a tax that would be hashed out in committee and not simply discharged to the floor like other bills.

Bishop expressed some surprise that the House had yet to pass some revenue bills, but Dillon said Bishop has not even assured him the Senate will take up a tax vote and that he expected to have to “make my case” to four or five Senate Republicans on the need to restore funding for health care, revenue sharing and education through a tax hike.

But Dillon also said that while the focus was to just get through the 2009-10 budget, he does believe the actions taken are leading to a crescendo of efforts to reform taxes comprehensively.

While he doubted something massive could pass before the end of the continuation budget, Dillon said it was important for legislators to seize this moment.

“Hopefully this brings us to the table for real tax reform,” he said.

Bishop was still stung by the events of Wednesday night and early Thursday morning when the House was unable to complete the K-12 and general government budgets and the Senate was stuck on State Police. Only after the Senate Republicans relented to a continuation budget did State Police and general government pass.

“It wasn’t until we had almost all of them over the finish line that the governor decided to put the brakes on everything,” he said. “I’ve never seen the system seize up as fast as I did last night when she decided to put the kibosh on the rest of it.”

Senate Minority Leader Mike Prusi (D-Ishpeming) said the Legislature and governor must now revisit “sensible revenue alternatives that plug some of these holes.”

“We all proved we can be tough. I think it’s time we start proving we can be smart, that we can work together, that we can make some compromises here,” he said. “The state’s facing some very serious issues here and nobody’s going to get their way 100 percent of the time. Why don’t we just acknowledge that, get in the room, work on some compromises.”

House Minority Leader Kevin Elsenheimer (R-Kewadin), besides calling on Granholm to sign the budget bills, noted that House Republicans wound up providing the bulk of the votes to pass them in the House despite the 67-43 Democratic majority.

“Without our House Republican caucus, the budget crisis could not have been resolved,” he said in a statement. “Republicans drove the agenda, and were successful in protecting the taxpayers and essential services. House Republicans controlled the agenda because we took the risk, came out with a plan, and worked hard to provide the true leadership the people of Michigan deserve.”

Legislative leaders again faced criticism for the government’s inability to complete its most basic task – enactment of a budget before the start of the fiscal year on October 1 – for the second time in three years.

Asked if there was anything differently he could have done, Bishop said he has second-guessed himself, but probably the only thing he could have done Wednesday night would have been to succumb to a tax increase or use more federal stimulus money to reduce the cut to public schools.

“We thought that by putting our cards back on the table back in June when we passed our balanced budget that we wouldn’t have this problem,” he said. “It wasn’t until August that we got the governor to give a part of her plan to us. The House … to this day has never passed a plan.”

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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