LANSING – Ever since the House threw on tie-bar amendments to a campaign finance measure and augmentation to the state’s no-fault auto insurance, legislation that would change the Michigan Business Tax’s gross receipts calculation to exclude taxes businesses remit to the state has hung in limbo.

The House acted on SB 1038 prior to recessing for a three-week summer break and the Senate did not address the bill that is back in its chamber when it was in town last week. Both bodies are scheduled to meet for one day this week.

Business lobbyists said they are continuing to press for passage of the bill without the tie-bar amendments, but so far talks between all sides have been slim to none.

Sen. Nancy Cassis (R-Novi), sponsor of the bill, said the House’s action prior to break was disappointing given that a workgroup had met on the issue for months and the sides, she thought, were close to an agreement.

“We agreed changes were needed. I was as shocked as probably anyone,” Cassis said.

She called tie-barring the MBT fix to Kreiner (HB 4301 ) and a campaign finance measure (HB 4628 ) were “two poison pills” that showed a “deliberate attempt by House Democrats and House leadership to spoil the MBT reforms.”

Both bills have been priorities for House Democrats, who in the majority passed the bills last year. Democrats see the Kreiner decision as limiting motorists’ ability to sue for injuries sustained in motor vehicle crashes and the bill would augment the definition of serious bodily injury to allow more lawsuits to go forward. They also want to see changes to the state’s campaign finance laws, including moving contribution reporting requirements from $1 to $20 and for permitting public employees to contribute to union political action committees through payroll deductions.

The legislation also moves campaign oversight away from the secretary of state to the director of elections, regulates robo-calls and bans candidates from being paid by their campaign committee.

Greg Bird, spokesperson for House Speaker Andy Dillon (D-Redford Twp.), said the statement about poison pills by Ms. Cassis show she is “playing politics” on the matter and slowing progress to the issues as the House passed the measure with overwhelming support. Cassis defended House Republicans voting for the bill, arguing they knew the Senate would address the tie-bar issue and that they do support making changes to the MBT to help all kinds of businesses across the state.

Cassis said she plans to talk with Senate Republican leadership about removing the tie-bars but said anything that would happen on the bill now would be up to leadership to decide.

A spokesperson for Senate Majority Leader Mike Bishop (R-Rochester) did not return a phone call seeking comment for this story.

Rep. Steve Bieda (D-Warren), who chairs the workgroup Cassis mentioned, said there have been some talks over the break, but he didn’t say who was involved.

He did say that “nothing has been settled on it yet,” and he anticipated more discussion this week with both chambers back in Lansing.

Bieda agreed there are some changes to the gross receipts calculation the caucus wants to do, but he added, “We don’t want to blow up the budget (either).”

Officials with the Granholm administration have argued the legislation will cost the state $231 million in lost revenue in the 2008-09 year with implementation implications and about $135 million a year in ongoing revenue losses.

There have been talks about paying for that change by decoupling the MBT from the federal treatment of depreciation, which would be a one-time source of revenue, however Bieda said while that option is still in the mix he is open to other suggestions.

Asked whether approval of the 2008-09 budgets, which by-and-large are nearly completed, is trapping in the option of paying for the MBT alterations through budget cuts, Bieda agreed that it was, but that there were still other options on the table.

Cassis expressed concern that with the election year in full swing, the House will not be in session enough to address the issue head-on. The House has just two tentative session days scheduled for August, but is set to be in session for three weeks in September. That is similar to the Senate’s schedule.

While she is concerned, Cassis also expressed the hope that negotiations henceforth can be honest and upfront and that the bill can move as soon as possible.

Eric Rule, director of governmental affairs for the Michigan Retailers Association, said it’s up to legislative leadership to decide where the issue stands, but businesses have already gone through their first quarterly filings and had to take the hit on the tax-on-tax issue.

He said passing a fix would be best before the fiscal year starts October 1, but negotiations could also be worked out in lame duck.

“We want to get this done no matter what; sooner is obviously better than later,” he said.

Tricia Kinley, director of tax policy and economic development for the Michigan Chamber of Commerce, said the tie-bars have made sending the bill onto the governor “much more difficult” and it baffles businesses that some technical fixes “get signed into law with barely a blink of the eye” while other important changes meet with more resistance.

She said the Chamber is urging lawmakers to put the political shenanigans aside in blaming each other for the MBT and get the job done.

“Right now the MBT is everybody’s problem,” she said, adding that the issue should resonate even more as House members face re-election and have to talk with angry business owners in their communities.

Charlie Owens, director of the National Federation of Independent Business/Michigan, said his group would not support decoupling as a way to cover the revenue loss from the MBT changes, arguing that would “be just switching around deck chairs within the business community.”

He also added that while some businesses, like tobacco retailers, realized their problem with the gross receipts calculation early, other companies might not realize their liability until the end of the year.

However, he said lawmakers should focus on a comprehensive solution now instead of piecing together fixes for different sectors of the economy.

Bird said to his knowledge there have been meetings on the measure, but they haven’t included legislative leadership at this point.

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

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