Mich. House passes bills to raise state revenue

Michigan House lawmakers were on lockdown for most of the day on Tuesday as the leadership sought to push through a series of bills to raise revenue through a number of targeted niche taxes in order to reduce the depth and severity of budget cuts included in the conference committee reports that form the framework for the budget for the next fiscal year.

Among the bills passed were:

HB 5352, which freezes the the yearly inflation adjustment on the personal income tax exemption. This bill passed by a 58-51 margin early in the evening.

HB 5384, a “shell” bill that will likely reduce some exemptions under the Michigan Business Tax. This bill passed 57-52.

HB 5386, which places a 3 percent tax on doctors in order to fund a Quality Assurance Assessment Program for doctors in the state. By establishing those assessments, this bill would also qualify the state for an additional $822 million in federal matching funds for Medicaid reimbursement.

There was very little debate on the first two bills, but the third bill generated a good deal of argument among the legislators and led to a strange finish to the voting. Republicans argued that the 3 percent tax on physicians would lead to a doctor shortage as med school graduates would choose to go somewhere else.

Democrats, on the other hand, argued that because of the boost in payments for Medicaid services, 80 percent of doctors in the state would be better off as a result of the bill. They further argued that the bill was necessary to ensure quality medical care to poor and vulnerable populations during a time of high unemployment.

The voting on this bill began just before 7:15 p.m. and within a few minutes it became obvious that the bill was going to fail. There were 56 votes against the bill on the board by 7:25 p.m. But the voting remained open for nearly another hour, during which time presumably some members were pressed to change their votes.

At 8:21 p.m., the chair suddenly ordered the clerk to tally the vote, which was 56-52 in favor of the bill. Four legislators had been convinced to change their votes: Reps. Jimmy Womack (D-Detroit), Lee Gonzales (D-Flint Township), Dan Scripps (D-Leland), and Marc Corriveau (D-Northville).

There is a fourth revenue bill passed by the tax policy committee, HB 5355, which would increase the state tax on tobacco to raise additional revenue, but that bill did not come up for a House vote on Tuesday.

All of this is part of an attempt by Democrats to raise additional revenue to reduce the depth and severity of several budget cuts included in the conference committee reports that form the framework of the budget for the next fiscal year. They would like to reduce cuts to local revenue sharing, Medicaid reimbursement, K-12 school funding and the Michigan Promise scholarship in particular.

A press conference with House Speaker Andy Dillon and Gov. Jennifer Granholm was scheduled for immediately after the Tuesday evening legislative session, but because the fourth revenue bill did not get a vote, the gathering was called off. Gov. Granholm did release the following statement:

Michigan’s future demands that we continue our work to diversify our economy and create new jobs and that we keep police officers and fire fighters on the job and on our streets. Michigan’s future demands that our children continue their education beyond high school and that we protect people who are at risk during these tough economic times. While there is more work to be done, I am grateful that the House Democrats have taken an important step to protect these priorities, including their support for a Quality Assurance Assessment Program that will bring significant additional federal dollars to Michigan, provide a 76 percent increase in payments to physicians who deliver care to our neediest citizens, and thereby increase access to healthcare.

It is unclear that any of the bills passed by the House today had the votes to be passed by the Republican-controlled Senate.

Todd Heywood assisted in this report from Lansing