MI House Narrowly Defeats Tobacco Tax Hike; OKS $266.6 M. in Cuts

EXCERPT FROM:

REPORT NO. 96, VOLUME 43– WEDNESDAY, MAY 19 2004

HOUSE DEFEATS TOBACCO TAX HIKE; OKS $266.6 M. IN CUTS

The House rejected Governor Jennifer Granholm’s proposed 75-cent per pack cigarette tax hike Wednesday and then in a startling move passed $266.6 million in spending cuts – including the Merit Award scholarship,
previously a sacred cow in the Republican-led Legislature.

Both results were surprising. During the afternoon, optimism existed on the pro-cigarette tax increase side that they would find the votes to pass the increase to $2 per pack, which Ms. Granholm wants to prevent a $30 per pupil pro-ration reduction to K-12 schools this year and to cover rising Medicaid
caseloads next year. And few thought the House could
muster enough votes to pass a round of politically
unpopular cuts.

Think again.

[…]

Wednesday’s votes, which concluded about 11 p.m.,
indicated that a budget solution remains distant as
officials face a deficit in the current fiscal year of
up to $300 million and for the 2004-05 year that
begins October 1 of more than $1 billion.

Budget Director Mary Lannoye, in outlining the
governor’s proposal to solve the current-year deficit
with the tax increase and other measures, had said Ms.
Granholm would consider alternatives but pointedly
rejected cuts that affect health care and services
affecting the state’s quality of life.

[…]

And proponents of the tax hike held a rally in the
afternoon outside the Capitol where they urged passage
of the bill. At that point, the biggest concern
among the pro-tax side was on whether the bill would
retain $30 million toward tobacco cessation, not
whether the bill would pass.

“This is good public policy and good revenue policy,”
said Michael Sandler, chair of the Michigan State
Medical Society board of directors.

But one smoker, a Lapeer resident who happened to be
visiting the Capitol on Thursday, chided those at the
rally after she asked them whether they smoke and they
indicated they are nonsmokers. “So the hell with
everybody that does smoke, right?” said Bernadette
Schmittow, in between puffs on a cigarette.

THE CUTS: House Republicans said they displayed fiscal
discipline by passing $266.6 million in spending cuts,
but Democrats could hardly contain their glee as the
GOP’s decision to record Republican members supporting
reductions to politically popular programs.

Major cuts in House G.O.P. plan

1% cuts to all departments (except Transportation),
public universities and community colleges ($90
million)

Eliminate Medicaid eligibility for caretaker relatives
($42 million)

Limit Merit Award to those with “C” average ($20
million)

Early retirement eligibility for 9,000 state employees
(4,859 estimated to take advantage) with 3 of 4
retirees replaced ($16.9 million)

Day care for welfare recipients ($14.8 million)

Eliminate funding for prisoner education ($14.8
million)

Cut arts grants ($10 million)

The most surprising of all is the inclusion of a $20
million cut to the Merit Award scholarship, which
House and Senate Republicans proclaimed in 2003 to be
their top budget priority in response to Ms.
Granholm’s ultimately failed effort to reduce the
$2,500 scholarship to $500. By requiring a “C”
average to receive the scholarship in at least the
student’s first year, the Republican plan assumes that
one-third of the nearly 50,000 students who receive
the award will no longer qualify.

Republicans also passed $90 million in unspecified
cuts through a 1 percent reduction to all state
departments (except Transportation), public
universities and community colleges. Revenue sharing
and K-12 schools would not be cut.

“I think we’ve recognized overall that we want to be
fiscally responsible,” said House Appropriations Chair
Marc Shulman (R-West Bloomfield).

The 55-51 vote saw five Republicans join all 46
Democrats against the bill. Republican Reps. Sandy
Caul of Mount Pleasant, Doug Hart of Rockford, Charlie
LaSata of St. Joseph, Mike Pumford of Newaygo and John
Stewart of Plymouth voted “no.” Three Republicans
were absent.

[…]

ROLL CALL VOTE: Here is the roll call vote on the
tobacco tax increase, HB 5632:

DEMOCRATS VOTING YES (31): Adamini, Anderson, Bieda,
Byrum, Clack, Condino, Dennis, Farrah, Gieleghem,
Gillard, Gleason, Hood, Hopgood, Jamnick, Kolb, Law,
Lipsey, Meisner, Minore, O’Neil, Phillips, Plakas,
Sak, Smith, Stallworth, Waters, Whitmer, Williams,
Wojno, Woodward, Zelenko

DEMOCRATS VOTING NO (6): Brown, Elkins, Rivet,
Sheltrown, Spade, Vagnozzi

DEMOCRATS ABSTAINING (9): Accavitti, Cheeks, Daniels,
Hardman, Hunter, McConico, Murphy, Reeves, Tobocman

REPUBLICANS VOTING YES (13): Caul, Gaffney, Hart, Rick
Johnson, Julian, Kooiman, Newell, Pumford,
Richardville, Shackleton, Shulman, Tabor, Walker

REPUBLICANS VOTING NO (47): Acciavatti, Amos, Bisbee,
Bradstreet, Brandenburg, Casperson, Caswell, DeRoche,
DeRossett, Drolet, Ehardt, Emmons, Farhat, Garfield,
Hoogendyk, Howell, Huizenga, Hummel, Hune, Ruth
Johnson, Koetje, LaSata, Meyer, Middaugh, Milosch,
Moolenaar, Mortimer, Nitz, Nofs, Palmer, Palsrok,
Pastor, Robertson, Rocca, Shaffer, Sheen, Stahl,
Stakoe, Steil, Stewart, Taub, Vander Veen, Van
Regenmorter, Voorhees, Ward, Wenke, Woronchak

REPUBLICANS ABSENT (3): Hager, LaJoy, Pappageorge