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SBAM insiders update on state budget situation

September 18, 2009

By SBAM’s Vice President Government Relations David Palsrok
As you know, there has been a considerable amount of news coverage on the countdown to a shutdown. Here is a brief update on what we know at this time.
There appears to be a bi-partisan/bi-cameral agreement on next year’s fiscal budget. Senate Majority Leader Mike Bishop and House Speaker Andy Dillon have reached a target setting agreement that closes the $2.8 billion dollar deficit with spending cuts, federal stimulus and with no new taxes. The “targets” establish how much each department will have to spend in the coming fiscal year. The next step is for the respective sub-committee chairs to negotiate how that money will be spent within their individual budgets.
Unknown factors:
What will Gov. Granholm do? She could veto the agreement. This would put the state on the path to a government shutdown. Undoubtedly, this would be extremely risky politically because she would virtually own the shutdown.
What will the Senate Democrats do? They could withhold an Immediate Effect vote. This too would put the state on the path to a government shutdown. Again, very risky to them politically because they would then own the shutdown.
What will House Democrats who are opposed to the Dillon/Bishop agreement do? Many are in key positions on the House Appropriations committee and can refuse to hold the conference committees that are needed to move the deal through the process.
Finally, there are also rumblings that the deal could get us through the Oct. 1 deadline. Then after the deadline supplemental bills could be passed to reinstate some of the programs with revenues (new taxes) dedicated to funding them.
Although the news on budget progress is positive, there is still a long way to go in short period of time. You can be assured that SBAM is pushing for a balanced budget without new taxes and demanding that long term reforms must be a part of solution. Stay tuned!

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