Posted on 06/01/2004 7:03:07 PM PDT by Dan from Michigan
Gov. Granholm warns schools of cuts without cigarette, liquor tax increases
By AMY F. BAILEY
The Associated Press
6/1/2004, 4:36 p.m. ET
LANSING, Mich. (AP) — Just days before finishing their academic year, Michigan schools learned Tuesday they may have to scramble to cut their budgets by $28 per student if lawmakers don't agree to increase the state tax on cigarettes and liquor by July 1.
Democratic Gov. Jennifer Granholm said the higher taxes must be approved by the Republican-controlled Legislature by June 15 if they are to take effect next month. Without them, Granholm said state funding for health care or schools will have to be cut to resolve a $250 million shortfall in the overall spending plan for the current fiscal year, which ends Sept. 30.
"The clock is ticking," Granholm said during an afternoon news conference with state Budget Director Mary Lannoye.
Lannoye issued a letter Tuesday to K-12 schools warning them their state funding will be reduced by $28 per student if the higher tobacco and liquor taxes aren't approved. The school aid fund for the current budget year is $50 million in the red.
The state also may have to cut reimbursements to hospitals and physicians who take care of low-income Medicaid patients if the tax hikes aren't approved, Granholm said.
Granholm wants to raise the tax on all tobacco products from $1.25 to $2 per pack to generate an additional $97 million for the current fiscal year. She also proposing increasing the price of a $10 bottle of liquor by about 50 cents to bring in $10 million for this budget year.
The tax hikes would stay in effect and raise hundreds of millions more to help fill an estimated $1.3 billion shortfall in next year's budget, which starts Oct. 1.
Michael Flanagan, director of the Michigan Association of School Administrators, said a cut in state funding for schools a few months before their fiscal year ends would be devastating.
Schools already have signed contracts for summer construction work and summer classes, Flanagan said. Although some districts have extra money set aside for emergencies, others don't.
"In some districts there's absolutely no option that they have with this $28 cut," he said. "I don't get why the legislators aren't stepping up to the plate on this. This is a simple solution. It's not rocket science and it gets us through a crisis."
The House voted last week to approve increasing the tax on cigarettes by 75 cents, but its version was significantly different from Granholm's proposal. The House restricted the 75-cent-per-pack increase to cigarettes rather than all tobacco products, put a three-year limit on it and added a two-week grace period before vendors have to transfer the increased tax receipts to the state.
Granholm said the House version is unacceptable, but a spokesman for House Speaker Rick Johnson, R-LeRoy, said there isn't enough support for the governor's original proposal in the GOP-controlled chamber.
"The House Republicans want to be able to balance the budget by cutting spending, not just raising taxes," Johnson spokesman Keith Ledbetter said.
The House voted down the liquor tax hike once this year, and its prospects at this point look uncertain.
Republican Senate Majority Leader Ken Sikkema of Wyoming has said GOP senators won't vote for the higher cigarette tax unless GOP legislation aimed at creating jobs is included in the deal.
Granholm's proposal to increase the cigarette tax won't have the 20 votes needed for approval in the 38-member Senate, where the GOP has a 22-16 majority, because it's not part of a comprehensive budget-balancing plan, Sikkema spokesman Bill Nowling said.
Nowling said Granholm's announcement on Tuesday doesn't change the Senate's position. ___
Well, Jenny, commie baby, start by firing the eco-nazi you hired as your special environmental advisor. Get rid of all the paid socialists, fascists, trotskyites, maoists and castro-butt kissers you throw on your soviet socialist commissions.
BTTT .........for the morning............
Where are all those folks telling us how offensive our second hand smoke is to them? Where are all the ones who love to tell us how we infringe on their "right" to clean air?
Come on, folks, show up and explain how our filthy habit, financing educrats and entitlements, needs to be taxed more for the children....
Suppose we all quit...THEN who will you rob, regulate, and look down your nose at? THEN who'll pay for your precious darlings to be educated in a manner you aren't willing to pay for, but are happy to demand?
Have you noticed how our schools have dropped from 37th to 43rd in the country since Jenny has taken over? There has been no cut in the 6700.00 per student that we spend. So what good will throwing more money into these schools do? Smoking tax or no smoking tax, our schools suck.
We moved to this area because we were suppose to have one of the best districts in the state. Our elementary school is awful. As I said to my hubby, the best district in MI is the most mediocre in OH (14th in the country). I thank God everyday that our homeschooling laws are so easy.
Well, when it's illegal to raise property taxes for scrool funding without a vote, turn to behavior modification taxes!
"Get Engler back."
Why? So he can send letters out to parents that their kid's Pell Grants would be canceled due to the use of the MSA for health related issues? When it comes to Tobacco and other "sin taxes" Engler was as evil as Jenny.
What does that mean? I find her to be repulsive...
What I have been trying to figure out - is why is the cigarette tax and booze tax linked to education. Logic would dictate that it would support the medical portion of the state government. Gas taxes should go to the roads and environmental cleanup. I have yet to figure out a reason why the state government feels the need to "fund" LOCAL schools.
Why are schools the first to have to take a cut? Why doesn't the state fire some workers? Why doesn't the gov take an unpaid leave of absence? Why not make fat people pay more in taxes? Why is it always the smokers and drinkers that have to float the state budget?
Total school aid is $11.2 billion. The "basic foundation allowance" is $6,700 per student. This means there are 1.7 million students in MI. At $28.00 per, that's only $47 million. Is this right? If so, is the tax about money for schools? I don't think so.
FY2004 Budget - http://www.michigan.gov/documents/2004book_59365_7.pdf
FY2005 Budget Bills - http://www.michigan.gov/budget/0,1607,7-157-11460_23052---,00.html
I'm sure if someone had the time to look through all of these, suggestions could be made on where to cut $1.3 billion.
I wish they would make up their flipping minds.........
I mean really......we're supposed to quit smoking and drinking for the children, but we need to keep smoking and drinking for the children.
What a great analogy!
0.42% per student decrease! Tragic I say! I wish that in my line of work I was held to such low standards!
I went to high school and college with Keith. Hi!
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