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Lawmakers nervous about tax plans

7 March -- The bipartisan joint working group on the state budget did not meet today as planned, and the reasons are unclear. The schedule change came amid talk in the capitol that House Democrats were looking for alternatives to the Governor's budget proposal, especially the 2% tax on services.

House Democrats, having just last November won control of the chamber, are probably feeling vulnerable on tax issues; opponents of the services tax and the Governor's replacement of the SBT have jumped on recent company closures as evidence that new taxes are scaring off business. Proponents of the Governor's plan argue that the business moves have been in the works for quite a while, and that the uncertainty around funding for key state programs is having a chilling effect on business.

Without the promise of new revenue, it's difficult to imagine where funds to close the school aid deficit will come from, though the Senate Republican leadership has indicated they want to avoid mid-year cuts (see comment below in this item).

The six members of the joint working group are: Senators Tony Stamas (R-Midland), Mickey Switalski (D-Roseville), and John Pappageorge (R-Troy); Representatives Matt Gillard (D-Alpena), Morris Hood (D-Detroit) and Bruce Caswell (R-Hillsdale). Sen. Switalski is the minority vice chair of the Senate Appropriations subcommittee on school aid and education; Reps. Gillard and Caswell are the chair and minority vice chair, respectively, of the parallel House subcommittee.

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