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Published: Thursday, 2/26/2009

Granholm revisits tax, fee hikes

ASSOCIATED PRESS

LANSING - It could cost more to smoke cigars, visit state parks, and make international phone calls starting Oct. 1 under Gov. Jennifer Granholm's budget proposal.

But it's unlikely most of the tax and fee increases will become law this year. Efforts to end tax breaks for international calls and tractor-trailer sales, for example, died after hitting tough resistance in the Legislature.

So did the governor's 2007 proposal to double the tax on cigars, snuff, and tobacco used to roll your own cigarettes.

That didn't stop her from floating the idea again or from trying a second time to double liquor license fees. But the Democratic governor probably shouldn't hold her breath for a different result.

Senate Majority Leader Mike Bishop (R., Rochester) opposes tax and fee hikes to help balance the budget. Because Republicans control the Senate, he's positioned to kill most of her ideas.

"I don't know why they've been proposed," he said. "I have not seen one that makes any sense."

The governor wants to balance the $44 billion state budget for the next fiscal year with $670 million in spending cuts, $500 million in extra Medicaid payments from the federal government, and $232 million in tax and fee hikes. She also wants to publish the names of major delinquent taxpayers, trying to shame them into paying up.

The proposed increases are a mix of old and new ideas to make up a $1.4 billion shortfall.

While Mr. Bishop doesn't like most of them, he's more open to one of Ms. Granholm's proposals that has gotten some buzz: letting bars buy a permit to serve alcohol until 4 a.m. Closing time is 2 a.m.

Because bar owners would decide if they wanted to pay an extra fee to serve until 4 a.m., he said he could support it. Budget experts think the change could mean $4.6 million more for the state.

Ms. Granholm has suggested lifting the state's Prohibition-era ban on selling alcohol on Sunday morning. Establishments buying permits could generate $9.1 million for Michigan.

Supporters say it's a matter of convenience and opponents say the Sabbath should be respected. The governor has said she will never again seek a general tax increase because it's too hard to pass. State government shut down for several hours in October, 2007, because lawmakers couldn't agree on how to raise taxes.



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