Lansing Update: September 18, 2009

In this week’s Lansing Update:

1. Multiple Budget Scenarios Arise After House Speaker, Senate Majority Leader Strike Target Agreement

Multiple Budget Scenarios Arise After House Speaker, Senate Majority Leader Strike Target Agreement

This week Speaker of the House Andy Dillon (D-Redford Township) and Senate Majority Leader Mike Bishop (R-Rochester) announced a targeting agreement that would cut approximately $1.3 billion out of the 2009–10 fiscal year state budget. Michigan is facing a $2.7 billion deficit, which must be balanced no later than September 31, otherwise the state will be forced to shut down temporarily until revenues are agreed upon. Federal stimulus funds are expected to be used to cover the remaining balance.

The extent of the budget cuts have drawn strong opposition [Link no longer available —Ed.] from advocacy groups such as the MCC, House and Senate Democrats and the administration since a large number of cuts are expected to come from programs and departments that benefit the state’s most needy populations. The agreement announced this week between the Speaker and Senate majority leader immediately created a host of scenarios that could take place in the days to come.

One scenario includes House Democrats opposing the proposed cuts, which would mean the budget process must start all over. A similar scenario would occur if House Democrats happen to agree to the cuts but the governor vetoes the legislation. Should either scenario play out [Link no longer available —Ed.], the Senate majority announced this week it would introduce and address next week a continuation budget [Link no longer available —Ed.] that would allow current spending levels to continue through October while budget solutions are pursued. Rumors have also circulated about the introduction of supplemental legislation to raise revenues in order to offset proposed cuts; however, Senate Republicans have indicated strong opposition to any tax increases or revenue enhancements. Senate Democrats have proposed several revenue-enhancing measures to prevent proposed cuts.

The targeted spending cuts agreed upon by the Speaker and Senate majority leader would affect not only human service programs, but also revenue sharing, K–12 education, mental health programs, state tuition grants, and several other programs upon which thousands of citizens depend. A list of the $1.2 billion in budget cuts approved by the Senate earlier this year follows:

Education:

• Cut K–12 school funding by $110 per pupil, dropping the lowest foundation grant to $7,206 per student: $174 million. The state would need to get a federal waiver to make the cuts; without the OK, it would risk losing millions of dollars in federal recovery money.
• Eliminate the Michigan Promise Grant college scholarship: $140 million.
• Eliminate grants to K–12 schools with declining enrollments: $20 million.
• Eliminate adolescent health centers in schools: $5 million.
• Essentially eliminate the school readiness program: $104 million.
• Reduce adult education funding: $2.4 million.
• Essentially eliminate the Great Parents Great Start ISD programs: $5 million.
• Eliminate money to set up small high schools: $8 million.
• Reduce vocational education funding by 10 percent: $2 million.
• Eliminate math remediation grants: $1 million.
• Eliminate Math/Science Centers and Health/Science Middle Colleges: $6 million.
• Eliminate state funding for the Michigan Youth ChalleNGe Academy, a voluntary quasi-military residential program run by the Michigan National Guard for high school dropouts or near-dropouts: $1 million.
• Reduce funding for some college financial aid programs and eliminate others: $48 million.
• Stop reimbursing community colleges for property tax revenue lost because of renaissance zones: $4 million.

Low-income assistance:

• Make a $10 per person per month cut in the Family Independence Program, dropping the maximum grant for a family of three receiving welfare to $462 per month: $31 million.
• Cut the children’s clothing allowance for low-income parents from $88 per child to $43 per child: $6 million.
• Make a $14 per month cut to Supplemental Security Income, which, in part, provides assistance to the elderly and people with disabilities who live independently, as the governor suggested: $30 million.
• Make a series of cuts in the child day care program that will cut hours and provider rates: $80 million.

Health care:

• Reduce non-Medicaid mental health services $54 million more than the governor recommended: $62 million.
• Reduce the amount paid to health care providers who treat Medicaid patients by 8 percent: $355 million.
• Move more people from nursing homes to community-based settings: $49 million.
• Eliminate the mental health initiative for older residents and respite services for caregivers: $3 million.
• Cut substance abuse services, as the governor recommended, by 5 percent: $1 million.
• Cut by more than half the amount set aside to repay loans for health care providers who establish practices in medically underserved areas, as the governor recommended: $1 million.
• Reduce Healthy Michigan programs that deal with a wide variety of health care initiatives, such as infant mortality, minority health, poison control centers, senior nutrition services and diseases ranging from heart disease to arthritis: $20 million.

Other areas:

• Cut revenue sharing payments to local governments, which many use to pay for police and firefighters: $90 million.
• Add fewer foster care workers and management and support staff at the Department of Human Services than the governor recommended: $26 million.
• Reduce funding for Employment and Training support programs by 43.5 percent: $13 million.
• Close Adrian Training School for young women as governor proposed; also close the Nokomis challenge Center and State Community Juvenile Justice Centers: $7 million.
• Reduce the number of Department of Human Services field staff by 179: $16 million.
• Reduce the State Disability Assistance grant by $5 a month: $1 million.
• Reduce Strong Families/Safe Children grants: $4 million.
• Reduce the Families First program that helps train new parents: $1 million.

SOURCE: Associated Press

According to Gongwer News Service, targeting spending for each state department, based on the agreement between the Speaker and Majority Leader, is as follows: