by Gongwer News Service
February 16, 2009

After seven consecutive years of restrained and, at times, painful budgets, the 2009-10 recommendation offered up by Governor Jennifer Granholm, with its $670 million in cuts and 1,500 job cuts, promises new levels of angst before the spending plan is finalized in five months or more.

A demonstration of the issues facing lawmakers and the administration is not just that the general fund and school aid fund would fall to the 1971 mark, but that for the first time in memory, a total budget that includes federal and earmarked funds is lower than the prior year’s.

The current economic situation, however, simply makes it impossible to propose and adopt a budget that tries to maintain governmental status quo. The budget includes “lots of proposed cuts that we were not willing to cut before, but now we simply have no choice,” Ms. Granholm said.

The cuts are both significant and symbolic: prison closings and stepped up paroles in a $120-million cut in Corrections and elimination of the Department of History, Arts and Libraries, which overall will save $2 million but leave most of its functions handled elsewhere in the budget.

However, one of the proposed cuts that did raise immediate challenges was the erasure of $8 million in arts grants, the final blow in a program that had been eroding steadily since 2000.

But expect the biggest controversies to surround the proposed cuts in education: $59 per pupil in grants to schools, which were allocated $7,316 each in the current year; 3 percent from university operations; and a reworking of financial aid that would undercut assistance to private college students. Even more challenging, that proposed $100 million in university cuts is attended by the governor’s insistence that tuition be frozen for a year.

Michigan State University was the first institution to predict tuition increases as a consequence of the budget proposal, and some legislators complained the recommendation runs counter to the administration goal of doubling the number of college graduates.

And school advocates said they have few options to absorb any cuts. “If we have to go backwards from this year’s funding, most of them will have real problems,” said Don Wotruba with the Michigan Association of School Boards. “They were already making major cuts when we were looking at zero (increase).”

State Budget Director Bob Emerson defended the decision, saying many districts have larger fund balances than the state has, particularly the $127 million in balances held by intermediate school districts.

Another flashpoint: prison closings and layoffs of prison guards that will account for most of the 1,500 lost jobs statewide as a newly-enlarged parole board steps up the release of nonviolent felons who have served their minimum sentences. That comes against the backdrop of recommendations issued earlier this year for a variety of ways to curb prison costs.

Mel Grieshaber, vice president of the union representing guards and other prison workers, said he was concerned about the toll the cuts would take on his members, as well as the safety of society. “We think a lot of those are bad guys. We think there is some risk involved,” he said.

But some legislators note the department is already implementing some of the recommendations and hope the stepped-up release parole program will demonstrate to others who have resisted changing sentencing guidelines that safety is not compromised.

“We know that keeping people longer has little effect (on recidivism rates),” said Rep. Alma Wheeler Smith (D-Salem), chair of the House Appropriations subcommittee in charge of the prison budget. She said the approach will also benefit by the governor’s proposed additional spending on re-entry and community-based programs.

Yet to be seen is how the federal stimulus agreement, and its $7 billion targeted for Michigan, will be used and fought over. A major piece is designated for schools to shore up their programs and for infrastructure, and Medicaid is in for another sizeable chunk.

State government’s share could be around $500 million, and Ms. Granholm said she will submit a supplemental recommendation for spending those sums for schools and higher education once the stimulus bill is finalized, which could come as early as this weekend.

House Appropriations chair Rep. George Cushingberry Jr. (D-Detroit), for one, said how much smaller the budget ultimately is than the current year depends on how the stimulus money is used. And, he said, the emphasis needs to be more on reform than on cuts.

Senate Appropriations Committee chair Sen. Ron Jelinek (R-Three Oaks) also said some of the cuts will be simply unacceptable to members, taking note of the proposed 50-percent cut in what would be the combined Cooperative Extension Service and Agricultural Experiment Station.

Mr. Jelinek also refused to say that the Senate would be prepared to cut enough to cover the entire anticipated deficit of $1.4 billion, but he did predict there would be cuts that the governor did not include in her list.

The proposed budget cuts include:

• $28 million in state worker concessions
• Eliminating some human services programs such as after-school programs
• Eliminating arts and cultural grants
• Collapsing together the Cooperative Extension Service and Agricultural Experiment Station
• Eliminating one State Police forensic laboratory
• Eliminating one of the few remaining state institutions caring for the developmentally disabled
• Ending state support for the horse racing industry
• Closing the Mount Pleasant Center for Persons with Developmental Disabilities, for a savings of $5.7 million,
• Closing the Upper Peninsula State Police crime lab.

Among the few bright spots: steady spending for community colleges and revenue sharing. The administration said it wanted to recognize the increased enrollment at community colleges and the drop in property tax revenue they’re seeing as a result of the collapse of the housing market and other economic losses.

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