by Gongwer News Service
June 19, 2009

Put away your plans for college, stay off the streets, run as far as you can get from the Capitol … because here comes the Senate’s “budget of death.” A dramatic new moniker, but one some officials and lobbyists began using after the chamber’s new slice ’em and dice ’em appropriations have left State Police, higher education, community health and human services with cuts that were surprisingly dramatic, even for the times.

Saying cuts were “regrettable” but necessary, Republicans on the Senate Appropriations Higher Education Subcommittee approved a 2009-10 budget that slashed tuition grant programs that last year helped more than 200,000 students pay for college.

And while the executive and the House added $59.5 million to next year’s Michigan Promise Grant to reflect anticipated costs of $140 million to the program, the Senate panel, in one of the most notable cuts, eliminated the merit-based program altogether, saving $80.5 million.

But Governor Jennifer Granholm said she will not stand for the program’s elimination, adding she will not let the Senate break her promise to any of the estimated 96,000 students who scored well on the high school merit exam who have been promised the grants.

Sen. Liz Brater (D-Ann Arbor), who voted against the bill, had the same sentiment, saying she has “grave concerns” about cutting grants and, therefore, cutting people’s access to education.

“This budget isn’t ready,” she said. “We need to find a way to fund these programs. Whether it’s looking at the tax structure, such as making it progressive or taxing some services, it is the responsibility of the legislature to fund all necessary items.”

Besides the Promise Grants, the subcommittee also axed three needs-based financial aid programs: work-study, part-time independent grants and the Michigan Educational Opportunity Grant, programs that in 2008, when combined, helped more than 15,500 college students pay for school.

Universities also saw a direct hit as a result of less stimulus money going to higher education than originally anticipated, with 0.4-percent reduction across the board for operations.

In one of the largest budgets passed, the Senate cut revenue sharing payments to local governments by 12 percent in 2009-10 and funded many other state departments at 10 percent less next fiscal year under the general government budget.

Not every department in the multi-department bill would be cut by 10 percent, and there are other adjustments that would be included in the bill. For example, the Department of State would be cut by $10.3 million in general funds, but would see a $5-million increase in a new branch services fee.

Meanwhile, the Senate also cut deep in two other budgets, often considered the source of the state’s safety net, to balance teetering revenues.

In a contentious committee meeting where Democrats argued against the cuts, the Senate Appropriations Community Health Subcommittee sent more than $500 million in general fund cuts — including cuts in provider payments, community mental health and the elimination of most of the Healthy Michigan fund — to the full Senate Appropriations Committee on a party-line vote with Republicans in support.

The DCH budget, which was later approved by the full appropriations panel in much the same form as the subcommittee recommendation, eliminated all but $5 million from the Healthy Michigan Fund. All other programs — smoking cessation, diabetes education, immunization agreements and management, Alzheimer’s outreach, infant mortality programs and the like — were wiped out, although the Senate has agreed to look at ways to reinstate some of the programs.

As for the DHS budget, the state would cut welfare grants and day care rates that would slash more than $200 million out of general fund allocations spent on the department this fiscal year.

The budget passed on a largely party-line vote, 21-15, after Democrats tried unsuccessfully to reinstate a variety of the programs cut in the measure.

Advocates at the League for Human Services called the Senate’s vote “wrongheaded” and said the Senate has other options to balance the budget than to do it on the backs of the most vulnerable, who will only get more needy as the economy worsens.

Sen. Bill Hardiman (R-Kentwood), chair of the Appropriations Human Services Subcommittee, acknowledged the tough level of cuts, though he said the budget has to reflect the reality that revenues are down and budgets must be reduced.

Still, he said the budget would still provide protections for those hurting in the state. “I hope this budget will be part of the Lord’s deliverance of this great state,” he said.

In terms of overall spending, the budget is nearly $1 billion more than the current year’s budget, from $4.95 billion in the current year to $5.83 billion in 2009–10. Virtually all of that increase comes through additional federal money for food assistance in the state, $1.5 billion. Mr. Hardiman said that would allow more people than ever before to get food assistance.

But that increase is offset by a series of major cuts, totaling better than $600 million in both general fund and total spending.

The general fund portion of the budget would total $793 million, down from the more than $1 billion allocated this fiscal year.

Among the cuts is a $10-a-month cut in Family Independence Program grants (which now average $490 a month per family), which would save an estimated $24 million.

Also cut would be the $75 clothing allowance that recipients can use to get school clothing for their children, which should save $5.6 million. Child day care rates were also cut, saving $38.4 million, and the hours the state would pay for day care were cut by $15.5 million.

Also cut, saving $29.8 million, were supplementation payments under supplemental security income.

The budget would also cut nearly 150 staff in the department.

The cuts were blasted by Democrats who said they would make it that much tougher not only for people to find jobs — by cutting back on day care assistance — but to simply survive.

“These cuts are just awful,” said Senator Martha Scott (D-Highland Park) in a statement. “We need to work together to balance the state budget, but certainly we can do so without pulling the rug out from under the children and families already being hit the hardest by this economic crisis.”

Ms. Scott said by rejecting several amendments that would have increased DHS funding, her GOP colleagues threatened services that “clothe, feed and shelter Michigan families and also assist those looking for work.”

Turning to another budget, the Senate dealt perhaps the most surprising type of cut in the State Police budget: one that would theoretically save $3 million a year by backing out of the lease for a new police headquarters, but then not infusing those savings into rehiring troopers set to be laid off.

The contract for a new trooper headquarters has been a point of political contention recently brought up by several Republican candidates for governor, including Attorney General Mike Cox.

The vote to bar the lease payments came one day after Mr. Cox indicated the state could get out of the contract on the building by not appropriating money for the building.

The measure passed the chamber on 26-9 vote.

The layoffs of 104 troopers called for by executive budget cuts were cited repeatedly as the reason why the Senate should reject a contract moving into a “palace” and “Taj Mahal” of a headquarters building. “A headquarters cannot respond to an accident,” said Sen. Cameron Brown (R-Fawn River Twp.).

Mr. Brown, long a critic of the new headquarters building nearing completion in downtown Lansing, led the effort to prohibit the state from spending $3 million a year on a lease agreement.

The state pays $1 rent on its current headquarters in East Lansing on property owned by Michigan State University. That building has needed regular maintenance.

Mr. Brown said the new headquarters was the best example of how the state had misapplied its budget priorities.

But Senate Majority Floor Leader Alan Cropsey (R-DeWitt) said State Police top executives had asked for a new headquarters. Former Governor John Engler originally requested it. After changes were made to make the building smaller, Governor Jennifer Granholm requested the building.

How would it look for the state to take possession of a building that it would now refuse to occupy? Mr. Cropsey questioned.

Sen. Gretchen Whitmer (D-East Lansing) voted against the budget, largely, she said, because no provisions were put in the measure to restore the troopers being laid off. Not present for the vote, because he is on military assignment, is Sen. Valde Garcia (R-Howell), who chairs the Appropriations State Police Subcommittee. Mr. Garcia attempted to convince his colleagues to pass the budget, saying he had found a way of restoring the laid-off troopers to the ranks.

For nearly 50 years in Michigan, Gongwer News Service has provided independent, comprehensive, accurate and timely coverage of issues in and around Michigan’s government and political systems. For subscription information, including a free trial, visit Gongwer online.