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Thu February 12, 2009
Governor presents "painful" budget to Legislature
By Rick Pluta, Michigan Public Radio Network
Lansing, MI – Lansing, MI (MPRN) -- Governor Jennifer Granholm's budget request for the coming fiscal year cuts money for schools, universities, prisons, and health care. The governor says the recommendations are painful. But she says the plan attacks the built-in spending pressures that created years of recurring budget deficits.
In the past, Governor Granholm and the Legislature found ways to paper over the state's budget troubles with windfalls and temporary measures. Granholml says this year's plan, when adjusted for inflation, brings state spending back to what it was in the early 1970s. She says it will reduce a deficit pegged at somewhere around $1.5 billion.
But she says the choices were very hard.
"The budget recommendation reflects the economic realities that we're facing in Michigan," said Granholm. "It is a very tough budget."
Under the governor's plan, per-student school aid payments would drop by $59, and universities would be hit with a three percent rollback at the same they are being asked to freeze tuition rates.
The governor says she hopes a federal stimulus package that's making its way through Congress would help mitigate the impact of those cuts.
"The cuts to education are particularly challenging, obviously, when we want to invest more in higher education," Granholm said. "However, we do expect, believe, based on what we've heard that there will be an opportunity to add funds for education, K-12, and higher education. "
But the governor says she's not ready yet to make big plans regarding stimulus funds from Washington. She says a separate spending proposal will go to the legislature once it becomes clear how much money Michigan can expect, and what conditions will be attached to it.
Closing prisons is part of her plan. The governor ordered a newly expanded parole board to quickly review the records of 12,000 prison inmates who have served their minimum sentences -- with a target of releasing three to four thousand from custody.
The governor's plan does not call for income or business tax increases. But she does think there's some money to be squeezed from the sale of many tobacco products that are not taxed at the same rate as cigarettes. She wants to end some tax breaks for businesses, and raise liquor taxes. She also wants to sell special licenses to retailers and bar owners that would allow them to stay open to sell beer, wine, and liquor until 4 a.m., and before noon on Sunday mornings.
Senate Appropriations Committee Chairman Ron Jelinek says he's disappointed the plan did not call for more cuts, and says he and other Republicans will demand even more spending rollbacks.
"We have no choice," said Jelinek. "It's fix it now or jump off the cliff later. I'd rather fix it now."
In fact, Republicans and Democrats in the legislature vowed there will be big changes to the governor's plan before it becomes law.
House Appropriations Committee Chairman George Cushingberry objects to cuts to state stipends that help poor people with living expenses.
"I get incensed when the poorest of people who don't have no defenders get wiped out," Cushingberry said.
Cushingberry says federal stimulus money should be used to maintain and even expand social programs that help struggling people.
"That's where stimulus money is going to be spent. The president has said that he wants to increase the system so we can include more and more people in Medicaid, and we can give every American the same health coverage that Congress has," Cushingberry said.
The governor's plan also calls for a 10 percent rollback in salaries paid to the next governor, as well as hundreds of legislators, and judges. A state commission that sets salaries tabled action on that. It's asking state Attorney General Mike Cox to provide advice on whether the plan is constitutional. The governor's advisors say salary cuts at the top will be important as she tries to convince state employees to accept pay cuts and other concessions that will also be necessary to balance the budget.