Feb 8, 2008

Legislature gets first look at Governor’s proposed budget

LANSING – The budget process began Thursday when State Budget Director Bob Emerson presented Gov. Jennifer Granholm’s 2009 Executive Budget to a joint meeting of the House and Senate Appropriation Committees.

The path to approving the current budget was cloaked in controversy, strife, anger, a brief government shutdown and tax increases that spurred recalls of lawmakers. But all parties expect the next budget that must be approved by Oct. 1 to go much smoother. The $44.8 billion budget goes a long way toward eliminating the structural deficit facing the budget over the past five years, and it contains no new taxes or new fees.

“You have set an aggressive schedule,” Emerson told the two committees. “We look forward to working with you to make these deadlines.”

The presentation was low key, and the chairs of the two committees only allowed members to ask questions instead of making statements, for the most part. That’s in sharp contrast to last year when the state faced a deficit in the current budget and a projected $1.8 billon deficit in the then pending budget.

“On the surface, I am encouraged that there are no new taxes and fees for the first time in my tenure here,” said Rep. Daniel Acciavatti, R-Chesterfield. “But I am concerned with all the one time money.”

Emerson said higher than expected revenue, lower cases loads in many departments, tight spending controls and refinancing debt at lower interest rates helped eliminate the structural deficits. The budget includes a $100 million deposit in the “Rainy Day” Fund – the Budget Stabilization Fund - and it’s the first deposit in the fund in five years. It also includes $235 million in additional reductions, savings and reforms and a two-year economic stimulus package of more than $1.8 billon.

“The solution we chose stops putting the fix into the future,” Emerson said.

The budget includes an increase in the per pupil foundation grant of $108-$216 and a 3 percent increase in funding for Michigan’s colleges and universities.

“The increases will take another step toward closing the funding gap between school districts,” Emerson said.

The budget also calls for a 4 percent increase in statutory revenue sharing after years of cuts. This is money that goes to local units of government, and they use it to fund a number of local services, such as police and fire services. Since 2001 Michigan has lost more than 1,600 police officers because of budget constraints.

“This is the first time revenue sharing has been increased since 2001,” Emerson said.

Another measure to help local governments is the creation of Mental Health Courts that will ease overcrowding of local jails. The budget calls for $3.35 million to fund five pilot programs. Often, non-violent people with mental problems end up in local jails where the get no treatment and the problem gets worse.

“I applaud the money for the mental health courts,” said Sen. Liz Brater, D-Ann Arbor. “I think it’s historic.”

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