Sep 18, 2009
Proposed budget will kill any chance at economic recovery and mortgage the future
LANSING – Diverse groups from the Michigan Municipal League (MML) to the Michigan Association of School Administrators expressed shock that House Speaker Andy Dillon, D-Redford, agreed to use the all cuts budget proposed by Senate Republicans as targets for balancing the 2010 budget.
Dillon is siding with Senate Majority Leader Mike Bishop, R-Rochester, in using all cuts to make up the $2.8 billon deficit in the state budget that must be in place by Oct. 1. The only thing that appears to be certain in the fluid budget situation is that there will be a continuation budget. Part of the alleged deal between Bishop and Dillon is an agreement to include new revenue that will allow the Legislature to restore some spending cuts in a supplemental appropriations bill down the road. But the problem is that Bishop has been running for Attorney General for the past year and there is no incentive for Bishop to even allow his caucus to take up any new revenue bills down the road.
The budget cuts passed by the Senate Republicans will devastate the state, and they include eliminating the state’s 78 Child and Adolescent Health Center (CAHC) Programs, a $110 cut in the per student in the foundation grant, eliminated School Readiness grants, completely eliminated Early Childhood funding, eliminated vocational and adult education, eliminated the Michigan Promise Grant scholarship, huge cuts to the Healthy Michigan Fund, cut 8 percent to Medicaid providers and a 12 percent cut to local government revenue sharing.
The good news is Senate Republicans are balking at the cuts that will hurt Michigan’s future and economic recovery.
Senate Democrats offered concrete suggestions on Thursday for resolving the crisis, while avoiding cuts that would eliminate any chance for a long-term economic recovery.
“For anyone to imply that the only way to fix our budget is through cuts alone or general tax increases alone is baloney,” said Senate Democratic Leader Mike Prusi, D-Ishpeming. “Our alternatives present a compromise approach that still includes some painful cuts, but uses reforms to protect the things that will make our state competitive in the future. These options should at least be on the table as we hammer out a final budget deal in the coming days.”
Senate Democrats have consistently defended several key priorities that are important investments in making our communities safe and our workforce attractive to new businesses, including: Early childhood and public education programs, so that our young people enter school ready to learn; Promise scholarships that help our students afford a higher education and secure good-paying jobs; Local revenue sharing that provides police officers and firefighters to watch over our loved ones; and Health care programs that keep people from seeking more expensive care down the road that we all end up paying for.
The caucus acknowledged that difficult cuts in other areas of the budget may have to be considered, but they have identified a number of reasonable funding sources that would allow Michigan to restore these key investments. These funding alternatives include:
Ending Michigan’s status as a donor state. Assessing just a 2 percent fee on physicians, like we do with hospitals, nursing homes, and other health care providers, allows us to secure a 3 to 1 match from the federal government. This is an idea that even members of the Senate Republican majority have supported in the past and it could provide more than $300 million. By ignoring reforms adopted by other states, we are allowing Washington to dole out hundreds of millions of dollars to states like California, Texas and Alaska instead of Michigan.
Asking multi-millionaires to pay their fair share. Decoupling from the federal government on estate taxes for estates more than $2 million, like a number of other states have done, would allow us to collect at least $130 million to avoid these painful cuts. A majority of other states, including all of our neighbors in the Midwest, already have some type of system to require this.
Reducing tax expenditures. By temporarily scaling back the more than $36 billion in tax credits the state hands out every year; we can avoid wiping out important services.
Limiting tax loopholes. We currently give millions of dollars in breaks to oil and gas companies, insurance companies, and others, while some are advocating for the complete elimination of programs that help our kids. Those aren’t the right priorities for Michigan.
“Now, there may be those who accuse us of being obstructionist or not going along to get along. Well, this caucus has been around long enough to recognize when short-term political considerations are sending us over a cliff, and we won’t let it happen on our watch,” Prusi said. “We’ll do whatever it takes to restore these priorities, and if others in this town are hell bent on making these kinds of mistakes, they’ll have to do it without our help. And anyone who suggests that there’s no time to consider these options should commit to skipping their Republican leadership meeting up north next weekend to stay here and do this right.”