LANSING – While a bleak picture is likely to be painted in the governor’s 2009-10 budget, which will include layoffs as the proposal seeks overall general fund cuts of at least $600 million, it appears there will be no cuts to revenue sharing nor to Michigan’s 28 community colleges. But the state’s per-pupil foundation grant to K-12 schools, as well as some categorical funding, will likely be cut for the upcoming year; by how much was unknown, and the state’s four-year universities will be cut by 3 percent.

Governor Jennifer Granholm may also call for paroling up to several thousand non-violent prisoners who have served at least 120 percent of their minimum sentences. She has already called for closing three correctional facilities.

The Department of Community Health is also expected to be cut by $100 million, but anticipated additional federal funds in Medicaid are expected to help shore up overall general fund spending in the budget.

State Budget Director Bob Emerson is set to announce Granholm’s budget on Thursday before a joint meeting of the legislative appropriations committees. With the state facing a $200 million shortfall in funding for the current fiscal year and $1.4 billion in less revenue for the fiscal year that begins October 1, the budget outline is expected to be bleak.

But already some officials are saying with a federal stimulus package expected to be enacted soon the proposal will be quickly reworked to include those funds.

Emerson, according to sources who spoke on background, has apparently already told legislators that the administration will not use stimulus money to conduct state operations.

Congressional officials announced Wednesday afternoon that a deal had been reached on a federal stimulus package totaling $789 billion, with the chambers expected to vote on a final bill in the next few days.

Leslee Fritz, spokesperson for the State Budget Office, said the budget presentation is not being changed to account for a deal being reached by congressional leaders. She said the presentation will include discussion of the federal stimulus package, but as the governor outlined in her State of the State address, the budget won’t grow in terms of the stimulus.

But sources said the administration does intend to use about $500 million of the federal stimulus money for a variety of programs, including Medicaid, in the hopes that when the federal stimulus runs out by 2011, the economy will have rebounded and those programs can continue being funded at that elevated level.

No Medicaid population cuts are expected to be included in the executive budget.

While there is expected to be fewer than 2,000 state employee layoffs, how those layoffs would roll out through departments is unknown.

State workers have been anxiously awaiting for word on how many could see the ax. At least one department director has sent an email to all department employees, obtained by Gongwer News Service, saying that through a variety of cuts – such as eliminating travel and holding vacant positions open – “we will do everything we can to avoid layoffs.”

But the email also urges workers familiar with the budget to outline to “family and friends” the economic and spending pressures the state faces.

Some of the biggest hits will occur in the Department of Corrections. Sources said Granholm will push for the parole of many classified non-violent prisoners who have served well in excess of their minimum sentences. While specific numbers were not available, sources said the administration said as many as several thousand prisoners could be affected.

The administration is also looking at closing three correctional facilities.

DCH and the Department of Human Services can each expect about $100 million in cuts, sources said.

Revenue sharing will be held flat while community colleges would be spared under the budget.

Community colleges are being spared because more residents are attending those schools for retraining and there is a perception the colleges have held a better line on tuition increases than the 15 public universities, sources said.

That action could further exacerbate some growing tension between the universities and community colleges. The current budget is one of the first where the increases for community colleges were higher than that for four-year universities.

Granholm may also attempt to include language in the budget to bar the four-year schools from raising tuition. Previous attempts to that have always failed because of the provisions of constitutional autonomy, however.

Sources said the universities may be ready to push back on their own, saying that if they all froze tuition or raised it by no more than the rate of inflation, then the state would be on the hook for an estimated $70 million in income tax credits due families of students and required under PA 7 of 1995.

It does not appear a continuation of a trooper school will be included in the governor’s proposal. Nor will there be funding for wetlands oversight in the Department of Environmental Quality, which the governor outlined in her address last week.

While Ms. Granholm said she will call for the elimination of the Department of History, Arts and Libraries, several lawmakers, including Democrats, are warning she will have a tough sell of the proposal.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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