LANSING ? President Bush’s $2.57 trillion budget could end up costing the state in a number of areas, especially in regards to Medicaid spending, Gov. Jennifer Granholm’s Washington aide said. Beyond Medicaid, the state is worried about suggested cuts to community development block grants and programs that help pay for police officers.

“We’re hugely worried about this budget,” John Burchett said.

According to The Associated Press, total federal spending in Michigan could increase by some $300 million under the budget, from $9.8 billion to $10.1 billion. But Mr. Burchett said he would be shocked if the state actually saw increases on that level.

State officials are still analyzing the $2.57 trillion budget presented by Bush to Congress. Federal revenues are a critical element to the state’s overall budget, which will be presented by Granholm before the Senate and House Appropriations committees on Thursday.

The biggest problem could be in Medicaid, Burchett said. While initially the federal budget indicates spending could increase by $230 million, to $5.38 billion, Burchett said the federal budget would actually undercut expected increases in Medicaid population.

Medicaid increases are expected to average 7.8 percent, and while the federal budget could provide a 4 percent increase for the state that means a gap the state would have to make up, Burchett said.

In fact, nationally the budget projects Medicaid cuts of some $45 billion over the next 10 years, which could result in cuts to $1.6 billion for the state, Burchett said.

“We’re going to fight like hell to stop these cuts,” Burchett said. “All the governors, Republican and Democratic, are going to fight these.”

Other worries in the budget could include a cut of nearly one-third on federal community development block grants, he said. In the current budget, those grants amount to $120 million to $140 million to Michigan communities (since many of the grants go directly to local communities, the state does not have an exact number on the amount spent in the state).

All workforce training programs are being lumped into a single pot and that could mean cuts overall of $200 million to those programs. The effect on the state is still uncertain.

Burchett was also concerned about the funding allocated for planning on the rare isotope accelerator that both Michigan and Illinois are competing for. In the current budget just over $9 million is being spent on planning; in the latest proposal, the president calls for $4 million.

Last week, the congressional delegations of both Michigan and Illinois urged the president to propose $25 million in planning.

If there was any good news in the proposed budget, Burchett the best was probably that Mr. Bush was using $284 billion as the basis for transportation funding instead of the $256 billion the 2004-05 budget started with. However, the U.S. Senate last year called for $318 billion in spending on roads and bridges, and Burchett said that is the minimum needed for projects nationwide. Overall, the budget is very frustrating, Burchett.

“We now have this massive budget deficit so they have to cut all these programs that help average folks, and yet the president is asking for a permanent extension of tax cuts for wealthiest people in country.”

But he also said the budget is obviously a work in progress with Congress.

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