LANSING ? Michigan Senate Republicans moved Wednesday toward a budget that slashes funding for local governments, roads and economic development programs, the 21st Century Jobs Fund and the Pure Michigan advertising campaign – but doesn’t raise taxes.
Financially battered local governments would suffer another blow under a budget plan approved by the Senate Appropriations Committee that would cut their revenue sharing payments from the state by 4 percent.
On economic development, the general government bill bludgeons the 21st Century Jobs Fund with a 65 percent cut to save $48.5 million. And the Senate ditched funding from a new tax on cars rented near Detroit Metropolitan Airport urged by Gov. Jennifer Granholm and majority House Democrats to fund the Pure Michigan advertising campaign.
The Republican-controlled committee pressed ahead with a slashed Department of Transportation budget that assumes no increase in the gasoline tax as road interests have urged. However, it would ensure the state receives $475 million in federal road matching funds by redirecting $84 million from the Transportation Economic Development Fund, highway maintenance and other sources. The Transportation budget also contains a prohibition on any expenditures toward the Detroit River International Crossing unless the Legislature authorizes the bridge.
The budget action came on a day when the Senate moved close to completing action on Senate-written budgets.
The full Senate passed the noncontroversial budgets for the state’s judiciary (HB 5883 ) and the Department of Agriculture (HB 5875 ). Meanwhile, budgets for the departments of Energy, Labor and Economic Growth (HB 5884 ), Military and Veterans Affairs (HB 5885 ) and Transportation (SB 1164 ) as well as general government (HB 5880 ) were reported to the full Senate by the Appropriations Committee.
Action on the MDOT budget was particularly notable because that budget bill was supposed to originate in the House, but that chamber has yet to act on the legislation. So the Senate instead used a Senate bill to act.
The only budget bills remaining in a subcommittee are those for the departments of Human Services (SB 1158 ) and State Police (HB 5888 ).
Democrats tried to restore the revenue sharing cut, but Republicans rejected their effort on a party-line vote.
“We sat in committee maybe a month ago listening to some local officials talking about how revenue sharing impacted them and the impact is devastating,” said Sen. Deborah Cherry (D-Burton). “It’s not for fluff. It’s for very basic services. We’ve put local governments in a Catch 22 situation because we also limit how they raise revenue.”
Sen. John Pappageorge (R-Troy), chair of the Senate Appropriations General Government Subcommittee, said he regretted the cut, but said it could be mitigated if the Legislature passes his plan to cut the pay of every public employee by 5 percent.
“I don’t think anything pains me more than what’s happening to revenue sharing,” he said.
Here’s how the committee acted in various departments and budget areas:
STRATEGIC FUND: Besides the huge cut to the 21st Century Jobs Fund, which uses revenue from the state’s share of the national tobacco settlement, the budget bill also dumped the $9.5 million in supplemental funding provided for the Pure Michigan advertisements.
Democrats sought to restore 21st Century funding to the House-passed level, which would be a 3.1 percent cut from current year funding, but their amendment was rejected on a party-line vote. Still, Sen. Valde Garcia (R-Howell) said he had misgivings about the size of the cut and might oppose the bill on the floor.
“I have some reservations about how deeply we cut this particular program, especially since it is about creating jobs for the future,” he said.
Sen. Glenn Anderson (D-Westland) slammed the scope of the cut.
“It’s unconscionable in my opinion to make such a draconian cut to a program whose purpose is to create jobs,” he said. “We should be doing everything possible to ensure this program’s success.”
But Pappageorge said the state lacks the money to reauthorize current-year funding for the program. “There’s no money for it,” he said.
Sen. Michael Switalski (D-Roseville), chair of the Senate Appropriations Committee, said the bill essentially converts the bonds the state sold when it securitized the tobacco settlement to provide the funding for the 21st Century fund into deficit bonds.
“You would never in your right mind bond to fund current operations,” he said. “That’s a total no-no. You can’t do that.”
Overall, the budget contains $108.2 million, a 12.5 percent cut from the current year.
TRANSPORTATION: Senate Republicans said they had come up with a way to make sure the state gets $475 million in federal matching funds for state and local roads despite falling revenues for roadwork.
The state needs to put up $84 million in matching funds to obtain that money. Granholm’s budget assumed the money would not materialize and the state would lose the matching funds to drive home the need for new revenue.
Senate Republicans filled the hole by taking $84 million and putting it into the road and bridge program to qualify for the federal money. The $84 million would come from cuts totaling $15.1 million from the Transportation Economic Development Fund balance, $12 million in current Transportation Economic Development Fund revenue, $10.9 million in other State Trunkline Fund reductions, $40.3 million to highways maintenance and $5.6 million in other cuts from items funded with Comprehensive Transportation Fund revenue.
“I thought it was critical that we match the federal dollars,” said Sen. Bill Hardiman (R-Kentwood), chair of the Senate Appropriations Transportation Subcommittee.
But Hardiman said he couldn’t support raising the gasoline tax to do it.
“I think this is just the worst time to raise taxes,” he said. “We’re caught in a very difficult place.”
If the Legislature can pass some of the Senate Republican reforms like cutting public employee pay and requiring a greater contribution toward public employee health insurance, the cuts could be revisited, Hardiman said.
Cherry expressed exasperation that Senate Republicans refuse to address an obvious shortfall in transportation revenues.
“We have to – oh my God – raise the gas tax,” she said. “I really wish that at some point we would start dealing with the issues.”
Sen. Liz Brater (D-Ann Arbor) said she objected to the proposed 51 percent cut to the state’s welcome centers.
“That’s cutting off our nose to spite our face,” she said. “We’re trying to attract tourism in this state.”
The budget, which totals $3.27 billion, all in restricted funds, cleared the committee on a party-line vote. That’s a 0.5 percent cut from the current year.
D.E.L.E.G.: Senate budget-writers aren’t on board with the House plan to pay for fire inspection services through making currently illegal fireworks legal, at least not yet. Instead of using $2.6 million in new fee revenue, like the House, to pay for the program, the Senate simply placed $2.6 million in general fund money to pay for it.
The DELEG budget overall contains $1.486 billion, a 0.8 percent increase from the current year.
ATTORNEY GENERAL: The committee approved a budget for the Department of Attorney General that is 1.2 percent lower than the current year at $73.32 million. It dumped boilerplate language included by the House that would have prohibited the department from spending any settlement proceeds without legislative appropriation.
CIVIL RIGHTS: The Department of Civil Rights would take a 7.1 percent cut under the Senate version for its budget, falling to $12.8 million.
EXECUTIVE: The committee did not bite on the additional 2.9 percent that the House cut from the Executive Office, instea




