Plan would aid education, cut funds for communities

7/17/2003

MONROE - If Tim Stotz receives his promised $2,500 in state scholarship money when he enters Monroe County Community College this fall, his windfall will come from Michigan's worst drivers, and not from the proceeds of the sale of tobacco products.

And the free laptop computers promised to each sixth-grade pupil could mean the city of Hillsdale won't be able to fill a vacant firefighter's position anytime soon.

Those are just some aspects of a 2003-04 budget agreed to by Michigan Gov. Jennifer Granholm, a Democrat, and Republican legislative leaders.

Ms. Granholm and the Republicans declared Tuesday that they'd struck a budget deal, but sorting out the details of the $37.9 billion plan proved slow going yesterday.

Lawmakers met in several conference committees, trying to hash out language in several budget bills for the fiscal year that begins Oct. 1. But bipartisanship was scarce on several issues, including school aid and revenue sharing money for local governments.

Among its highlights, the budget deal would:

w Put an undisclosed amount of money into a program that will provide laptop computers for all sixth-graders in the state.

The program is to be supported in part by federal dollars.

w Restore preschool and early childhood education funding to $72.8 million, as the governor recommended.

w Maintain funding for the Michigan Economic Development Corp., which some Republican lawmakers had wanted to cut.

w Put aside enough money to cover the increased number of welfare and Medicaid recipients caused by the poor economy.

To help balance the state's budget, the spending plan would cut revenue sharing to local governments by 3 percent across the board.

The revenue-sharing program distributes sales tax that Michigan collects to local governments as unrestricted revenues.

Tim Vagle, Hillsdale city manager, said the community has experienced cuts in revenue-sharing funds and has planned accordingly.

“This will be the third year of a decline of revenue-sharing money,” he said.

During a cut a year and a half ago, Hillsdale laid off its code enforcement officer and left several positions vacant, he said. Because of the planned 3 percent cut, a vacancy in the fire department and in public services will not be filled.

“[Revenue sharing] has been shrinking,” Mr. Vagle said. “This is not new news.”

The latest proposed cut will leave Hillsdale with $1,035,529, or $32,027 less in state revenue-sharing funds than it received the previous fiscal year.

Hillsdale County's 28 municipalities and townships received $5.1 million last year. If the 3 percent cut remains intact, the county will lose $153,943.

Monroe County's 25 municipalities and townships would receive $14.9 million, a $462,463 loss, under the proposed deal.

LaMar Frederick, supervisor for Bedford Township, said the township also anticipated a loss when it approved its $3.3 million budget in June.

“We've already balanced our budget,” Mr. Frederick said. “We're looking at a reduction in some of our services, such as reduced road projects by a little bit. We're going to keep our police cars for an additional six months.”

Lenawee County would lose $339,359 from the $11,311,975 its government entities received last year.

Money to pay for education enhancements would come in part from Michigan's worst drivers, those who rack up seven or more points on their license over a two-year period or who are convicted of a serious moving violation.

That part of the budget plan, which has been sent to the governor for her signature, calls for additional fees and fines ranging from $100 to $1,000. The extra $70 million expected to be raised from the “driver responsibility” fees will be used to restore the one-time $2,500 scholarships Michigan's graduating seniors receive for passing the annual Michigan Educational Assessment Program test.

Governor Granholm had proposed slashing the Michigan Merit Scholarships down to $500, arguing that the money used to pay for them - Michigan's tobacco settlement funds - should instead be dedicated to shoring up health care. But Republican legislators balked.

Tim Stotz's father, Steve Stotz, will be helping his son pay for his first college classes this fall. The Ida Township farmer is relieved that the scholarships will be restored.

“It makes a big difference,” the elder Mr. Stotz said.

Dundee Community Schools Superintendent Bob Black said he and his fellow superintendents are relieved that lawmakers may freeze basic educational funding levels at $6,700 per student.

But Mr. Black said he doesn't know what leaders in Lansing were thinking by buying laptop computers for sixth-graders.

“If we're short on money, spending $26 million on computers for sixth-graders wouldn't have been too high on my list” of budgetary priorities, he said.

The deal also calls for the creation of a $75 million reserve fund solely to stabilize educational spending.

Summerfield Superintendent Jack Hewitt said Governor Granholm's idea of a $75 million budget stabilization fund just for educational spending should help his and other districts stave off the painful mid-year budget cuts they had to make this spring.

“As difficult as the budgets have been since [Governor Granholm] came in, she's really been pretty kind to education. Nothing's worse for a school budget than to make a budget ... and then have a percentage of your funding cut mid-year,” Mr. Hewitt said.

The Associated Press contributed to this report.