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Published: Sunday, 1/23/2005

Already-svelte Michigan budget looks for more places to pinch

BY STEVE EDER
BLADE STAFF WRITER

Michigan s budget architects admit that four years of financial belt-tightening is beginning to cause a collective stomachache for schools and health-care programs relying on the state s piggy bank.

On Feb. 10, Michigan Gov. Jennifer Granholm will unveil her penny-pinching plans to balance the 2006 budget that accounts for about a $750 million revenue shortfall. That same day, the governor will present an executive order to erase an estimated $350 million deficit on the current fiscal year budget.

With revenues falling short of estimates and costs climbing yearly, Michigan budget office spokesman Greg Bird admits that it is getting tougher to make cuts, while protecting core services.

It s getting tougher because we ve already made cuts, so now we are making cuts on top of cuts, he said. Any more cuts are going to severely hurt the services that we provide.

Since Gov. Granholm took office two years ago, lawmakers have been forced to remove almost $3 billion from the books to stay out of the red, Mr. Bird said. Lawmakers from both political parties have authorized tapping into short-term fixes and other rainy day funds to cope with the financial troubles.

Even though the deficits aren t as severe as they were a year or two ago, their flexibility in how to deal with any kind of a deficit is constricted because they ve emptied out all the cookie jars and they ve gone through all the gimmicks, said Bill Ballenger, publisher and editor of the newsletter Inside Michigan Politics.

While the ensuing cuts won t be as dramatic as those leveled in recent years, they ll still be quite painful, Mr. Ballenger said. The Democratic governor and Republican-controlled Legislature, he said, are hunkering down in the preparation for the budget challenges ahead.

Everybody is angry, Mr. Ballenger said. Schools have actually been harmed less than anything else, yet they are hurting too. Higher education is hurting. One of the big drains is Medicaid.

State Rep. Scott Hummel (R., DeWitt), the incoming chairman of the powerful House Appropriations Committee, said his party wants to take a different approach to budgeting. Typically, spending is based on money allocated during the previous cycle, but Republicans say they want to start building the budget from ground-zero installing a performance-based budgeting system.

The system will call for identifying a set of funding priorities such as education, public safety, environment, and human services and determining where money should be spent.

With each of these priorities, we ll be ranking the things we need as a state, he said. I m assuming that there will be a lot more programs and areas where we [want to] spend money than there is money.

Then, he said, We are going to draw a line. Some people will be above that line and some will be below that line.

The Michigan Congress of Parents, Teachers and Students, a nonprofit organization representing more than 90,000 parents statewide, is nervously hoping that public education will continue to be a priority.

So many school districts have done such a good job of keeping things to a minimum, said Donna Oser, the organization s administrative director. They ve made significant cuts, but they ve tried not to make the cuts that are near and dear to parents and children.



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