$47.4B Michigan budget OK'd in record time

5/27/2011

LANSING -- The Republican-led Michigan Legislature, acting with a swiftness not seen since the early 1980s, passed a new state budget Thursday that Gov. Rick Snyder says accurately reflects Michigan's fiscal reality even as critics decry cuts to education and key services.

The Republican governor pushed hard to complete his first budget in record time, a mission completed at the fastest pace in 30 years. Mr. Snyder earlier this year gave Senate Majority Leader Randy Richardville and House Speaker Jase Bolger clocks that count down to May 31, urging lawmakers to finish the budget before time expired. Lawmakers apparently got the message, putting a $47.4 billion spending plan in place four months before the fiscal year starts Oct. 1.

The last time the budget was passed before Memorial Day was in 1981, a budget spokesman said.

"We did have to cut a lot from this budget to have it successful for the long term. So I do appreciate people that are making sacrifices as part of this process," Mr. Snyder told reporters. "It's not something to be underestimated or glossed over. But it does set a foundation for the future."

Early completion of the budget gives school districts and local governments whose budget years start July 1 some certainty about state assistance as they set their own budgets -- even though many school and local officials don't like what's in the plan.

It also avoids the deadline drama that engulfed recent legislatures as they struggled to put a budget in place before Oct. 1. In 2007, the state endured a four-hour, partial government shutdown after the GOP-controlled Senate and Democrat-led House missed the deadline over differences on tax increases.

"This is a historic moment . . . sort of one for the record books," Rep. Chuck Moss (R., Birmingham) said as work on the 2011-12 budget wrapped up.

Democratic lawmakers said the budget bills will force students and the poor to shoulder the brunt of the budget cuts.

The measures "force schools to increase class sizes, cut band and arts programs, sports, and after-school clubs, and eliminate advanced placement classes," said state Sen. Steve Bieda (D., Warren). "This is not a statement that we should be making. Cutting schools will make our state less attractive to business and investment."

The Michigan Education Association, the state's largest teachers' union, launched television ads accusing lawmakers who voted for the bills of giving businesses a huge tax break at the expense of education.

The Senate approved the final two-bill package Thursday by votes of 21-17 and 23-15. The House approved the measures earlier in the afternoon on votes of 62-47 and 59-50. Both chambers passed the bills along party lines, with most Republicans voting in favor and all Democrats opposed.

The plan cuts the state's minimum per-pupil foundation allowance for public schools to $6,846, a drop of roughly 6 percent. That cut includes a $300-per-student reduction. There's also a $170-a-student reduction that's already on the books but was not felt this school year because the drop in state funding was filled with extra federal funds.

Some districts could shrink the funding decrease by $100 a student if they follow so-called "best financial practices," such as consolidating services or having school employees pay at least 10 percent of their health care premiums. Another $100 a student, on average, will go to all districts to partially offset rising retirement costs, although the amount will vary by school district.

State aid to universities will drop 15 percent across the board. Universities would lose more state aid if they don't limit tuition increases to roughly 7 percent this fall. State aid to community colleges will drop by about 4 percent.

Most able-bodied welfare recipients face a stricter four-year lifetime limit to receive benefits. State-reimbursed indigent burials are now restricted to cases where the deceased's body is not claimed. The disability assistance monthly payment will be cut to $200 for new applicants, down from $269.