BUDGET COMPLETED FOR 2005-06
Break out the funny hats and noisemakers, it's a happy new fiscal year for Michigan as Governor Jennifer Granholm signed the remaining major elements of the 2005 -06 budget while it was still daylight on the final day of the old fiscal year.
"Despite continued struggles with a changing global economy, we have provided Michigan citizens with a fiscally responsible that both protects our quality of life and grows our economy," Ms. Granholm said in a press release.
House Speaker Craig DeRoche (R-Novi) took credit for House Republicans saying they had succeeded in balancing the budget without raising taxes or fees. "For three years, the Granholm administration has relied on a scheme of tax and fee increases to balance the state's budget, and our economy, families and workers have suffered as a result. This year, I'm very proud to say that scheme was stopped."
Earlier in the week, Senate Majority Leader Ken Sikkema (R-Wyoming) issued a statement also saying Republicans were proud to have completed the budget with no major tax and fee changes.
Ironically, the budget is actually not quite complete. In what has become an almost annual rite, the capital outlay budget - which funds the state's building construction budget - remains in legislative committee and will be enacted later on. And, both the governor and legislative leaders say a supplemental will soon follow that could include money to keep open three State Police posts whose funds were not included in the new budget.
Most the attention on the budget came as part of a line item veto of the omnibus budget, HB 4831, PA 154, that ends funding for the Michigan Youth Correctional Facility in Baldwin (see related story).
There are other vetoes which will draw some attention, especially in the Department of Transportation budget, SB 281,PA 158. In that budget, Ms. Granholm line-item vetoed some 25 individual road projects specified in the budget by legislators that worth $23.2 million. Such "parochial" projects undermine the constitutional authority of the Transportation Commission, she said. The projects themselves were not bad, but the process naming them was and decisions on such projects should be made by transportation and engineering professionals, she said.
However, she worried about the potential loss of the funds for construction projects generally and urged the Legislature to restore the funding in a supplemental appropriation that does not earmark the money.
Mr. DeRoche said the vetoes demonstrate the governor is using the budget more as an experiment in social in social engineering than a tool to aid projects that will have a direct impact on the state's economic recovery. "This administration needs to realize that in order for Michigan's economy to grow, we need to build roads where people live, work and pay taxes, not where we wish they live, work and pay taxes," he said.
Also cut in the budget was $500,000 for a state road project on Mackinac Island.
The Transportation budget totals some $3.4 billion, none of it in general funds.
That omnibus budget, which totals some $17.3 billion, less than $7 billion in general funds, also includes the budgets for community colleges, higher education, the Departments of Community Health, Education, Environmental Quality and Natural Resources along with Corrections.
Community Health is the giant in that budget, totaling some $10.3 billion, $2.95 billion in general funds, and had no vetoes.
Also veto free was higher education, totaling $1.73 billion, $1.58 billion in general funds, for the state's four-year colleges, and the state's 28 community colleges, whose portion totaled $281.3 million, virtually all of it in general funds. And Natural Resources will see a total expenditure of $272.9 million, $25.6 million in general funds, with no vetoes in its appropriation.
The Department of Education budget, totaling $117.8 million with $16.5 million in general funds, saw vetoed funding for the Standard and Poors' contract, which specifies that "$350,000 shall be expended for benchmarking training services and district-level written report."
Environmental Quality saw vetoed for several projects in the Muskegon area, a nutrient study on White Lake and an assessment of oil and natural gas contamination in Little Black Creek. The budget totals $455.3 million, with $31.8 million in general funds.
The School Aid budget, HB 4887, PA 155, saw $250,000 vetoed that would have gone to Ferris State University to study the effectiveness of the Freedom to Learn program. Ms. Granholm said between federal funding and FSU's operations there should be enough money to conduct the study. The budget, which totals $12.8 billion, $11.4 billion in state School Aid Fund monies, includes an increase in the per pupil grant of $175 to a base allowance of $6,875 per student.
Some of the widest array of vetoes came in the Department of History, Arts and Libraries, SB 274, PA 157, which is one of the state's smallest budgets totaling $53.9 million, $41.8 million in general funds.
The Legislature cut grants to libraries and local arts more than Ms. Granholm recommended, so she vetoed about $856,000 in four programs - for state and local history societies, for Michigan History Day, for lighthouse grants and for preservation grants and access to the Michigan project - and urged the Legislature to re-appropriate the funds for libraries and arts grants.
She did not veto $1.5 million that she originally urged the Legislature not fund for the Mackinac Island State Park Commission. But she called on the commission to identify the $200,000 in savings it said it could find and use that money for aid to libraries and arts grants.
Dennis Cawthorne, chair of the commission, said the body has now identified $100,000 and is implementing those cuts. He said more work needs to be done on determining an increase in rental fees on bicycles.
There were no vetoes to the $550.8 million State Police budget - the most contentious budget of the last several weeks. But in approving SB 280, PA 159, Ms. Granholm reiterated her desire that a way be found to keep open the State Police posts at Groveland Township, Grand Haven and Iron River. The budget has $235.4 million in general funds. There were no vetoes in the budget.
There were also no vetoes in the Department of Labor and Economic Growth budget, SB 276, PA 156. The budget totals $1.3 billion.