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REPORT NO. 111, VOLUME 44-- THURSDAY, JUNE 9 2005 BUDGET PASSES HOUSE ON PARTY-LINE VOTE House Republicans glowed like proud parents Thursday as they passed without any Democratic support their budget bill for all of state government in the 2005-06 fiscal year that, unlike recent budgets in tight financial times, relies on relatively little new revenue and instead makes major spending cuts. Disturbed Democrats viewed the Republican bill as a Frankenstein-like creation with its amalgam of cuts to all parts of the government, especially in Medicaid eligibility, welfare cash assistance, job creation and the arts. The GOP has wagered heavily that the public prefers a budget that cuts spending to many programs instead of raising fees and taxes like the budget solutions of recent years that mixed new revenue and less severe spending curbs. Thursday's vote was the culmination of months of House Republican work to craft a budget bill unlike any in modern state history. Besides the policy approach of major spending restraint, Republicans also used an omnibus bill that put nearly all spending for state government into one bill instead of using the traditional 18 bills for each major piece of government. Democrats said the bill, which passed on a party-line 58-52 vote, is an outrageous abrogation of the state's responsibility to protect its most vulnerable residents. They also criticized Republicans for refusing to take up Democratic Governor Jennifer Granholm's proposed eliminations of tax exemptions and instead cut programs. Earlier in the day on the Capitol steps, Ms. Granholm castigated Republicans for passing a budget (HB 4831) that she said would shred the state's social safety net. Republicans did retreat on a handful of cuts that had been in the bill. Amendments adopted unanimously on a voice vote would fully fund the waiver that allows American Indians to attend public universities tuition-free, a program the GOP initially proposed eliminating. Another adopted amendment would keep open three State Police posts that Ms. Granholm called for closing by creating a 35 percent surcharge on goods made by state prisons. Completion of the House's version of the budget triggers tough questions that have loomed over its work all year. How can the gulf on the budget between Ms. Granholm and the Republican-led Legislature be bridged before the 2005-06 fiscal year begins October 1? How will Republicans who control the House and Senate meld their budgets when the House has three bills and the Senate 18? House Speaker Craig DeRoche (R-Novi) closed a week of at times rancorous debate over the budget with an olive branch to Democrats that "we need to come together and find a way to bridge the gap" in reference to the pending negotiations that lie ahead between the governor, House and Senate. "Philosophical differences do not bar compromise with the budget," he told reporters afterward in predicting they would complete the budget before the new fiscal year starts. "I don't think that our differences are going to stop us from doing our jobs that we were elected to do." The $39.7 billion budget contains spending for the departments of Agriculture; Attorney General; Civil Rights; Civil Service; Community Health; Corrections; Education; Environmental Quality; History, Arts and Libraries; Human Services; Information Technology; Labor and Economic Growth; Management and Budget; Military and Veterans Affairs; Natural Resources; State, State Police; Transportation; and Treasury; as well as community colleges, public universities, basic K-12 operations and the state's judiciary. Only capital outlay and funding for schools outside of basic operations will be handled in other bills. The budget does agree with Ms. Granholm on some points: increasing aid to K-12 public schools by $175 per pupil, funding rising Medicaid caseloads, slightly cutting the state's 28 community colleges, not harming revenue sharing aid to local governments (the House version includes a small increase) and closing some National Guard armories. But there are numerous profound differences between the House and Ms. Granholm. The House budget would end Medicaid eligibility for 43,000 residents, implement new and higher co-pays for certain Medicaid recipients and cut off welfare cash assistance for 15,000 cases January 1 and it would reduce the maximum monthly welfare check. It would sharply cut spending to Northern Michigan and Wayne State universities while increasing spending to several other schools, close two prisons Ms. Granholm wanted kept open and continue funding for a privately-run prison the governor wanted to defund. For a full breakdown of the bill, see Gongwer Michigan Report, June 7, 2005. Rep. Scott Hummel (R-DeWitt) said he preferred to focus on what the House budget did fund, not what was cut. The budget contains $5 billion in welfare assistance, $2.9 billion on protection and security, $10.3 billion on health care, $672 million to protect natural resources and $13 billion on education, Mr. Hummel said. "Would we like to do more? Of course we would. We all would," he said. "We only have a certain number of resources to help across this state. ... The state cannot continue to go to our taxpayers and ask for more money to fund things that are good causes." But Rep. Gretchen Whitmer of East Lansing, the top Democrat on the House Appropriations Committee, said the bill puts "corporate greed over kids in need." The bill preserves tax exemptions Ms. Granholm proposed eliminating and instead cuts welfare and imposes higher co-pays to participate in the MIChild program that provides Medicaid coverage to all uninsured children in the state. "Your budget clearly distinguishes the Republican Party from the Democratic Party in this state," she said. "Your budget is reckless and irresponsible - socially and fiscally." Rep. Alma Wheeler Smith (D-Ypsilanti) criticized Republicans for claiming their budget does not raise any taxes or fees when it contains new and higher co-pays for many on Medicaid. The Republican budget also lends its support to a new tax on mental health providers proposed by Ms. Granholm and a higher fee on access to Mackinac Island State Park. "We're just saying, 'What's $5 to that family?'" Ms. Smith said of the size of the new co-pay and co-pay increase. "We can put as nice a spin as we want to on what's happened within this budget, but in the end, because two-thirds of the population on Medicaid are children, they are going to take the brunt of the $600 million cut in services." But Rep. Bruce Caswell (R-Hillsdale), chair of the subcommittee that handles the Department of Community Health budget, said the cuts in Medicaid and new co-pays are regrettably necessary to keep whole funding for areas Ms. Granholm wanted to cut. Medicaid recipients would continue to be eligible for chiropractic coverage and graduate medical education would not be cut in contrast to the governor's proposals. Mr. Caswell said the new and higher co-pays are only fair considering what taxpayers pay to provide Medicaid coverage. "The taxpayers are stepping forward for these folks - they can do a little bit more," he said. Of the 43,000 people who would lose Medicaid eligibility - caretakers of children on Medicaid and 19- and 20-year-olds - Mr. Caswell said those who are truly poor would receive Medicaid coverage under the traditional method. "In each of these groups, if any of these folks qualify for Medicaid under any other criteria, they will be able to access it under those criteria," he said. "We are protecting the very poor and the disabled." But Democrats were having none of it. In response to statements by Republicans of pride in the budget, Rep. Chris Kolb (D-Ann Arbor) said, "I'm not proud of this budget. ... I truly believe we have balanced this budget on the backs of those who have the very least." Perhaps the most surprising part of Thursday's action was the Democratic decision not to offer any amendments. They adopted a Dirty Harry-esque "Go ahead: Make my day" approach with their decision not to offer any amendments to the bill. They think the bill contains such harmful spending cuts that there should be no confusion that Republicans are responsible for them. Ms. Whitmer said Democrats decided not to offer any amendments - they drafted more than 300 just in case - because the bill is bad enough on its own that trying to amend it would be like "perfuming a pig." "I think the vote they're going to cast on this budget is painful to so many people it should stand alone," she said prior to the vote. Twenty Republican amendments were taken up and all were adopted on voice votes. One removed an overlooked proposal to increase fees for fire inspections. Another added $500,000 for 0-3 children's programs. Another added funding for timber marking, an item Republicans said Ms. Granholm included in her revised recommendation. Pam Martell Consultant King-Chavez-Parks (KCP) Initiative Michigan Department of Labor & Economic Growth Bureau of Career Education Office of Postsecondary Services 201 N. Washington Square Victor Office Center, 4th Floor Lansing, Michigan 48913 [log in to unmask] 517-335-3009