It's called "FUZZY MATH" and the craziness of not
  appropriating efficiently over the last 20, not 4,

  ---- Original message ----

    Date: Wed, 12 Sep 2007 09:08:20 -0400
    From: Cheri Lay <[log in to unmask]>
    Subject: Re: MIRS Capitol Capsule, Tuesday,
    September 11, 2007- Gary Olson
    To: [log in to unmask]

    I read this and all I can do is shake my head in
    bewilderment! Who elected these people?

    On 9/12/07 8:07 AM, "Redmond, Rudy (DLEG)"
    <[log in to unmask]> wrote:

      Olson Presents All Cut Options — Adds Fuel To

      Senate Fiscal Agency (SFA) Director Gary OLSON
      today told the Senate Appropriations Committee
      that the worst thing they could do is to do

      "Defaulting on bonds is an option," Olson
      explained after noting that the state will need
      to make some $37 million in debt service
      payments in early October and without some sort
      of passed budget, there is no legal authority to
      make those payments. "But, it would take years
      if not decades [for the state] to recover."

      Olson made his remarks while presenting cuts
      outlined by Senate Majority Leader Mike BISHOP
      (R-Rochester). Recall that last Friday Bishop
      announced he was proposing $1 billion in cuts
      and spending reforms.

      In that press release, the Senate Majority
      Leader promised that the SFA would also present
      other cut options to the Senators, which is
      exactly what Olson did (See "Bishop Proposes $1B
      In Cuts
      ," 09/07/07).

      Essentially, the SFA chief began by explaining
      the following budget reality:

      - That combined, lawmakers essentially punted on
      a $1.3 billion budget deficit from the current
      fiscal year by borrowing against the state's
      tobacco settlement dollars and other one-time
      fixes and borrowing gimmicks

      - That $1.3 billion has now moved over into the
      Fiscal Year 2008 budget year column. However,
      added to that column to maintain the so-called
      "continued services" budget are economic
      increases for workers funding for rising
      caseloads and other items — meaning the budget
      hole grows to some $1.75 billion.

      - To date, the House-passed budget bills have
      overspent the so-called "continuation budget" by
      $235 million. The Republican Senate-passed
      budgets have come in $176.2 million below the
      $10.08 billion General Fund continuation
      services budget.

      - The SFA and the House Fiscal Agency have been
      doing research on continuation budgets and see
      no constitutional challenge to continuing the
      budget resolution for one-week, two weeks, one
      month or longer. However, he warned that the
      longer the state overspends into the fiscal
      year, the harder cuts are to make.

      - That right now, revenue estimates are holding
      firm and that a continuation budget would be
      pegged to existing budget revenues.

      Olson also outlined a series of cuts that could
      be used to further balance the budget (Bishop's
      plan brings the budget deficit down to $656.4
      million). Included in those additional cut
      options are:

      - Eliminating of statutory revenue sharing,
      saving $398.7 million

      - Redirecting $75 million in 21st Century Jobs
      funds to the General Fund

      - Cutting $25 million from the Healthy Michigan

      - Not pay the skipped higher education $138
      million payment from the current year

      - Cutting state aid to libraries by $12.1

      - Cutting Fire Protection Grants by $10.9

      - Cutting $77 million in School Aid Fund
      categorical spending

      - Cutting $14 million in secondary road patrol
      grants from the State Police

      - Eliminating Michigan Promotion Funding, saving
      $5 million

      - Cutting Comprehensive Transportation Fund
      Grants (non-constitutional), saving $78 million

      - Changing in state law to release prisoners
      earlier or change sentencing guidelines and the
      shuttering of three to four prison facilities

      The list was long and clearly rattled some of
      the Democratic members on the panel.

      "I'm speechless," said Sen. Liz BRATER
      (D-Ann Arbor). "I hope I can frame these
      questions, but after the picture you painted
      here, I'm even more distressed about this budget
      picture than I was before."

      At one point, under questioning by a Republican
      member, Olson gave the GOP at least some cover
      politically for a tax increase. He argued that
      statistically, there's not much impact on the
      state's economy by either raising or cutting the
      sales tax by one-penny.

      "Yes, a tax increase or a tax reduction is going
      to take money out of someone's pocket or into
      someone's pocket, but it's also going to impact
      state and local government ability to deliver
      services," Olson added. "I think in an overall
      sense, and we've got to understand when we talk
      about tax increases at the state level it's a
      very small percentage of our state's economy."

      Sen. Irma CLARK-COLEMAN
      (D-Detroit) asked, "If we move forward with the
      Bishop proposal, with all of these draconian
      cuts, what does this do to our bond rating?"

      "What the rating agencies are looking for is the
      fundamental ability of state and local
      governments to pay their obligations," Olson
      added that it's because the state's used
      one-time spending solutions that its credit
      rating has been souring.

      "I do believe if fundamental decisions are made
      to reduce spending that will not be detrimental
      to our bond rating," he added. "It may have
      other political fall out."

      He then reminded Clark-Coleman and the other
      members present that such decisions are
      "decisions that you as elected officials, not
      me, not others, have to make to get to a
      fundamentally balanced budget."

Gloria Aquino Sosa, MA, LPC, NCC
Mental Health Clinician
Easter Seals Centro Latino
Clinical Supervisor, SCC, INC.
Doctoral Candidate & Instructor
Oakland University
Department of Counseling
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