It's called "FUZZY MATH" and the craziness of not
appropriating efficiently over the last 20, not 4,
years.
---- 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
Debate
Senate Fiscal Agency (SFA) Director Gary OLSON
today told the Senate Appropriations Committee
that the worst thing they could do is to do
nothing.
"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
<http://www.mirsnews.com/leg_bio.php?lid=120>
(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
<http://www.mirsnews.com/capsule.php?gid=822#12854%20>
," 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
Fund
- Not pay the skipped higher education $138
million payment from the current year
- Cutting state aid to libraries by $12.1
million
- Cutting Fire Protection Grants by $10.9
million
- 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
<http://www.mirsnews.com/leg_bio.php?lid=121>
(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
<http://www.mirsnews.com/leg_bio.php?lid=125>
(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
[log in to unmask]
