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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."
>