The state still has a structural deficit to deal with and employee
layoffs will occur, even though one-time money through the federal
stimulus should help things through 2010, said Budget Director Bob
Emerson on Friday. 

Mr. Emerson said, "We still have problems in 2011.   We are not going to
grow out of this."

Making his comments during a taping of Michigan Public Television's "Off
the Record," Mr. Emerson it was difficult for the administration to come
up with its blend of $670 million cuts, which it announced last week. 

He said if Republicans want to come up with more cuts they can propose
them, but he added many lawmakers are looking to use stimulus dollars to
plug administration cuts.   He said if lawmakers don't want to approve
the administration's proposed reductions, they should still find other
areas of the budget to trim.

However, Mr. Emerson said he'd be "very surprised" if lawmakers who say
they want to fill the $1.4 billion deficit in the 2009-10 fiscal year
with only cuts actually do just that.

The administration is still analyzing what the federal stimulus means
for Michigan and what strings are attached to the dollars, Mr. Emerson
said.   But the state does know it won't receive budget stabilization
money until July 1.

But Mr. Emerson said the state's structural deficit will not go away
with the federal stimulus and that is why the administration is still
pursuing cuts and employee layoffs in the upcoming budget.

For instance, the governor has added members to the state parole board
in order to expedite the review of prisoners serving past their earliest
date of release.   That will mean more people will be let out of prison,
so staff cuts to the Department of Corrections should be expected.

Unions representing state employees are meeting with the administration
to discuss the proposed budget during two meetings in early March,
according to union officials.

However, the governor's spokesperson Liz Boyd said this week she was
unaware of any specific meetings taking place.   She did say the
administration would be meeting at some point with employee unions to
discuss the budget.