REPORT NO. 119, VOLUME 48-- MONDAY, JUNE 22 2009

GOAL: GET BUDGETS READY FOR CONFERENCE BY WEEK'S END

As lawmakers work through the 2009-10 budget, the goal for the end of this week appears to be readying all 15 appropriations for conference committees, with leaders coming together over the summer break to talk about targets.

Facing a $1.7 billion estimated deficit in both the general fund and School Aid Fund, legislators and Governor Jennifer Granholm are debating how to meet that gap at a time when Michigan is receiving hundreds of millions of dollars in one-time federal stimulus revenue.

House Democratic leadership has instructed members to pare $525 million from the budget, while Senate Republican leadership has set its sights on a $1.2 billion budget chop.

Already, the Senate has proposed cuts Ms. Granholm has opposed, including eliminating the Michigan Promise Grant. However, discussions are going on in both chambers about how to cut the higher education budget when operational expenses have to be held harmless due to the federal stimulus (see related story).

The Legislature also is in disagreement with Ms. Granholm over her proposal to eliminate the Department of History, Arts and Libraries (SB 247[log in to unmask]" alt="*">).

Budgets are the name of the game this week, which typically is the period where the Legislature looks to wrap up the budget cycle completely.

Officials in the Senate have said they intend to pass all the budgets before them by the end of the week.

That, of course, has not always been the case as in 2007 when budget and tax negotiations led to a brief government shutdown in the fall.  

Complicating the picture this year is Chrysler's recent emergence from bankruptcy and General Motors recent declaration of bankruptcy.

At this point, second house budgets are being readied for action as they are assigned to the Senate calendar and the House is expected to vote on budgets as they emerge from the Appropriations Committee, which will begin meeting Tuesday afternoon.

Last week, the House stepped up that schedule by discharging the budget combining the Departments of Natural Resources and Environmental Quality without a formal hearing by the Appropriations panel. Both the House and Senate have proposed merging those two departments (HB 4446[log in to unmask]" alt="*">, SB 251[log in to unmask]" alt="*">).

While the budget bills are expected to get to conference, having those members meet yet this week is unlikely to happen.

Both the House and Senate will be on break between June 30 and July 9.

Some lawmakers have been pushing to complete the budgets related to education as schools get ready for classes to begin and local governments have their fiscal year start July 1.

However, everything is up in the air until the quadrant leaders agree to budget targets along with the Granholm administration.

Officials have been meeting on this issue, but no agreement has been made on how much should exactly be cut from the budget and how much stimulus should be used.

Lawmakers in the House have been notified of regular Tuesday through Thursday session days being scheduled for the remainder of July, but the Senate has session days scheduled for two weeks that month.  

On Monday, House Speaker Andy Dillon (D-Redford Twp.) said, "The House plans to move quickly this week to pass all budgets on the table so we can begin resolving our differences with the Senate versions and move forward. There are a lot of extremely tough decisions to be made. The sooner we get this process underway in conference committee, the sooner we will get Michigan's fiscal house in order."