F.Y. '10 MINUS 17: DEMS NERVOUS ON SENATE CUTS

Many House Democrats are expressing concerns at the increasing possibility that they will be asked to approve budget bills largely reflecting the $1.2 billion in cuts passed by Senate Republicans.

The House is expected to take up budgets on Wednesday, but what the chamber will do with those budgets was unclear Monday given the Democratic concern not only about the cuts, but whether Senate Republicans will indeed support restoring some of the programs down the road.

As reported by Gongwer News Service on Friday, House Democrats and Senate Republicans have been discussing a scenario in which the House would pass budgets containing the Senate cuts, totaling $1.2 billion, but the Senate would later address restoration of some cuts through a supplemental appropriation, which could be tied to raising revenue to pay for those programs.

"A few of those budgets will be tough," said Rep. Barb Byrum (D-Onondaga), the majority caucus chair, should the House in fact move ahead with voting on the Senate budgets.

Ms. Byrum said members understand cuts and reforms need to take place to close the $2.8 billion combined general fund and School Aid Fund deficit, but there are certain programs the caucus wants to keep intact.

Monday, the possibility of the scenario going from the discussion phase to action appeared to increase.

Matt Marsden, spokesperson for Senate Majority Leader Mike Bishop (R-Rochester), said the House offered a proposal that Senate Republicans would review Monday evening.

"The House has made a strong proposal that is moving the process forward," he said. "It is a budget proposal that reflects the need to reduce government spending. It's more in keeping with the Senate desire to balance the budget through reductions."

As to where the negotiations stand, Mr. Marsden said, "There are still some discussions and negotiations that need to go on between the speaker and Senate majority leader. It would be premature to say there's a deal in place, but we certainly have moved the process forward by receiving a new proposal from the House today."

A spokesperson for Mr. Dillon did not return messages seeking comment on this latest development.

Liz Boyd, Governor Jennifer Granholm's press secretary, said the administration is "aware of various scenarios" in budget talks. Ms. Granholm has proposed raising $684 million in revenues through tax increases and the elimination of tax exemptions while also cutting $862 million in spending.

"Governor Granholm has made clear that she will not tolerate dangerous cuts that harm citizens or our ability to grow the economy and create jobs," she said.

Of the situation where Mr. Bishop and Mr. Dillon appear to be negotiating without Ms. Granholm, and the perception that they have cut Ms. Granholm out of the process, Ms. Boyd said, "Because the governor actually signs bills, she cannot by definition be cut out of the process."

Ms. Boyd said she would not speculate on the possibility of Ms. Granholm signing or vetoing a budget that came to her desk largely reflecting what Senate Republicans passed.

"We're working hard to ensure that a budget is in place by October," she said.

Rep. Richard Hammel (D-Flushing), second ranking Democrat on the Appropriations Committee, said he could not confirm what approach the House will take, but he said the chamber will be moving on budgets this week.

He said most of the Democratic members were briefed on the situation and some may be frustrated with the approach, but that's part of having a 67-member caucus.

"The best thing we can do is find an approach that works," he said.

It's expected that Appropriation members will start convening in budget workgroups on Tuesday, but that official conference committees will not be held that day.

Speaking on background, several House Democrats expressed concern not only for cutting certain programs, but for working out the timing of voting on those cuts and having a supplemental in place.

One Democrat said the scenario of relying on some taxes to backfill the cuts right before Republicans head to Mackinac Island for their biennial leadership conference would be tricky.

And it appeared whatever the House does will likely be influenced by the Democratic Caucus' reaction to this proposed scenario on Tuesday.

Rep. Joan Bauer (D-Lansing), who heads the higher education budget subcommittee, said she will continue to advocate for keeping the Promise Grant intact and hopes Senate members will come to an agreement on that point.

"I think many of my colleagues share my views with keeping our promise this year," she said.

Assurances that the Senate would indeed vote for revenues to restore a cut to the Promise Grant would be critical, she said, before the House acts.

But it appears that passing some of the appropriations where both chambers are close with the numbers will not receive too much resistance.

The only budget on which the House has yet to act is the Department of State Police (SB 253). Chair Rep. Richard LeBlanc said the House version of that budget is ready to be substituted, but he has not been instructed by Speaker Andy Dillon (D-Redford Twp.) to prepare for a vote this week.

If the House agrees to bills reflecting Senate Republican budgets, Senate Democrats could scuttle the plan by rejecting immediate effect on the budget bills. Twenty-five votes are needed to obtain the two-thirds majority to grant immediate effect, meaning at least four Democrats would have to join all 21 Republicans.

Without immediate effect, the bill would not take effect until late March 2010, essentially leaving the state without a budget in place for the first half of the fiscal year.

Senate Minority Leader Mike Prusi (D-Ishpeming) said he and the Senate Democratic caucus have made no decision about an immediate effect strategy at this point, but they remain opposed to the cuts Senate Republicans passed, such as those in revenue sharing, higher education, Medicaid and human services.

"Doing every budget at the Senate Republican level is not something I'm comfortable with," he said. "We'll continue to fight and vote for the priorities we expressed back in June."

Asked about the risk of relying on Senate Republicans to later pass revenue and spending increases in the new fiscal year, Mr. Prusi said, "That's where I'm not as comfortable as the speaker."

Sen. Gretchen Whitmer (D-East Lansing) said the development is surprising, to have the Democratic-led House potentially approve the Senate Republican budget with deep cuts in Democratic priorities. Such an approach assumes Senate Republicans would later agree to raise revenue to restore some spending.

"I don't know why any Democrats would vote yes," she said. "At this juncture, I can't imagine supporting anything like that. You would be relying on action from the majority leader that he has not shown any propensity to engage in, in the past. Words fail me."