In this issue of Lansing Update:
- Budget Deficit Worsening, State Could Be $1.1 Billion in Red By May
- Speaker Dillon Releases Budget Fix Proposal
- House Panel Addresses Prisoner Identification Problem
- House Appropriations Committee OKs Executive Order
Significant concern regarding the state’s ongoing financial crisis was raised this week as state budget officials issued a warning that the May Revenue Estimating Conference may cut approximately $200 million from the current year’s revenue estimate. The state’s current fiscal year budget is already deficient by some $940 million.
Compounding the budget problem was news from State Treasurer Robert Kleine, who told an assembled audience during the week that the state’s common cash could be negative $400 million by May. The state’s common cash is basically Michigan’s checkbook, which could be in a deficit months earlier than it has in the past.
Should the state be unable to work its way through the deficit by May, according to the state treasurer and the governor, the real possibility exists [Link no longer available —Ed.] of shutting down certain state services and possibly laying off workers. Republicans have stated [Link no longer available —Ed.] that such a scenario is more of a scare tactic for the general public to buy into a tax increase.
Several departments have already begun evaluating ways to cut their budgets and are preparing to do without nonessential services in the foreseeable future. Announced this week was news that Michigan Surgeon General Dr. Kimberlydawn Wisdom will have her $158,883 salary cut and the position cut to a twelve-hour workweek. The Governor has also issued executive directives that reduces state spending in ten different categories.
The state has not suspended its operations due to a cash problem since the 1950s. According to the governor’s spokesperson: “None of this should come as a surprise.”
After promising to release an “innovative” plan designed to solve the state’s economic disaster, Speaker of the House Andy Dillon (D-Redford) this week announced a plan [Link no longer available —Ed.] to inject some $500 million annually into the state’s coffers through increased taxes on utility companies. The speaker has yet to release full details of his plan, but has disclosed that it would rescind Public Act 141 of 2000, which brought energy deregulation and open competition to the state, thereby ending a monopoly that companies such as DTE Energy and Consumers Energy enjoyed.
A significant result of the monopoly’s demise has included substantial cost-saving measures for Michigan’s non-public schools. Since the enactment of P.A. 141, over 200 Michigan Catholic and other non-public schools, through the Michigan Association of Non-Public Schools Energy Public Policy Energy Committee, have saved over $3 million in utility costs.
The House Judiciary Committee this week took testimony on legislation that would give released prisoners needed assistance on their journey back into society. House Bills 4525, 4527 and 4528 would allow the Department of State to accept prisoner identification cards as a source document for issuing driver’s licenses to those released from prison.
Those who support the legislation have brought to the committee’s attention the difficulties recently released prisoners who lack identification face, especially as it relates to, for example, job applications.
Those attending the committee hearing included the Restorative Justice Ministry of the Diocese of Lansing [Link no longer available —Ed.], with the Kalamazoo Balanced and Restorative Justice Network, whose membership includes the Diocese of Kalamazoo, providing testimony.
Michigan Catholic Conference has officially endorsed the package of bills.
The House Appropriations Committee this week signed off on Governor Granholm’s second attempt at cutting and shifting funds from the current year’s budget. Executive Order 2007-3, which has already passed the Senate Appropriations Committee, trims some $344 million from a 2006–07 state budget that is currently running a deficit of approximately $940 million.
The executive order, which passed 24-6, was adopted after executive staff and members of the committee discussed the details of the proposal. The six members voting against the proposal included chairman George Cushingberry, Jr. (D-Detroit), Representative Doug Bennett (D-Muskegon), Representative Shannelle Jackson (D-Detroit), Representative Aldo Vagnozzi (D-Farmington Hills), Representative Michael Lahti (D-Hancock), and Representative Goeff Hansen (R-Hart).
Action on an additional $630 million in budget cuts for the current fiscal year, passed by the Republican-controlled Senate last week, remains to be seen as the Democratic-controlled House has shown no interest in passing such measures.