Budget On Track To Be Completed By Next Week

With both chambers publicly calling for the budget to be completed by June 1, this week had a hard focus on budgets. Although the goal was not met all but one budget is on the way to the Governor well ahead of the traditional July 3^rd budget debate conclusion.

The last unresolved budget, Higher Education, appears to be resolved clearing the way for legislators to complete the work on the budget by next Tuesday. Late yesterday afternoon legislative leaders and the Governor were able to announce an agreement on how to award a $36 million increase to the 15 public universities.

The proposal calls for four pots of money to be distributed to Michigan’s Public Universities. Universities awarding more degrees in science, technology, math, engineering and health fields would receive a greater share of a $6 million pot. Those universities that restrain tuition will receive money from a $9 million pool of funds. There will be a pool of $18 million available to those universities performing well compared to their national peers in the Carnegie classification system. The final pool of $3 million would be available to those institutions that have an emphasis on research and development.

The conference committee met this morning and to complete the agreement. Rep. Bob Genetski (R-Saugatuck) was removed from the conference committee and replaced with Appropriations Chair, Chuck Moss (R-Birmingham). Rep. Genetski said he was not comfortable signing the agreement.

The House is meeting today for a rare Friday session to adopt the overall education budget (higher education, k-12 and community college budget). The Senate will pass the bill on Tuesday which will complete the 2012-2013 fiscal year budget.

Highlights of other budgets include:

The Department of Natural Resources budget includes $3 million that will go toward funding a summer program for youth in Detroit, Flint, Pontiac, and Saginaw to work in DNR facilities.

The General Government Budget took two votes to achieve passage as the first ended in an 18-18 tie. Some members had concerns over the doubling of the Film Incentive Program from $25 to $50 million. Three Senators changed their votes in favor of the bill on the second try (Senator Rick Jones, R-Grand Ledge), Senator Bert Johnson (D-Detroit) and Senator Vincent Gregory (D-Southfield) giving the bill a 21-15 tally to adopt the conference report.

The largest share of the budget is $1.096 billion for revenue sharing. It will also increase the Economic Vitality Economic Program by $15 million to a total of $225 million.

The Department of Education conference report was rejected on its first try at the urging of the Chair, Senator Howard Walker (R-Traverse City). The first report had unrolled the salaries of non-classified employees, which would have set those salaries in statute. The second conference report rolled up those salaries.

The budget also includes $800,000 for the Michigan eLibrary Database, also known as MeL, for the purchase of business research database for small businesses and entrepreneurs as part of the 84 percent increase to MeL funding.

The Michigan College Access Network will also receive $2 million in the upcoming year, which will add another $4.3 million from federal funds.

The K-12 Budget increases the minimum foundation allowance to $6,966 and provides $80 million to bring all districts to at least that level with a $120 per pupil increase to lower-funded districts. The proposal also includes $130 million to MPSERS prefunding in anticipation of legislation that would cap employer contributions to that fund. Finally the bill would provide for districts that receive a full foundation allowance for a kindergartener would require having that student in class all day. For those districts that had been using federal funds to cover part of the cost of full-day kindergarten, the formula would be adjusted in an attempt to allow continued use of federal funds. (The bill makes it clear that a full-day kindergarten is not a state mandate.)

The Department of Community Health conference report included an increase of $8.6 million to the Graduate Medical Education program; Medicaid will now cover treatment for autism for children through age 18; the Healthy Kids Dental Program will be expanded by $18.7 million.

In addition, Medicaid providers for OB/GYN services will see a 20 percent increase in payment rates. Chiropractic services under Medicaid were restored as well as full restoration for the adult vision program.

The report also includes a $5.95 million increase for rural and “sole community” hospitals.

It also includes an $11 million increase for the Medicaid Home and Community Based Waiver program to reduce that program’s waiting list.

The Department of Corrections budget includes a plan to convert the Ryan Correctional Facility to a parole violator center, closes the Tuscola Re-entry Facility, and reopens the Muskegon Correctional Facility.

The Transportation budget includes the diversion of $100 million in sales tax assessed on gasoline sales to the state transportation fund as a way to meet the federal match on highway funds. However, to meet the total federal fund match requirement, the state will also have to move $23 million from the general fund to the transportation fund.

The Community College budget continued to use the traditional formula for increases. The performance funding increases totaling 3 percent overall will be dispensed based on the following formula: 50 percent across-the-board, 10 percent based on student population; 7.5 percent based administration costs; 17.5 percent based on a system that gives more importance to certain degrees; and 15 percent based on colleges meeting best practices.

The State Police budget received an extra $15 million that Governor Snyder had requested to boost enforcement efforts as part of his public safety plan. The extra money will go toward funding two trooper recruit schools.

The budget also includes $2.8 million to boost investigations and parole assistance in Detroit, Flint, Pontiac, and Saginaw, specifically to help those communities with the cost of overtime, training, aviation and fleet costs.

The Agriculture budget includes the Senate’s call for an additional $300,000 general fund to pay for three positions in the Milk Safety and Quality Assurance section. It also provides an additional $70,000 general fund to pay for nursery stock inspections.

posted by PAA Online , Friday, June 1, 2012 1:27 PM
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House Approves Income Tax Reduction

The House of Representatives overwhelmingly approved House Bill 5699 giving a 0.1 percent income tax cut to take effect October 1, instead of the current slated date of January 1. The House also approved House Bill 5700 which gives a boost in the personal exemption from $3,700 per person to $3,950 per person on October 1. It would increase by $50 effective January 1, 2014 and a $100 increase effective January 1, 2017.

The tax reduction legislation is part of the budget agreement and was a major priority of Speaker Bolger throughout the budget negotiations.

posted by PAA Online , 1:20 PM
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Attorney General Rules State Cannot Collect Dues From Home Health Workers

In an opinion letter to Rep. Paul Opsommer (R-DeWitt) Attorney General Bill Schuette determined the state has no authority to collect dues from home health workers, and the practice must stop. Public Act 76 (SB 1018) signed earlier this year by Governor Snyder removes any authority for the state to collect the dues. (The state had been collecting union dues from Medicaid fees paid to home health workers.)

In 2005, an election was held under the provisions of the state’s Public Employees Relations Act and the SEIU was chosen to represent the workers. Mr. Schuette’s Chief Legal Counsel, Richard Bandstra believes this election was “unlawful” because the workers were selected by the people they assist, not a governmental agency.

According to Mr. Bandstra, PA 76 makes it very clear the 2005 election was invalid and void because the workers are not public workers, regardless for the terms of any other agreements that allowed for that election.

Rep. Opsommer said he requested the AG Opinion because there has been so much confusion since PA 76 took effect and the state has actually diverted some $30 million from the people it was suppose to be helping.

It is likely the SEIU will be pursuing a lawsuit to challenge the law.

posted by PAA Online , 1:18 PM
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PAAdvisory Briefs

PAAdvisory Briefs

Chamber Conference Schedule Released. Sandy Baruah, president and CEO of the Detroit Regional Chamber announced the Mackinac Policy Conference will return to its traditional Wednesday through Friday schedule next year. The 2013 conference will take place Wednesday, May 29 to Friday, May 31.

John Sellek to Head Romney Michigan Campaign. John Sellek, press secretary to Attorney General Bill Schuette is taking an unpaid leave of absence to head up Mitt Romney’s presidential campaign in Michigan. Mr. Schuette is a top Romney surrogate in Michigan, serving as one of his campaign co-chairs.

House Committee hears testimony on social networking bill. The House Technology and Energy Committee began hearings on legislation that would prevent employers and educational institutions from requesting passwords to personal social media accounts. The National Federation for Independent Business Michigan chapter spoke in support of the legislation, along with the ACLU. Michigan State University is neutral on the bill. The Michigan Chamber of Commerce opposed the legislation but did not testify. Rep Ken Horn (R-Frankenmuth) who is supporting the bill said the committee would meet for more testimony and HB 5523 and possibly vote next week.

posted by PAA Online , 1:17 PM
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