In Michigan
6:55 am
Wed September 30, 2009

Stimulus argument delays budget deal

LANSING, MI – At the state Capitol, work on the budget is progressing slowly with a midnight deadline for getting the job done.

AUDIO:

Lawmakers labored into the night, but there is still not a single budget bill ready to be signed by Governor Granholm. The latest holdup is an argument over how much federal stimulus funds the state will tap to help pay for K-12 schools.

"The magnitude of the cut to the K-12 budget is pretty significant and there has been some talk of, do you use what's left of stimulus to get it done," says Democratic House Speaker Andy Dillon. Dillon says that could reduce by half proposed cuts to schools that add up to about 410 (m) million dollars, or 218 dollars per student. "It's this value thing that we're chasing every day. Education is the future for this state. We need to fund it and we need to send a message that we want to fund it."

"You use all your federal stimulus dollars now, you just make your hole that much bigger in the future, and it just doesn't make any sense," says Republican Senate Majority Leader Mike Bishop. Bishop says it would be smarter to sit on some of the stimulus money. That way, he says, the state will have it in the bank in case the deficit grows worse, or to avoid a big drop-off in funding after Washington is no longer sending emergency funding to help states balance their budgets.

"Our state budget has seen its revenues dramatically decrease," Bishop says. "We'll be doing this this year with the cut and we'll be doing the same thing next year. It is a structural deficit that's going to be part of our job long into the future."

The two legislative leaders - Bishop and Dillon - remain in agreement that tax increases and other new sources of revenue will not be part of this first round of budget votes. Dillon has earned the ire of some of his fellow Democrats by agreeing to strive to hit Republican spending rollback targets adding up to $1.2 billion with no additional revenue - except for the short-term infusion of federal stimulus money.

But Democrats will propose new sources of money in coming days and weeks to try and renegotiate the budget and reverse cuts to schools, college scholarships, Medicaid, and local governments. The prospect of that has drawn armies of lobbyists and activists to the state Capitol.

Alex McCollough is taking a break from his job at a Lansing lobbying firm to hand out pamphlets to legislators outside the Capitol. It asks lawmakers to oppose expanding the 6% sales tax to sporting events, concerts and other types of live entertainment.

"Trying to put the word out there that there's other places to get funding from than the ticket tax," McCollough says. When asked where, he says, "Cut spending. That's pretty much my view on things."

But it's been hard to get votes for some of the cuts that are already proposed. For example, many Democrats say they won't vote for Medicaid cuts that could force more than 60 nursing homes out of business, or revenue sharing cuts that could push 20 cities into bankruptcy. That is, unless there is the promise of more revenue later.

With just hours now until the budget deadline, the Legislature may have no
choice but to send Governor Granholm a temporary continuation budget later to avoid a state government shutdown at midnight.