State budget talks are ongoing

Michigan legislators are working to balance the next budget, and it’s still unclear how much funding public institutions will receive from the state.


As of Tuesday, Oct. 6, none of the budget bills have been signed into law by Gov. Jennifer Granholm.


Due to the economy, Michigan has to choose between cutting some funding, increasing revenue through taxes and/or dipping into more of the one-time stimulus package from the federal government to fund programs.


The state of Michigan Senate and House of Representatives had until midnight Wednesday, Sept. 30, to decide on a budget for the fiscal year. Since an agreement wasn’t reached in the House and the Senate, then signed by Granholm into law, the state government was to shut down, like it did for a few hours in 2007.


Last Thursday, the government was technically shut down for a few hours because the budget had not been approved by midnight Wednesday.


State congress passed and Granholm signed into law an interim budget, while the actual budget debate continues. However it is only valid for a month.


“The constitutional deadline has been met, but the work on this budget is far from over,” Granholm said in a press release. “This budget not only has the wrong priorities, it’s a fiscal house of cards that relies on one-time federal revenues from President Obama that can’t be sustained into the future.”


Granholm criticized the interim budget and said it doesn’t have enough funding for three priority matters: diversifying the economy to create jobs, funding police and firefighters, and helping students afford a college education.


She said she will veto any proposed budgets, either as a whole or as line-by-line items, passed by the state Congress if it doesn’t have those programs funded.


“The governor is prepared to use the veto pen,” said Liz Boyd, a spokesperson of the governor.


The budget as a whole consists of several separate bills, each giving a portion of the budget to different types of state institutions, including public universities. As of Tuesday, six of these bills were in the Senate, one was in the conference committee (made up of three House and three Senate members), and eight were on the governor’s desk.


The governor has not yet signed any of the bills. She is waiting until the budget as a whole is decided upon. If she signed any of the bills they would take immediate effect and then the budget discussions would be less flexible.


The House has a Democratic majority led by Andy Dillon, and the Senate’s Republican majority is led by Mike Bishop.


Generally, Michigan Republicans say the Democrats are unwilling to cut funding for unessential programs despite the tough economy and that increased taxes will not be welcomed. Democrats say the Republicans want to cut funding for some essential programs.


About half of the projected $2.8 billion deficit in Michigan is expected to be made up with funds from the federal stimulus package, the American Recovery Act of 2009, which is one-time only.


“Using all of the stimulus money is not the answer,” said Matt Marsden, Bishop’s spokesperson. “It leaves a bigger hole, it’s harder to manage and there’s nothing to bail us out.”


A long-term solution would need budget cuts and/or new sources of revenue through increased taxes.


The interim budget passed does not include any tax increases.


Most Michigan universities formed their budgets by August, and predicted that the state will give all higher education institutions a 3 percent decrease in funding from last year. In light of these expectations, they adjusted their budgets accordingly. According to Oakland University, this looks likely to happen. Officials also believe the 3 percent decrease can likely be made up by the stimulus funds.


The House’s approved bill for higher education indicated the stimulus funds will help make up the difference. The bill is now being debated in the Senate.


The Michigan Promise Scholarship is one thing that is potentially on the chopping block this year, along with other financial aid programs that come to a total of about $140 million, said Rochelle Black, OU’s vice president for government relations.


In a press release, Granholm promised to veto any budget that didn’t fund the Promise Scholarship.


Legislators are also considering cutting aid to local government, health care, libraries, and other public institutions. Granholm said that relative to some institutions, public universities have done pretty well.


“I don’t think there’s anyone who wants to cut these things,” Black said. “But typically, the public also doesn’t want a tax increase.”


The K-12 public schools’ budget hasn’t been agreed upon yet.


An 11 percent decrease in funding for cities, towns and counties was approved by both Senate and House, but is still awaiting approval from Granholm. The status is the same for a 8 percent decrease in Medicaid, the public health care system.


Visit to read details and status of the budget bills.


READ HOW THE STATE BUDGET AFFECTS OU: State budget changes likely will not stifle OU funding