Americans for Prosperity-Michigan

No budget agreement yet

Granholm, Bishop report no agreements on Michigan budget
Mark Hornbeck, Detroit News Lansing Bureau     –     Oct. 15, 2009

Lansing — Republicans and Democrats remain miles apart on filling holes in the state budget two weeks into the fiscal year. Gov. Jennifer Granholm and Senate Republican Leader Mike Bishop, R-Rochester, met for 70 minutes Wednesday and came out of the closed-door meeting saying it was “constructive” and “cordial” but reported little progress.

The governor said Bishop gave no assurances the Senate would send to her the six remaining budgets it is holding or that the chamber will approve revenue increases to fully fund school aid or soften cuts in college scholarships, local police and fire protection and Medicaid.

“I have these priorities and he doesn’t want to find a way to fund them,” Granholm said during a news conference following the meeting. “We clearly have a difference of opinion about priorities for Michigan.”

Bishop said he will send the six budget bills to Granholm’s desk, possibly today or Tuesday, but reiterated Senate Republicans have no intention of voting for tax increases.

“I told her she would get the six remaining budget bills in plenty of time to make her decisions,” Bishop said. He added: “The Democrats are still pursuing tax increases that are unnecessary at this time; they’re bad for Michigan. We’re going to stand strong.”

Both leaders said there will be no government shutdown at midnight on Halloween, when a temporary continuation budget expires. Granholm said the K-12 budget on her desk “was not funded… it was supposed to be funded with an additional $100 million but there is no revenue attached.”

She said if no more revenue is forthcoming, she’ll be forced to make pro-rata cuts in school aid at some point, meaning local districts would be hit harder than the $165 per student reduction advertised last week after the Legislature passed the bill. The governor said she would not veto the school aid bill because “it would stop funding for schools.”

Compounding the problem, Treasury reported the school aid fund is coming in $129 million under projections. If the school aid bill is enacted without extra revenue, there will be a $264 million shortfall in 2010, Treasurer Bob Kleine said.

The governor said she indicated to Bishop which budget items she will veto, but would not elaborate at the news conference. Earlier in the week, Granholm suggested she might restore funding for priorities by using the State Administrative Board to transfer money, but Wednesday called that “a very limited strategy.”

The Legislature has passed all 15 department budget bills, but in a procedural move, the Senate is holding back six key bills. Bishop has said he’s concerned the governor will veto major portions of the budget, setting back a deal he struck with House Speaker Andy Dillon, D-Redford Township. Granholm has promised vetoes, saying she was never a party to that agreement and it’s her turn to have a crack at the budget.

The budget bills passed by lawmakers wipe out a $2.8 billion shortfall with budget cuts and federal stimulus money. Granholm has signed nine of the measures, some with line-item vetoes, including three more budgets Wednesday — agriculture, natural resources and environmental quality. She vetoed spending for horse racing, because it came from casino revenue. Granholm said horse racing should be self-sustaining.