Wednesday, April 01, 2009

Grim Budget Numbers. Clearly, It's Time For Vacation.

The plan was that the Michigan Senate was going to kick out the budgets for 2010 this week. Come to find out that, after the Senate Republicans ran around to the press earlier this year with their hair on fire yelling about the need for "more cuts!", after slashing another $2 billion or so in revenue and then turning around and proclaiming the state had a "spending problem", and after wagging their sanctimonious finger in our faces and telling us they need to be in charge of the stimulus oversight because we might "grow government", the Senate wasn't really serious about making cuts at all. Unless, of course, you count the personal, petty, and vindictive cuts they wanted to make on the governor's programs.

In the early stages of budget negotiations, Republicans have found money to pay for items the governor put on the chopping block, including horse racing subsidies, arts funding, after-school programs and the entire Department of History, Arts and Libraries.

Republicans also have made noise about maintaining other spending Granholm has proposed scaling back, including financial aid for private college students and the cooperative extension service. It's uncertain what will happen to her plans to close more prisons and a mental health facility because the Senate hasn't taken up those budgets yet.

Actually, they haven't found a way to pay for those things; they are just being petulant and childish. Need proof? They added all that spending back in, and then take these little shots for good measure.

Their targets, not surprisingly, are programs near to Granholm's heart, including $8.4 million from job training for laid-off workers, $5 million from her 21st Century Jobs Fund and $700,000 from an office of workplace development.

Even the Detroit News can see right through the game being played here. Since we were looking at $1.6 billion in the hole for FY '09-'10 combined, and the Senate added another $2-$2.5 billion in tax cuts on top of that... well, kind of hard to see how the paltry $14 million of cuts to economic development (mind you) are going to get us over the finish line. They just want to look good to the people who have complained so far.

More than half the budgets actually were higher than the Governor's, but Jelinek said that more cuts would be on the way in the future. The plan at that time was to pass budgets from the Senate this week.

Today, Jelinek said that perhaps the History, Arts and Libraries (HAL) and one other budget would go this week. MIRS asked him what had changed since last week.

"The fiscal economy of the state," he said. "Things are seeming to go downhill, so we need to take a second look at cutting budgets even more."

Um, you haven't cut anything yet. You have increased spending. So, when you say you need a "second look", it really has no bearing on the reality of what is happening, right Senator Jelinek?

Doesn't matter, for the numbers are going to force us to places that even the Republicans (obviously) don't want to go. We are in a revenue free-fall, according to the Senate Fiscal Agency via MIRS.

Of course, it's no secret that the state's economy is deteriorating and will get worse with continued contraction in the auto industry. The news that state revenues were down $200 million this year came weeks ago. Even still, sources tell MIRS that the Senate GOP caucus meeting on Thursday was a difficult one, with many members reluctant to cut certain budgets even more.

But it seems that an economic and revenue update by Senate Fiscal Agency Director Gary OLSON to the GOP caucus this morning made an impression. According to the Olson report obtained by MIRS, revenues for Fiscal Year (FY) 2009 are down 11.3 percent or 1 percent from FY 2008 (see related story). In FY 2010, revenues are expected to sink another 4.5 percent or $371.6 million for about $7.9 billion.

Clearly, it's time for vacation. Since they don't have "solid numbers", might as well just take a couple of weeks off. Let's kick the can down the road, and party like it's 2007 all over again.

But Sen. Deb CHERRY (D-Burton) called the budget delay "ridiculous." Cherry said she'd heard about the delay, but said she wasn't aware if there was a final decision.

"We certainly shouldn't be leaving on break if we're not doing budgets," she said.

She said there are variables in the budget and it's not clear how much money the state has, but the Legislature has an obligation to move the budget process along. Cherry said she wasn't sure why there was the rush to do everything last week, noting that these were "Republican budget bills."

Republicans need to get their cuts on the table. They are the ones insisting on "living within our means" (while they continue to cut those means), so, let's see it. Start with $2 billion if you need a solid figure to work with. Time to show the public exactly what that entails, and see if you have the stomach to get around to adding more later.

Chances are the public will be screaming for a graduated tax reform by then. Oh, wait... you are dead set against that too. Well, then it's understandable why you would be delaying this now. We wouldn't want any actual solutions to present themselves, right?