Unfortunately, the Senate Republicans are insisting that we hurt low-income workers instead, and if not, too bad for the schools.
By a vote of 74-29, a majority of House members said Thursday the $184 million should be used to help schools avoid all but $10 of a $127 per student cut ordered by Gov. Jennifer Granholm. Schools still would see their funding drop by the equivalent of $165 per student.
The bill looks unlikely to pass the Senate. A Senate Republican spokesman says the House instead should use $100 million saved by freezing a tax credit for low-income workers.
Little problem with freezing the tax credit though. Not only is it a cruel and heartless thing to do, especially given that the Republicans refuse to look at trimming tax credits for business interests, it seems that it would also cost us millions in federal dollars by threatening our ability to receive the TANF block grant that is used in other places in the budget. Budget Director Bob Emerson sent a warning letter to the Legislature yesterday, and the information passed on goes something like the following - a bit hard to follow with all the legalese, but stick with it...
State Budget Director Robert Emerson has warned legislative leaders that Senate proposals to use savings derived from reducing the Michigan Earned Income Tax Credit (EITC) to fund K-12 education and business tax relief could cost the state millions of dollars.
Emerson issued the warning in a letter delivered late Tuesday to the chairs of the Senate and House appropriations committees.
The Michigan EITC is a refundable credit that began with the 2008 tax year. It provides additional money to low-income workers who qualify under federal EITC guidelines.
The EITC is used to meet the maintenance of effort (MOE) requirements for the federal Temporary Assistance for Needy Families (TANF) block grant and the 2010 budget as enacted. House Bill 4514 and Senate Bill 838, as passed by the Senate, reduce EITC spending by $169.5 million and redirect those savings toward business tax relief and a general fund transfer to the School Aid Fund.
TANF funds are used throughout the state budget to fund basic assistance for low-income families, employment and training opportunities, child welfare improvements and other important program initiatives. As a requirement for receiving a yearly TANF block grant of $775 million, Michigan must meet an MOE requirement of $500 million.
The current TANF MOE analysis assumes an EITC level of 20 percent. Proposals to reduce the EITC below 20 percent will jeopardize Michigan’s ability to meet TANF MOE.
Yes, I wish this stuff were in plain English myself. It's no wonder people can't understand what is going on when they throw out three thousand acronyms that are all tied in with each other in layer upon layer of the language of funding requirements. Basically, it says that if we don't meet our end of the bargain on the 2010 grant, we are penalized on the 2011 grant, and cutting the EITC jeopardizes the 2010 grant. A simpler example might be this:
As an example, if the state fails to meet its MOE requirement by $25 million in 2010, Michigan would lose $25 million in federal funds in 2011. The state also would have to spend $25 million in general fund monies, in addition to its regular MOE spending, as a penalty. The result would be a total of $50 million in TANF/general fund penalties.
To sum it up, not only are the Senate Republicans saying "No!" to K-12 unless we go after the poor, if we actually go after the poor we will be penalized millions of dollars as well.
Throw that in with the hundreds of millions that they have thrown away on federal funding for health care, and it becomes pretty obvious that the Republicans are hell-bent on hurting children, the elderly, the sick, and anyone else they possibly can in their quest to "drown government" here in Michigan.
Next, they will turn around and blame the Democrats for the damage from their obstruction. Wait and see.
UPDATE: Should have waited for the quote from Marsden. It's pretty typical - snotty, dismissive, and neglects to tell the public about the TANF issue.
"This is absolutely ridiculous," said Matt Marsden, spokesman for Senate Majority Leader Mike Bishop, R-Rochester. "The House has $100 million in revenue in the Earned Income Tax Credit freeze bill that Democrats refused to use.
"We're not taking up a bill that creates a bigger hole in the 2011 budget year by using up all the stimulus money."
No, they insist the House take up their bill that hurts poor people AND creates a bigger hole in the 2011 budget. "My way or the highway" is the rule when it comes to our Senate from here on out.
Care to comment on their behavior, Speaker Dillon? Or is Mike Bishop's career more important than our schools? 'Cause we really need to know the answer to that...