House Approves $61M In Cuts

December 17, 2003
| By Katy Rent |
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LANSING — By a 10-vote margin, state lawmakers last night approved $61 million in budget cuts, with an additional $16 million likely to come today.

State Rep. Bill Huizenga said he was pleased Republicans came forward with reasonable budget cuts to help balance the fiscal year 2004 budget, which was approved 56-46.

“It’s a good roadmap and a positive step as we attempt to drive efficiencies into state government,” said Huizenga. “With an additional $700 million deficit looming in fiscal year 2005, these are cuts we will need to make. While this is a painful process that we must go through, we are better off doing it now rather than delaying it.”

These actions will hold per-pupil school funding at the level Gov. Jennifer Granholm proposed while retaining the income tax reduction. Also, in a bipartisan 61-45 vote, the House rejected the governor’s plan to delay the income tax cut.

Huizenga noted that this action does not change the governor’s proposal to cut the foundation grant.

“We must attempt to protect the per-pupil foundation grant and cut the nonessential state government programs,” he said.

The Executive Order states:

“Gov. Granholm and the Senate Majority Leader have reached an agreement in principle that would minimize reductions in the School Aid Fund. The agreement would pause the 0.1 percent reduction in the state’s income tax, scheduled for January, for six months. As suggested by the governor, the bulk of the savings recognized through the six-month pause will be earmarked for K-12 education. The balance of the savings will be used to offset the reductions to higher education and revenue sharing. Under the terms of the agreement, of the estimated $77 million that the state will realize as a result of the six-month pause, $45.5 million will be dedicated to the School Aid Fund. It is estimated that this overall solution will drop the proration from $196 per pupil to approximately $90 to $100 per pupil.”

Other items contained in the reduction strategy include:

  • $82.5 million in general fund administrative savings for Executive Branch agencies, including $18.9 million from the Department of Corrections.

  • A 5 percent reduction in spending to universities ($73.1 million) and community colleges ($12.4 million) with a 3 percent restoration if they agree to hold any tuition increases to the rate of inflation.

  • A 5 percent reduction in state revenue sharing dollars, which totals $70.5 million.

  • A shift in the final fiscal year 2004 Merit Scholarship payment into the next fiscal year, which will save the state approximately $63 million while continuing scholarships to eligible students.

  • Administrative savings in both the Judiciary and the Legislative branches that equal $1.1 million and $1.2 million, respectively (a negative supplemental must be passed by the legislature for this to occur).     

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