Last Updated: October 30. 2009 7:02PM

Granholm signs final 6 budget bills, vetoes State Fair funding

Mark Hornbeck / Detroit News Lansing Bureau

Lansing -- Gov. Jennifer Granholm signed the final six budget bills today to finally wrap up the fiscal year's spending plan a month late.

The 15 bills contain 75 line-item vetoes totaling $127 million, including school aid money axed last week. Another high-profile veto was money that was added to keep the Michigan State Fair running for one more year.

The roughly $40 billion budget for fiscal year 2010 includes no tax increases.

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Granholm ordered the State Police to transfer money from other programs to pay for school bus inspections, which was cut by legislators. She asked lawmakers to find a permanent source of funding.

"This is the state budget we have, but it is not the budget we need," Granholm said, adding the budget "cuts too deep" in areas such as financial aid for college students, local public safety, public school aid and health care for the needy.

"The budget is signed, state government will not shut down," she said. "But the fight is not over. This budget is not who we are, not where we should be. I'm asking the Legislature to come back and make this a budget we can be proud of."

Granholm said the budget cuts passed by lawmakers are "extreme," adding she believes most residents will take exception to them. She called for citizens to rally behind some of the excised programs and services and let their legislators know they want them restored.

Today's vetoes follow Granholm's action last week to scratch $52 million out of the school aid budget for high-spending school districts. Most of the vetoes are earmarks and pilot projects put in by appropriations committee chairs scattered throughout the budget.

Granholm signed spending bills for State Police, community health, human services, general government, higher education and energy, labor and economic growth. She inked the budget bills the day before a temporary continuation budget expired.

The governor's signing of the final six of 15 budget bills means the state averts a second government shutdown in a month and puts the finishing touches on a budget that wipes out a $2.8 billion shortfall with cuts and federal stimulus money.

But it doesn't mean the haggling over this year's spending is over. Granholm vowed to continue her push for revenue increases to revive Promise scholarships for college students, and soften the cuts to school aid, Medicaid programs and revenue sharing that is used by municipalities to pay for police and fire protection, road repair, garbage pickup and other services.

Senate Republicans have said they don't have the votes to pass tax increases to shore up those programs. The GOP-controlled Senate has passed a freeze in a tax credit for low wage-earners, a reduction in the film tax credit and a tax amnesty program and leaders say they don't intend to take up anymore revenue bills. The Senate rejected a tax on physicians that the House passed in an effort to bolster Medicaid.

Senate Republicans met behind closed doors Thursday to discuss long-term structural reforms that could save money. Senate Majority Leader Mike Bishop, R-Rochester, said they'll probably make their list of reforms public next week.

The spending measures Granholm signed today will:

• Cut revenue sharing to local governments by $101 million.

• Eliminate Promise grants of up to $4,000 for college students and reduce need-based financial aid by $55 million.

• Trim reimbursement rates to health care providers for treatment of Medicaid patients by 8 percent.

• Slash $62 million from community mental health programs.

• Reinstate 55 of 100 state police troopers laid off this summer.

• Cut aid to the 15 state universities by 0.4 percent.

House Speaker Andy Dillon, D-Redford Township, said the budget Granholm signed takes Michigan in the wrong direction and blamed the Senate for not funding priorities such as education.

"This Senate-led 'all-cuts' budget will result in bankrupt communities, schools in receivership and broken promises for students seeking to go to college so they can join the middle class," Dillon said. "The fight is far from over."

mhornbeck@detnews.com (313) 222-2470

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More information

    Budget aftermath

    Winners

  • Community colleges. They suffered no cuts because the governor and lawmakers see them as the training ground for workers in the new economy.
  • Senate Republicans and Majority Leader Mike Bishop. They wanted to balance the budget without tax increases and got their wish. Bishop, who wants to be nominated by party regulars for attorney general, endeared himself to conservatives.
  • Taxpayers. Lawmakers papered over a $2.7 billion shortfall without raising taxes -- yet.
  • 55 State Police troopers. Budget agreement called them back to work after summer layoffs.
  • Welfare recipients. Although some programs are cuts, infusion of federal cash restored planned reductions in cash assistance, clothing allowance and other programs.
    Losers
  • College students. They lost their $4,000 Promise grants and other financial aid also was reduced.
  • Health care providers who have Medicaid patients. Their reimbursement rates, already low, were cut by 8 percent.
  • Medicaid recipients. Because of the reduction in reimbursement rates to doctors, their access to health care will be curtailed. They also lost dental and other coverage. Some nursing homes with a heavy Medicaid caseload may close.
  • Local governments. Revenue sharing used for local police and fire and other programs took a $100 million hit.
  • 45 State Police troopers. They were among 100 laid off in July and funding is not there to put them back on the road.
  • The mentally ill. Non-Medicaid community health programs were slashed by $62 million.
  • Public schools. First they took a $165-per-student hit in the school aid bill, then they lost another $127 per pupil in cuts ordered by the governor.
  • High-spending schools. They lost not only the $292 per student taken from all districts across the state, the governor vetoed $52 million these districts have been getting to stay even after voters passed school finance reform in 1994.
  • Intermediate school districts. The school aid bill slashed 40 percent of operational spending for these countywide districts that provide vocational, special education programs.
  • Michigan State Fair. The Legislature gave the nation's oldest fair a year reprieve, but Granholm vetoed the $7 million to operate the fair one more year.
  • Gov. Jennifer Granholm. She was excluded from the budget agreement, then failed to get the revenue increases she wanted -- so far.
    Toss-up
  • House Speaker Andy Dillon. His plan for retooling public employee health care isn't part of the budget but launched wide-ranging discussion about long-term policy reforms and cast him in the public spotlight -- a good thing for a potential gubernatorial candidate. However, his strategy to adopt the Senate's cuts-only approach and hope for revenue increases later backfired. It's difficult to ascertain whether he's a winner or loser because it's not clear what his goals were.
    -- Detroit News Lansing Bureau

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