Snyder cuts $103M to help close $325M shortfall

Chad Livengood and Gary Heinlein
Detroit News Lansing Bureau

Lansing — Gov. Rick Snyder issued an executive order Wednesday slashing spending by $102.9 million in 11 state departments to help close a $325 million mid-year revenue shortfall.

A roughly $250 million shift in money from the School Aid Fund will help Snyder balance the state's general fund, where a surprise deficit emerged last month because of a surge in profitable businesses cashing in tax credits.

To reduce overall general fund spending by $456 million, Snyder will propose lawmakers shift $167 million in general fund spending on community colleges to the School Aid Fund and stop an extra $80 million payment to the school employees' pension fund, budget director John Roberts said.

A supplemental budget bill headed to the Legislature will further reduce spending $93 million, including a $12 million cut in film production subsidies, Roberts said.

Rep. Sam Singh, D-East Lansing, said the governor's budget moves are designed to cover up for the revenue impact of the $1.8 billion tax cut he delivered to businesses in 2011.

"They're solving a lot of problems for the budget by using the School Aid Fund," said Rep. Sam Singh, D-East Lansing. "Why aren't we using that School Aid money to go back to those schools instead of solving budget problems that were created by a tax system created by this governor?"

Sen. Dave Hildenbrand, chairman of the Senate Appropriations Committee, defended moving the remaining community college funding to the School Aid Fund, which is allowed under the state Constitution.

"I think that's an appropriate source of funding for community colleges," said Hildenbrand, R-Grand Rapids.

The Republican governor's mid-year cuts include $23.3 million from the Michigan State Police's budget and $17.8 million from the Department of Corrections' $2 billion annual budget.

Snyder's plan, which needs legislative approval, included a $16.5 million reduction for the Department of Community Health and $15.5 million less for the Department of Human Services before those agencies are merged officially in April.

"This was not an across-the-board cut," Snyder told lawmakers at a Wednesday morning budget presentation. "I believe across-the-board cuts are bad management."

The governor is expected to submit a supplemental budget bill to the Legislature to help alleviate the rest of the deficit, which is blamed on a surge in corporations cashing in refundable tax credits mostly awarded under former Gov. Jennifer Granholm's administration.

Snyder also plans to withhold $12 million from a $50 million fund for incentives granted to movie and television production companies that film in Michigan, spokesman Dave Murray said.

But in his 2016 fiscal year budget, Snyder proposes restoring funding to $50 million, double the amount the governor has recommended in prior years.

Snyder's budget ax spared revenue-sharing for municipalities, K-12 schools, community colleges and universities. The state's School Aid Fund has a projected $41.1 million surplus.

"The way I view it is we were going to protect students ... and our local partners," Snyder said during his annual budget presentation to members of the House and Senate appropriations committees, which have to approve the cuts.

The majority of Snyder's $23.3 million in cuts to the state police budget came in a $16 million reduction in disaster assistance and a $2.8 million line-item cut to general law enforcement and traffic safety.

Col. Kriste Kibbey Etue, commander of the state police, said the disaster assistance was reduced because the state only needed to spend $14 million from $30 million appropriated for aiding recovery efforts from flash flooding in Metro Detroit last August.

"That is the actual number we're going to need to process all of the claims with FEMA," Etue said after the governor's budget presentation, referring to the Federal Emergency Management Agency.

Snyder also eliminated a training school for 31 new motor carrier enforcement state troopers who monitor truck weights for commercial trucks.

"We still have 58 (officers) out there, but they're going to work twice as hard," Etue said.

Snyder's executive order also cut $3.5 million in special purpose funds for a communications and technology program in the Department of Technology, Management and Budget.

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