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Legislature puts into effect $106M in budget cuts

Gary Heinlein
Detroit News Lansing Bureau

Lansing — Michigan House and Senate appropriations committees approved Thursday Gov. Rick Snyder’s executive order, immediately putting into effect a cut of $106 million from the current state budget to help address a projected $325 million shortfall.

Appropriations committee approval is all that’s required to activate the budget reductions, which are to be absorbed by 12 departments of state government as part of the budget plan Snyder unveiled Wednesday.

Snyder also wants lawmakers to approve two budget bills calling for $101 million in additional cuts, including a $12 million reduction from the $50 million in incentives budgeted for TV and movie filming in Michigan.

That program’s budget would decline to $38 million this year and go back up to $50 million for the 2016 budget year starting Oct. 1, under Snyder’s proposal.

The Republican governor also proposes a $5 million cut to the $51.1 million appropriation for the graduate medical education program, a state subsidy to hospitals for training medical professionals.

The full House and Senate have to approve the supplemental bills for the additional $101 million in cuts to take effect.

In all, the governor wants to trim the $52 billion current budget by $446 million. Proposed spending for the 2016 budget year is $54 billion.

Fund shifts constitute the rest of Snyder’s strategy for dealing with revenue problems in the current-year budget, mostly caused by an unexpected surge in the cashing in of tax credits granted to Michigan businesses.

Snyder wants to freeze an $80 million payment to reduce the state’s liability in its public pension system and move $160 million from the General Fund to the School Aid Fund supporting public education.

The tax credits are being used at an accelerating rate as companies add to their workforces in an improving state economy.

gheinlein@detroitnews.com