After Short Shutdown, Michigan Lawmakers OK 30-Day Interim Budget

CHICAGO — Michigan lawmakers will have another month to tackle a $2.8 billion deficit after they approved a 30-day interim budget following a brief government shutdown early Thursday morning amid disagreements over a permanent 2010 budget.

Legislators approved 14 of the 15 bills that make up the 2010 budget, but several key measures are expected to change over the next month. Among the issues that remain to be resolved — or are likely to undergo changes in a final budget — are a final K-12 budget, cuts in revenue aid to local governments, and the fate of a popular college scholarship program.

It’s the second time since 2007 that legislators have failed to craft a permanent budget by Oct. 1, the start of Michigan’s fiscal year. A group of freshmen representatives yesterday introduced a bill that would force lawmakers to finish the budget by July 1.

The Republican-controlled Senate passed a 2010 budget balanced by a mix of $1.3 billion in cuts and U.S. stimulus dollars. The Democratic-controlled House approved a series of bills that reduced many of the Senate’s cuts but lacked the necessary revenue, or approved bills based on Republican cuts late Wednesday night but vowed to find ways to replace the revenue later this month.

Democratic House Leader Andy Dillion said the House would begin considering a number of tax increase proposals as early as today.

As lawmakers battled over the spending plans, Gov. Jennifer Granholm, a Democrat, indicated she would likely veto many of the cuts on the table, including an 11% reduction in local government revenue aid that goes to pay for police, fire, and other municipal services.

Granholm has already proposed a number of tax and fee increases to raise additional revenue, including a bottled water tax and a 6% tax on live entertainment. 

“I will use my veto pen to shape this budget to protect the things that are most important to Michigan families,” Granholm said Thursday afternoon at a press conference. “With Michigan’s future on the line, we can’t afford a budget that does less.”

She did not specify which measures she would veto.

The Legislature passed a health budget that cuts Medicaid reimbursements by 8%, a cut that House Democrats said they would scale back over the next month. The House and Granholm also said they would try to restore a $120 million college scholarship program that is eliminated in the current higher-education budget.

Both chambers passed a transportation bill that cut about $10 million from public transportation. The budget also reduced initial funding to $2.5 million from $8 million for a controversial plan to build a second bridge across the Detroit River to Windsor, Ontario.

But neither chamber mustered enough votes to pass a K-12 school budget that would cut aid to school districts by $218 per student, or $348 million in total.

Business and labor groups criticized lawmakers for again missing a deadline to craft a final budget.

“Michigan is suffering from the negative national media attention focused on our state’s dire and prolonged economic condition, and seeming inability to chart a reasonable course for recovery,” Business Leaders for Michigan, a high-profile group consisting of 75 chief executive officers of the state’s top companies, said in a statement issued early Thursday morning.

The House and Senate were set to reconvene yesterday to continue to hammer out compromise bills. The temporary budget gives lawmakers until Oct. 31 to craft a final budget.

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