Michigan state budget (2010-2011)
- 1 FY2011 State Budget
- 2 Budget background
- 3 Accounting principles
- 4 Budget transparency
- 5 See also
- 6 External links
- 7 Additional reading
- 8 References
The state's fiscal year begins on October 1st and ends on September 30th of the following calendar year.
Going into the fiscal year Michigan had a total state debt of $69,418,882,370 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.
|Total spending||Energy||Healthcare||Education||Tech||Protection||Transport||Treasury||Human Services|
FY2011 State Budget
The state brought in more revenue than previously expected for the fiscal year that ended Sept. 30, 2011. State budget officials said in Jan. 2012 that there was an unanticipated surplus of $457 million. The Attorney General wanted to use that money to hire more police officers, but lawmakers said they did not want to spend one-time revenue on long-term spending.
The state legislature passed the FY2011 state budget on September 29, 2010. The budget totaled $8.3 billion, up about $500 million from the prior year's budget. The state eliminated a $484 million deficit in the 2011 fiscal year, which began Oct. 1, 2010. The state did so in part by relying on more than $1 billion in one-time, extra federal assistance.
The budget did not raise taxes. The budget did, however, make cuts in many other areas. Cuts to the budget included lessening state aid to 15 universities for operation by 2.8% and cutting $42 million from prisons. The state police funding was reduced by $8.8 million, down to $529 million.
One of the key aspects of the budget was a state employee retirement incentive program. The plan was estimated to save the state $80 million in its first year. Civil service employees got a 3% raise Friday that was estimated to cost the state about $45 million. Employees were required to begin paying 3% of their pay into health care benefits.
K-12 education funding rose slightly to $13.2-billion due to the receipt of federal stimulus and onetime federal money of $316 million. Lawmakers reinstated $84 million to the transportation budget so that the state could qualify for $470 million in federal funds for highways.
To generate revenue, the budget included a measure to change and accelerate how the state accounted for unclaimed property. The move was estimated to generate $208 million from forgotten and/or misplaced bank accounts, payroll checks and safety deposit boxes. It also permitted the sale of liquor on Sunday mornings for establishments that purchase a $160 license to did so. Another revenue generator in the budget was the tax amnesty program, which lifted penalties for nonpayment of taxes and was estimated generate $60 million in back tax and interest collections.
The budget took into account paying out movie tax credits of $119 million, up approximately 20% from the prior year.
Michigan received approximately $700 million from the federal government under HR1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.
In Oct. 2010, Gov. Jennifer Granholm vetoed some elements of the state budget. She vetoed the formula the Legislature approved in Sept. 2010 to distribute the $316 million the state received from the federal government for education. The governor said that the plan, which would give districts $154 per pupil, plus another $23 per pupil to $46 per pupil, violated guidelines provided by the U.S. Education Department.
Gov. Granholm also vetoed a bill permitting liquor sales on Sunday mornings and Christmas Day because she objected to provisions that allow restaurants to supply their own alcohol at events they cater, allowing stores that sell alcohol to permit wine and beer tasting, and allowing community colleges to provide alcoholic drinks for culinary arts programs.
Governor and Legislative Leaders Proposals
The governor and legislative leaders Republican Senate Majority Leader Mike Bishop and Democratic House Speaker Andy Dillon reached an agreement on a state spending plan for FY2012 that included an early retirement plan for state employees and did not raise general taxes. The deal closed a projected $484-million deficit for the spending year that started Oct. 1 2010. It calls for 3% cuts to state departments, debt refinancing and other bookkeeping measures, along with a reported early retirement plan. The early retirement plan was a sticking point for Democrats in the Legislature, many of whom described earlier versions of the proposal as inadequate. In addition, the deal proposed a tax amnesty program, an expansion of liquor sales and altering state rules on unclaimed property to boost the state's coffers.
The tentative agreement also called for state workers to contribute 3% of their salary toward retiree health care costs, which would be phased in over five years and amount to a $1,620 pay cut for the average state worker, who made about $54,000 a year at the time.
The Michigan Constitution requires the Governor to propose an Executive Budget for state activities on an annual basis. By law the Executive Budget must be submitted to the Legislature within thirty days after the Legislature convenes in regular session on the second Wednesday in January. However, when a newly elected Governor was inaugurated into office, sixty days were allowed to prepare the proposal. The Executive Budget was more than a statutory requirement. It represents a statement of priorities for the policy activities of state government. Therefore, a detailed budget preparation process was necessary to provide information that would help the Governor and the Legislature allocate state resources most effectively. The budget process can be broken down into four stages:
According to the Michigan Constitution, no appropriation was a mandate to spend. The Governor, by Executive Order and with the approval of the appropriations committees, can reduce expenditures whenever it appears that actual revenues for a fiscal period would fall below the revenue estimates on which the appropriations for that period were based. By statute, any recommendation for the reduction of expenditures must be approved or disapproved by both of the Appropriations Committees within ten days after the recommendation was made. A reduction cannot be made without approval from both committees; not later than thirty days after a proposed order was disapproved, the Governor may submit alternative recommendations for expenditure reductions to the committees for their approval or disapproval.
The following table shows total state spending in recent years.
|Year||Gross Appropriations||Federal Revenue||Difference – State Spending from State Sources|
|FY 2008-2009||$44,633,407,900||$14,917,594,200||$29,715,813,700 (Increased $108 million)|
|FY 2007-2008||$43,578,704,400||$13,970,996,300||$29,607,708,100 (Increased $402 million)|
|FY 2006-2007||$42,385,938,000||$13,180,056,000||$29,205,882,000 (Increased $1.079 billion)|
|FY 2005-2006||$40,904,128,000||$12,778,003,500||$28,126,124,500 (Increased $677 million)|
|FY 2004-2005||$39,923,663,500||$12,351,486,100||$27,448,662,539 (Decreased $247 million)|
|Category||FY2009 Amount in millions Actual||FY 2010 Amount in millions Estimated|
|Budget Stabilization Fund||2||2|
The Michigan Office of the Auditor General had the responsibility, as stated in Article 4, Section 53 of the State Constitution, to conduct post financial and performance audits of State government operations. In addition, certain sections of the Michigan Compiled Laws contain specific audit requirements in conformance with the constitutional mandate. Thomas H. McTavish had served as Michigan Auditor General since 1989. Michigan's audit reports were published online.
The Institute for Truth in Accounting (IFTA) rates Michigan “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider Michigan's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care. Michigan's CAFRs were published online by the Michigan Office of State Budget, Office of Financial Management. Michael J. Moody was the Director of the Office of Financial Management. l Bob Emerson was the Director of the Office of State Budget.
No department of Michigan state government provides a comprehensive and searchable online checkbook register that gives a full and timely accounting for all expenditures. Spokespersons for the office of Michigan governor Jennifer Granholm had asserted that providing such a service for all of Michigan state government would cost in excess of $100 million, and was thus cost-prohibitive given the state's recurring inability to align desired spending with available revenue.
- State Rep. Tom McMillin, R-Rochester Hills, said he had pushed for Michigan to follow Missouri's lead and post more information online but was told that it would cost $100-150 million to put data on the Internet the way Missouri had done. Gov. Snyder's spokeswoman said those estimates "seem to be somewhat off base."
- Proposal to open budget meetings: In January of 2010 State House and Senate members considered a proposal, which would open traditionally closed state budget meeting to the public. The reform was building off other proposals such as earlier deadlines for adopting a budget and docking lawmakers' pay for not adopting a budget in time.
- Michigan Department of State provided first online expenditure report:On April 23, 2008, Michigan Secretary of State Terri Lynn Land announced that the Michigan Department of State would begin posting quarterly expenditure reports. These reports provide the names for most of the recipients of departmental funds, the general category for the expenditures and the total amount paid during the preceding quarter. The MDOS made the decision to post this expenditure report after a request from the Mackinac Center for Public Policy's "Show Michigan the Money" transparency project. The MDOS report was presently the only regular accounting of expenditures provided by any department of state government. The MDOS report did had limitations. It was provided as a searchable PDF document, but did not provide check numbers nor was it subdivided by date for individual transactions. The reports also did not provide the names, titles and salaries paid to departmental employees. (However, the names of employees and amounts paid to them for travel and other work-related reimbursements were included in the reports.)
- Governor's response to lack of online "check register":Democratic Governor Jennifer Granholm had responded to calls to put the state "check register" online by asserting that current information systems could not provide this information, and making the capable of doing so would be too costly. An April 9, 2008 report by the Michigan Information News Service (MIRS, subscription required) reported that a letter to House leaders from state Department of Information Technology (DIT) director Ken Theis said that the state's financial accounting mainframe computer system acquired in the in 1980s would require "extensive" upgrades costing between $100 million and $150 million to produce the kind of searchable spending database that Missouri had created. The point of the Mackinac Center request referred to above was merely to ask state departments to replicate the Secretary of State standard, leaving them to decide whether or not they wished to exceed it. As reported on the Mackinac Center's "Show me the money" website, using the same mainframe computer system the Michigan Secretary of State department posts quarterly spending reports at an initial cost of $2,400, and $700 for each new quarterly report. If those figures were extended to the entire state government the initial cost to produce similar quarterly reports would be $516,000, and $129,000 per quarterly report, or 0.0012 percent and 0.00035 percent of the annual budget, respectively. The reply to the Mackinac Center's request from the Office of the Governor also addressed employee salary information, stating that "this level of detail provides little value to the taxpayer."
- In February 2009, two freshmen Republican members of the Michigan House, (Amash and McMillin) began posting detailed records of their own office spending, including itemized monthly expenditures by category, and the names and salaries of their legislative aides. The House Republican caucus had claimed that it was posting detailed spending data, but to date these two legislators were the only ones actually doing so.
The following table was helpful in evaluating the level of transparency provided by a state spending and transparency database:
|State Database||Searchability||Grants||Contracts||Line Item Expenditures||Dept/Agency Budgets||Public Employee Salary|
- See also: Evaluation of Michigan state website
The Mackinac Center for Public Policy had a transparency website.
The National Taxpayers Union produces a website with weekly transparency e-updates. This was expected to include Michigan data at some point.
- See also: Michigan state government salary
LSJ.com, a Michigan newspaper, offers a resource for searching public payrolls.
Another Michigan news source, MLive.com, had done an extensive series of articles about public school instructor's pay which includes salary databases.
University of Michigan employees' salaries were updated annually at Higher Ed Salaries.
Economic stimulus transparency
- Michigan would receive approximately $705 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.
- Michigan received an estimated $4,925,282,005 from the first stimulus.
- Michigan established an economic recovery website to show how legislators and government officials in Michigan spent Federal funds.
Three Michigan projects were noted in Senator Coburn and Senator McCain's "Summertime Blues, 100 stimulus projects that give taxpayers the blues" report. In one project, the U.S. Department of Health and Human Services gave researchers at the University of Michigan a grant to study population processes and the environment in the foothills of the Nepalese Himalayas. Another project awarded a $60,000 terrorism prevention grant to the ferry boat company serving an island of 600.
- State Budget Solutions, Michigan
- Model transparency legislation from the American Legislative Exchange Council was available at this link.
- Mackinac Center for Public Policy
- Michigan Office of the State Budget
- Michigan Government spending
- Taxpayers United Michigan Foundation
- Michigan Americans for Prosperity
- Wayne County Taxpayers Association
- Gov. Jennifer Granholm, "State of the State address 2010," February 11, 2010
- Gov. Granholm, "State of the State address 2009"
- Lansing State Journal, "40 ways to cut the Michigan budget deficit," May 17,2009
- Associated Press, "More bad news ahead for Michigan state budgets," May 13,2009 (dead link)
- ABC News "Michigan Lawmakers Finish Passing State Budget" Sept. 29, 2010
- The Detroit Free Press "Granholm signs budget bills into law" Sept. 30, 2010
- State Budget Office
- State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
- Michigan State Budget, Executive Budget Fiscal Year 2011
- USA Spending, State Guesstimated* Government Spending
- FY2011 CAFR
- The Lansing State Journal "Michigan's budget could get infusion" Oct. 17, 2011
- The Chicago Tribune "Michigan AG: Use surplus to hire 1,000 officers" Jan. 25, 2012 (dead link)
- Detroit Free Press "State budget at a glance" Sept. 30, 2010
- The Detroit News "Gov offers new plan to balance budget" Aug. 19, 2010
- Businessweek "Universities would take cut in Mich. budget plan" Sept. 28, 2010
- Businessweek "Michigan Legislature OKs state worker retiree plan" Sept. 24, 2010
- The Lansing State Journal "Lawmakers OK some pieces of Michigan state budget" Sept. 17, 2010
- The Detroit News "State eyes unclaimed cash as a quick fix" Sept. 27, 2010
- Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
- H.R. 1586
- Detroit Free Press "State to redo school aid plan" Oct. 13, 2010
- The Detroit Free Press "Governor spikes liquor changes" Oct. 13, 2010
- The Detroit Free Press "State budget deal struck without a tax hike" Sept. 8, 2010
- The Detroit News "Budget proposal pits local governments against state employees" Sept. 12, 2010
- Michigan Office of the State Budget Web site, accessed October 26, 2009
- Michigan Office of the State Budget Web site, accessed October 26, 2009
- House Fiscal Agency, "Appropriations: Summary and Analysis, FY 2008-09," October, 2008
- House Fiscal Agency, "Appropriations: Summary and Analysis, FY 2007-08," December, 2007
- National Governors Association and National Association of State Budget Officers Fiscal Survey of States June 2010 (dead link)
- Michigan Office of the Auditor General Web site, accessed October 26, 2009
- audit reports
- Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
- Michigan Office of State Budget Web site, accessed October 26, 2009
- Mackinac Center for Public Policy, State Checkbook Still Missing from Internet, Oct 2008
- The Detroit News "Michigan budget reports scrutinized" Dec. 27, 2010
- Lansing State Journal, Region's lawmakers want to open budget talks to public, January 6, 2010
- Michigan Department of State, Land publishes FY07 spending, April 23, 2008
- Mackinac Center for Public Policy, Mackinac Center’s “Show Michigan the Money” Project Prompts Michigan Department of State to Post Unprecedented Detail in Department Spending, April 23, 2008
- Mackinac Center for Public Policy, "State Checkbook Still Missing from Internet," Oct. 6, 2008
- Mackinac Center for Public Policy, Governor response, July 17,2008
- Amash Spending (dead link)
- McMillin Spending (dead link)
- "Show Michigan The Money"
- State of Michigan salary search
- Teacher Pay series
- High Ed Salaries
- Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
- Wall Street Journal, "Stimulus Spending by State," April 23,2009
- Michigan Economic Recovery Website
- "Summertime Blues, 100 stimulus projects that give taxpayers the blues" August 2010
State of Michigan
|State executive officers||
Governor | Lieutenant Governor | Attorney General | Secretary of State | Treasurer | Auditor General | Superintendent of Public Instruction | Commissioner of Insurance | Director of Agriculture and Rural Development | Director of Natural Resources | Director of Labor and Economic Growth | Chairman of Public Service Commission |
Michigan Supreme Court | Supreme Court Elections | Court of Appeals | First Circuit Court of Appeals | Second Circuit Court of Appeals | Third Circuit Court of Appeals | Fourth Circuit Court of Appeals | List of Michigan Circuit Courts | Judicial Nominating Commission | Judicial news | Judicial activist organizations |