Difference between revisions of "Michigan state budget"

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*'''Michigan Department of State provides first online expenditure report''':On April 23, 2008, [[Michigan Secretary of State|Michigan Secretary of State]] Terri Lynn Land announced that the Michigan Department of State would begin posting quarterly expenditure reports.<ref name="land">[http://www.michigan.gov/sos/0,1607,7-127--190488--,00.html Michigan Department of State, Land publishes FY07 spending, April 23, 2008]</ref> 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.<ref name="land" /> 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.<ref>[http://www.mackinac.org/article.aspx?ID=9420 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]</ref>  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.)
 
*'''Michigan Department of State provides first online expenditure report''':On April 23, 2008, [[Michigan Secretary of State|Michigan Secretary of State]] Terri Lynn Land announced that the Michigan Department of State would begin posting quarterly expenditure reports.<ref name="land">[http://www.michigan.gov/sos/0,1607,7-127--190488--,00.html Michigan Department of State, Land publishes FY07 spending, April 23, 2008]</ref> 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.<ref name="land" /> 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.<ref>[http://www.mackinac.org/article.aspx?ID=9420 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]</ref>  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.<ref>[http://www.mackinac.org/article.aspx?ID=9854 ''Mackinac Center for Public Policy'', "State Checkbook Still Missing from Internet", Oct. 6, 2008]</ref> 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."<ref>[http://www.mackinac.org/archives/2008/transperency-GOVresponse.pdf Mackinac Center for Public Policy, Governor response, July 17,2008]</ref>
+
*'''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.<ref>[http://www.mackinac.org/article.aspx?ID=9854 ''Mackinac Center for Public Policy'', "State Checkbook Still Missing from Internet," Oct. 6, 2008]</ref> 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."<ref>[http://www.mackinac.org/archives/2008/transperency-GOVresponse.pdf Mackinac Center for Public Policy, Governor response, July 17,2008]</ref>
 
*In February 2009, two freshmen Republican members of the Michigan House ([http://www.gophouse.com/Publications/72/AmashSpending.pdf Amash] and [http://www.gophouse.com/Publications/45/2McMillin%20Office%20Allotment.pdf 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.
 
*In February 2009, two freshmen Republican members of the Michigan House ([http://www.gophouse.com/Publications/72/AmashSpending.pdf Amash] and [http://www.gophouse.com/Publications/45/2McMillin%20Office%20Allotment.pdf 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.
  
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| text align="right"| $44,633,407,900
 
| text align="right"| $44,633,407,900
 
| text align="center"| $14,917,594,200
 
| text align="center"| $14,917,594,200
| text align="left"| $29,715,813,700<ref>[http://house.michigan.gov/hfa/PDFs/summ_analy08-09.pdf ''House Fiscal Agency'', "Appropriations: Summary and Analysis, FY 2008-09", October, 2008]</ref> (Increased $108 million)
+
| text align="left"| $29,715,813,700<ref>[http://house.michigan.gov/hfa/PDFs/summ_analy08-09.pdf ''House Fiscal Agency'', "Appropriations: Summary and Analysis, FY 2008-09," October, 2008]</ref> (Increased $108 million)
  
 
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|-
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| text align="right"| $43,578,704,400
 
| text align="right"| $43,578,704,400
 
| text align="center"| $13,970,996,300
 
| text align="center"| $13,970,996,300
| text align="left"| $29,607,708,100<ref name="BudgetFigures">[http://house.michigan.gov/hfa/PDFs/summ_analy07-08.pdf ''House Fiscal Agency'', "Appropriations: Summary and Analysis, FY 2007-08", December, 2007]</ref> (Increased $402 million)
+
| text align="left"| $29,607,708,100<ref name="BudgetFigures">[http://house.michigan.gov/hfa/PDFs/summ_analy07-08.pdf ''House Fiscal Agency'', "Appropriations: Summary and Analysis, FY 2007-08," December, 2007]</ref> (Increased $402 million)
  
 
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Revision as of 07:47, 20 March 2014

Michigan state budget

Flag of Michigan.png
Budget calendar:  Annual
Fiscal year:  2013
Date signed:  June 26, 2012
Other state budgets
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Michigan's legislature completed work on the FY2013 state budget on June 5, 2012, four months before the start of the fiscal year. Lawmakers approved a roughly $49 billion state budget, including $14.6 billion bill to fund public schools, community colleges and universities and a $33.5 billion general fund budget, which covers 13 state agencies.[1] Governor Rick Snyder signed the budget bills into law on June 26, 2012.[2]

The state's fiscal year begins on October 1st and ends on September 30th of the following calendar year.[3] The state operates on an annual budget cycle.[4]

As of 2012, Michigan had a total state debt of approximately $124,496,677,000, when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans and the budget gap.[5] As of 2012, the total state debt was down from the prior year total of $125,329,485,000.[6]

As of 2012, Michigan's total state debt per capita was $12,605.74.[7]

FY2014 State Budget

Governor Snyder presented his proposed FY2014 state budget on Feb. 7, 2013. The $51 billion all-funds budget included a $9.3 billion general fund.[8]

Under the proposed budget, the state's fuel tax would increase from $0.19 per gallon for unleaded fuel and $0.15 per gallon for diesel fuel to $0.33 per gallon.[9] The proposed budget also called for increasing certain vehicle registration fees to raise $1.2 billion for the program to fix the state's roads and bridges that were in disrepair.[8]

The governor agreed to expand the state's Medicaid program under the Affordable Care Act to include about 470,000 more uninsured low-income people, and state officials said they expected $20 billion in federal funds to pay for the expansion.[8]

Other spending increases included in Snyder's proposed budget:

  • $8.6 million to create a new agency within the Department of Military and Veterans Affairs;[9]
  • 2% funding increases for K-12 schools, community colleges and universities, including $30.7 million more for public universities and community colleges and bringing the total state funding for K-12 education to $11.5 billion;[9][8]
  • $130 million over two years for early childhood education;[9]
  • $15.2 million for training of 107 troopers for the Michigan State Police;[9]
  • $75 million deposit in the state’s Rainy Day Fund, bringing the total to $580 million.[9]

FY2013 state budget

Michigan's legislature finished work on the FY2013 state budget on June 5, 2012, four months ahead of the constitutional deadline of October 2012, and the governor signed the bills into law on June 26, 2012.[2]

Lawmakers approved a $14.6 billion bill to fund public schools, community colleges and universities next year.[1] The education bill increased higher education funding by 3%, but did not make up for the 15% cuts instituted in FY2012.[1] The omnibus budget bill became Public Act 200 of 2012.[10] The education budget became Public Act 201 of 2012.[11]

Education and health and human services comprised 75% of state budget spending.[12]

Budget highlights included:[1]

  • Raising the minimum per pupil funding amount from $6,846 to $6,966, a $120 increase;[13]
  • Increases for state police training;[1]
  • Increases in health care;[1]
  • Heat assistance for the poor;[1]
  • $130 million into the state's Rainy Day Fund; and[1][14] bringing the account to $505 million, its largest balance in more than a decade.[2]
  • 3% increase in funding for community colleges and universities with performance metrics that keep college tuition down.[12]


Education budget

The education budget for FY2013 raised the minimum per pupil funding amount from $6,846 to $6,966, a $120 increase.[15]

For higher education, universities saw a 3% increase in funding, but the budget required universities to limit tuition and fee increases to no more than 4%. If schools exceeded that limit, they would lose part of their state funding. Increases included:[16]

  • $36 million increase for public universities, to a total of $1.4 billion in state funding;[16]
  • Community colleges took $10.3 million more, for a total of $294 million.[16]

Legislative proposed budget

The state Senate and House of Representatives approved a $7.5 billion general fund budget, which covers 13 state agencies, on May 31, 2012. The House approved the budget by a vote of 61-49 and the Senate voted 20-16. The education budgets were separate from the general fund budget.[17]

Highlights of the legislative budget included:

  • An additional $25 million for film industry incentives, and the governor said he could agree to the increase;[17]
  • $44 million more for The Michigan State Police, including $18 million for additional troopers and enhanced services in high-crime areas, such as Detroit, Pontiac, Saginaw and Flint;
  • The Rainy Day Fund got a $140 million cash infusion, which could help the state boost its credit rating;
  • $10.8 million in The Department of Corrections budget to restructure the prison system.[17]

Republicans, who controlled the Senate in 2012, planned to spend roughly $150 million less overall than what Governor Snyder proposed for FY2013 due to lower-than-anticipated tax revenue.[18]

Governor's proposed budget

Governor Snyder unveiled his $48.2 billion proposed budget for FY2013 on Feb. 9, 2012. Under the proposal, the state's general fund totaled $9.2 billion, while the school aid fund totaled $11.4 billion. The proposed transportation budget totaled $3.3 billion.[19] The budget included a $457 million onetime surplus from 2011 and about $630 million in projected increased revenues for 2012 and 2013. Snyder's plan socked away $130 million to boost Michigan’s Rainy Day Fund.[20]

Education and health and human services accounted for 75% of the proposed budget.[21] It was also the first budget in more than a decade to increase funding for local governments, allocating an extra 2% for constitutional revenue sharing, plus additional money municipalities would compete for based on adopting "best practices."[22]

Highlights of the governor's proposed budget included:

  • Offering $200 million to K-12 school districts that engage in best practices;[19]
  • Increasing funding to state universities by $36.2 million or 3%, with much of it tied to performance incentives and keeping tuition hikes to no more than 4%;[19]
  • $119 million from the general fund to repair roads and bridges;[20]
  • $50 million in increased public safety funding, with a focus on Detroit, Flint, Pontiac and Saginaw;[19]
  • $209 million for thew newly created Michigan Office of Great Start, which focuses on early childhood education;[19]
  • $195 million to boost the state's economic development efforts, with a special emphasis on "economic gardening."[19]

FY2012 state budget

See also: state budgets

Governor Snyder asked the legislature for $38.25 million from the state's general fund to pay a portion of the $106 million the state owed in interest on Michigan's $3.1 billion federal unemployment insurance debt. The remaining portion of the interest payment was to come from a state solvency tax that went into effect in 2011 on Michigan employers and from state unemployment penalty and interest funds.[23]

On June 21, 2011, Snyder signed the FY2012 $47 billion budget into law.[24] The two budget bills signed by the governor were House Bill 4526 and House Bill 4325.[25][26] The last time the state had a completed budget in place this early was 1981.[12][24]

The budget assumed $265 million in savings in 2011-12 from employee concessions. The governor hoped to convince state employee unions to reopen their contracts to provide those concessions and delayed making layoffs in September 2011. The union contracts did not expire until the end of the 2012 calendar year.[27] One of the concessions the governor sought was having employees increase the percentage of health care costs that they paid for from 10% to 20%. At the unions' urging, the governor agreed to study whether the state government had too many managers, and to consider reducing the number of managers. The state's ratio at the time the study started was six employees to each manager. The union claims that if the ratio was 7 to 1 that the state would save $75 million.[28]

In FY2012, the state deposited $362.7 million into its emergency fund, a fund that in FY2011 had a balance of only $2.2 million.[29]

Before the budget was signed into law, the state faced a projected $1.85 billion deficit in FY2012.[30][31]

The governor said that the budget would foster a stable environment for business, due in large part to a tax cut that essentially did away with business taxes on companies except for large corporations with shareholders. The elimination of that tax could cost the state $1 billion in revenue in FY2012.[32] The budget taxed public pensions and reduced exemptions for private pensions.[33]

The budget included several cuts in funding. The School Aid Fund gave districts $12.7 billion, $300 per pupil less than FY2011, a 2.2% reduction. However, school districts that showed cost-cutting initiatives could receive additional funds from a $100 million fund. Public universities saw 22% less in state aid -- 15% less if they held down tuition increases to 7% or less. Local government received $100 million less.[12]

The governor vetoed some portions of the budget bill, including a $4.25 million adoption subsidy, and he made it clear that some language in the bill was not legally enforceable, including provisions regarding universities offering health care benefits to employees' domestic partners.[32] That included provisions added by Republican lawmakers that would have penalized universities that offered health care benefits to employees' domestic partners and required public universities doing embryonic stem cells to report data to the state.[32][12]

As of 2011, the state received about $400 million a week from the federal government, which was approximately 44% of the total state budget.[34]

Deal negotiated

On April 12, 2011, the governor and legislative leaders announced that they had reached a budget deal that would modify the governor's proposed tax on pensions and delay a scheduled reduction in the personal income tax rate, but make $150 million in undetermined spending cuts in addition to those originally proposed by the governor.[35]

Taxes

Under the budget, the pension income tax exemption would continue but would exempt those aged 67 and older from the tax, and for those between 60 to 66 years old, the first $20,000 would be exempt for an individual and the first $40,000 for a couple. For retirees aged 59 and younger, pensions would be taxed at the full rate until they turn 67. All income, including Social Security income, would apply against that higher-than-normal exemption. The tentative agreement would delay the planned income tax reduction to January 1, 2013, generating an additional $210 million in revenue.[35]

The legislature enacted a 6% flat tax on corporations, replacing the state's complex business tax and reducing corporate income taxes by $1 billion for FY2012, which started October 1. The Senate narrowly passed the measure, with Lieutenant Governor Brian Calley casting the tie-breaking vote.[36]

Education

On May 5, 2011, the House approved its education funding bill by a vote of 57-53. The House proposal cut school funding by an additional $256 to $297 per student, on top of a $170 per student cut that was already in place. Funding for community colleges and universities also would be cut.[37] The Senate Appropriations Committee was considering a bill that would reduce state aid by $340 per pupil.[38] Differences had to be reconciled before a budget could be adopted.

Governor's proposed budget

After being sworn in, Governor Rick Snyder promised to had a two-year state budget in place by July 1, whereas the state had typically had a one-year budget that had taken until October 1 to finalize.[39]

The governor named John Nixon, Utah's budget director, as Michigan's new state budget director as of January 1, 2011.[40]

In February 2011, Governor Snyder introduced a $45 billion budget intended to close a $2 billion budget deficit for 2012. The budget included a series of cuts in several state departments. Snyder wanted lawmakers to cut the state budget by $1.5 billion, boost income tax revenue by more than $1.7 billion and cut business taxes by $1.8 billion.

Prior to submitting his budget proposal, Snyder unveiled the Citizen's Guide to Michigan's Financial Health, which laid out the state of the Michigan economy.[41] The guide showed that the state’s citizens were poorer, older and deeper in debt than they were a decade prior. The guide also showed that taxpayer obligations for pensions and health care for retired public workers were unsustainable. It also pointed out that the 15% of workers in the state who were public employees had seen their salaries rise over the last decade, while private employees in the state had experienced diminished paychecks and fewer job perks.[42]

To close the state's deficit, Snyder proposed a new tax on pensions and a flat corporate tax that would end billions of dollars of tax incentives. He also proposed reduced funding to municipalities, education budgets and public retiree health benefits.[43]

Central to the budget was a reshaping of tax policy that eliminated the state's complex business tax and replaced it with a flat 6% corporate-profit tax that would raise about $1 billion less revenue.[44] Some of Snyder's proposals included:[45]

  • Dropping the individual income tax rate from 4.35% to 4.25%.
  • Remove the Michigan Earned Income Tax Credit that provides an average $432 benefit to some 800,000 low-wage filers
  • Eliminate the state income tax exemption for pensions.
  • Eliminate business credits awarded for films.
  • Eliminate statutory revenue sharing payments for cities, villages, and townships in Fiscal Year 2012, leading to a net savings of $92.1 million.
  • Cut per pupil funds $300, in addition to the currently budgeted $170 per pupil reduction.
  • Eliminate 300 field worker positions in the Department of Human Services.
  • Close one prison to be named later this year.
  • Reduce the number of Michigan State Police posts, saving $3.2 million.
  • Reduce state aid to libraries in the Department of Education budget by $2.3 million in the general fund, with $950,000 directed to the Michigan eLibrary, resulting in net savings of $1.4 million.
  • Sets a lifetime limit of 48 months for residents to receive welfare payments, with exemptions for incapacity and hardship.

The proposal also had $200 million for a new incentive-based revenue sharing program for cities, villages and townships. Those standards were expected to be detailed in March.

Snyder also planned to tax the pension incomes of senior citizens to the tune of $900 million in order to offset losses from a $1.9 billion cut in business taxes.[46] Then-current Michigan law exempted all Social Security, public pension payments, IRA, annuity and employer-contributed 401(k) withdrawals from income tax. Under proposed law, all retirement income, except for Social Security, would be taxed at a 4.25% rate. Snyder said senior citizens made up about 13% of the state's population, and that this figure would grow close to 20% over the next 20 years.

He later revised his original pension tax proposal, calling instead for raising about $300 million through retiree income tax changes. That plan was passed by the House Tax Policy Committee on April 27, 2011.[47]

Over the first decade of the new millennium Michigan was in a recession as its manufacturing base crumbled and its population declined. During that time special interests and lawmakers fought over dwindling revenues. When Snyder was elected in 2010 he announced there were going to be shared pains in the new budget, including attempts to change the tax status of pensions. In Michigan, public pensions were fully tax-exempt and private pensions were exempted up to $42,240.[48]

It was unlikely all of Snyder's goals would be included in the final budget passed by the legislature. State lawmakers told the South Bend Tribune that cuts were necessary, but that the final budget may show cuts in areas other than what Snyder proposed.[49]

Education cuts

School administrators fear Gov. Snyder's proposed cuts would force school districts to cut staff, close buildings, privatize some services, create more online courses and cause administrators to share more duties, measures Snyder maintains would cause school districts to become more efficient while still providing an excellent education. Michigan had more than 500 school districts.[50] More than half of Michigan's school districts include fewer than 2,000 students.[51]

Snyder proposed cuts between 8 and 10% for school districts, which translates into a $715-per-student reduction. Those reductions include the loss of $170 per student in federal money, a $300 cut by Snyder in per-pupil funding and the fact that districts had to pay a bigger share of pensions, costing them $245 per student, according to the nonpartisan Citizens Research Council.[52]

Several media outlets in Michigan, including the Detroit Free Press, were calling for the consolidation of some school districts following the release of a 2010 Michigan State University study. The study said taxpayers could save $612 million a year after three years by consolidating districts around county lines, without closing any schools. Putting all public school transportation, food service and operations and maintenance at the county level would save $328 million, the study said.[53]

Snyder also proposed to shift $896 million in the school aid fund to colleges and universities. The proposed shift from that fund, typically used for k-12 programs, angered public educators who say institutes of higher learning had other means to raise funds.[54]

Snyder had not thrown support behind bills in the legislature that would eliminate tenure, freeze teachers' pay if a contract expires, force teachers to pay at least 20 percent of their health care costs or otherwise affect collective bargaining rights.[55]

Snyder's proposed educational budget cuts were not popular. According to an EPIC-MRA poll, 62 percent oppose Snyder's plan, with 32 percent in favor and 6 percent undecided. The poll surveyed 600 likely voters from Feb. 26 through Tuesday and had a margin of sampling error of plus or minus 4 percentage points.[56] According to Ann Arbor school leaders, the district was facing a $7 million deficit, but if Snyder's proposals were approved, that deficit could jump to between $15 and $20 million.[57]

Union protests

On Feb. 22, 2011, hundreds of union members lobbied at the state Capitol, urging lawmakers to vote against measures they say would threaten collective bargaining rights, while smaller groups of activists rallied outside the Capitol against other budget proposals, including the elimination of some tax exemptions and reductions in school funding.[58]

Union members were upset over the Republican-controlled legislature's attempts to take away binding arbitration, which allows a neutral party to determine what was and isn't fair in contracts for police and fire departments.[59]

Other legislative proposals angering Michigan union leaders include emergency financial managers powers to remove elected officials and break labor contracts as they work to turn around failing schools and cities.[60] The measures change the way emergency financial managers were selected and expand their authority, including suspending collective bargaining for up to five years and rejecting labor agreements.

Other proposals raised by Michigan lawmakers that upset labor organizations include a plan to create right-to-work zones and repeal the prevailing wage law.

Some of the protesters at the capitol were also protesting Detroit Public School’s emergency manager Robert Bobb’s plan to close public school, which would increase class sizes to 60 students. The deficit elimination plan filed with the state in January by emergency financial manager Robert Bobb, was expected to wipe out the district's $327 million deficit by 2014.[61]

The American Association of Retired Persons was planning to protest Snyder's proposal to tax senior's pension payments. The AARP called Snyder's proposals an "all out attack on older Michiganders."[62] Current AARP Michigan President Eric Schneidewind says the measure would take money from seniors and hand it to corporations.[63]

On March 16 a host of progressive groups, led by state unions, would protest at the state capitol on a range of issues including budget proposals and 40 pieces of legislation that activists say would undermine collective bargaining rights in the state.[64]

Budget transparency

At present, 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.[65]

News

  • 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.[66] Gov. Snyder's spokeswoman said those estimates "seem to be somewhat off base."[66]
  • 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.[67]
  • Michigan Department of State provides 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.[68] 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.[68] 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.[69] 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.[70] 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."[71]
  • 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.

Government tools

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
Michigan Transparency and Accountability N
600px-Red x.png
N
600px-Red x.png
P
Partial.png
N
600px-Red x.png
{{{1}}}
N
600px-Red x.png
See also: Evaluation of Michigan state website

Independent transparency sites

The Mackinac Center for Public Policy had a transparency website, "Show Michigan The Money"

The National Taxpayers Union produces an "www.showmethespending.org" website, with weekly transparency e-updates. This was expected to include Michigan data at some point.

Multi-Measure Budget Transparency Profile

The Institute of Government and Public Affairs at the University of Illinois had created a multi-measure transparency profile for Michigan, which measures state transparency as of September 2011 using indicators from a range of organizations, including Sunshine Review. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.

Budget background

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:[72]

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.[73]


Budget figures

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[74] (Increased $108 million)
FY 2007-2008 $43,578,704,400 $13,970,996,300 $29,607,708,100[75] (Increased $402 million)
FY 2006-2007 $42,385,938,000 $13,180,056,000 $29,205,882,000[75] (Increased $1.079 billion)
FY 2005-2006 $40,904,128,000 $12,778,003,500 $28,126,124,500[75] (Increased $677 million)
FY 2004-2005 $39,923,663,500 $12,351,486,100 $27,448,662,539[75] (Decreased $247 million)
FY 2003-2004 $39,241,892,100 $11,546,223,200 $27,695,668,900[75]

General Fund[76]

Category FY2009 Amount in millions Actual FY 2010 Amount in millions Estimated
Beginning Balance 458 177
Revenues 7,161 6,891
Adjustments 1,014 1,075
Total Resources 8,633 8,143
Expenditures 8,456 8,108
Adjustments 0 0
Ending Balance 177 34
Budget Stabilization Fund 2 2

Accounting principles

See also: Michigan government accounting principles

The Michigan 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.[77]

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.[78] Michigan's CAFRs were published online by the Office of Financial Management. Michael J. Moody was the Director Office of Financial Management. Bob Emerson was the Director of the Office of State Budget.[79][80]


Credit Rating Fitch Moody's S&P
Michigan AA- Aa3 AA-[81]

In July 2011, Fitch Ratings revised its outlook for Michigan bonds from "stable" to "positive," while leaving the state's overall rating at AA-.[82]

Stimulus

Michigan received $7.72 billion in federal stimulus funding between February 2009 and June 2013.[83]

Public Employees

See also: Michigan public employee salaries or Michigan public pensions

According to 2011 Census data, the state of Michigan employed a total of 573,465 people.[84] Of those employees, 381,549 were full-time employees receiving a net pay of $1.85 billion per month and 191,916 were part-time employees paid $217.2 million per month.[84]

See also

External links

Additional reading

References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 The Detroit News "Senate takes final votes on state budget, sends it to Snyder" June 6, 2012
  2. 2.0 2.1 2.2 MLive.com "http://www.mlive.com/news/index.ssf/2012/06/gov_rick_snyder_signs_outstand.html "Gov. Rick Snyder signs 'outstanding' state budget, calls Detroit bridge provisions unenforceable" June 26, 2012
  3. State Budget Office
  4. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting" April 2011
  5. State Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012
  6. State Budget Solutions “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
  7. State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012
  8. 8.0 8.1 8.2 8.3 Reuters "Michigan gov. proposes expanded budget amid local, federal risks" Feb. 7, 2013
  9. 9.0 9.1 9.2 9.3 9.4 9.5 The Detroit Free Press "Gov. Snyder's budget calls for fuel tax, vehicle registration increases to fix roads" Feb. 7, 2013
  10. Public Act 200 of 2012
  11. Public Act 201 of 2012
  12. 12.0 12.1 12.2 12.3 12.4 Michigan.gov "Snyder signs FY 13 budget bills" June 26, 2012
  13. WZZM13.com "State budget increases spending" June 6, 2012
  14. The News Star "Budget turnarounds: Some states socking cash away" Jun 23, 2012
  15. WZZM13.com "State budget increases spending" June 6, 2012
  16. 16.0 16.1 16.2 The Daily Press "Senate OKs state budget" June 6, 2012
  17. 17.0 17.1 17.2 The Detroit Free Press "State House, Senate approve general fund budget and send it to Snyder" May 31, 2012
  18. The Lansing State Journal "Michigan lawmakers may seek scaled-back state budget" March 16, 2012
  19. 19.0 19.1 19.2 19.3 19.4 19.5 The Detroit News "Snyder budget: more for education, public safety, cities" Feb. 9, 2012
  20. 20.0 20.1 [The Detroit Free Press "Rick Snyder proposes more funding for roads, police, schools" Feb. 9, 2012]
  21. Press Release by Gov. Snyder "Governor’s proposed FY 2013 budget strategically invests in state’s future" Feb. 9, 2012
  22. The Detroit Free Press "Moody's calls Snyder budget proposal, law changes 'key turning point' for Michigan" Feb. 17, 2012
  23. Crain's Detroit Business "$38.25 million sought from state general fund to pay interest on unemployment insurance debt owed to U.S." Sept. 20, 2011
  24. 24.0 24.1 The Detroit News "Gov. Snyder signs 'milestone' budget for Michigan" June 22, 2011
  25. House Bill 4526
  26. House Bill 4325
  27. The Detroit Free Press "Snyder delays move on state employee layoff notices" Sept. 1, 2011
  28. The Detroit Free Press "Too many managers in Michigan government? Gov. Rick Snyder orders study" Sept. 16, 2011
  29. The News Star "Budget turnarounds: Some states socking cash away" Jun 23, 2012
  30. The Detroit News "Public workers in Snyder's sights" Jan. 3, 2011
  31. Bloomberg "Budget, economy top themes as Mich. lawmakers meet" Jan. 13, 2011
  32. 32.0 32.1 32.2 Businessweek "Gov. Snyder signs $47.4B Michigan budget Tuesday" June 21, 2011
  33. Cite error: Invalid <ref> tag; no text was provided for refs named milestones
  34. [ http://detnews.com/article/20110801/POLITICS03/108010401/Debt-deal’s-effect-on-Mich.-‘hard-to-know’#ixzz1TzLiKILF The Detroit News "Debt deal's effect on Mich. 'hard to know'" August 1, 2011]
  35. 35.0 35.1 The Detroit News "Budget deal phases in pension tax, delays income tax rollback" April 12, 2011
  36. The Wall Street Journal "Michigan Legislature Passes New Tax Plan With Flat Corporate Tax" May 12, 2011
  37. Businessweek "Michigan House approves school funding cuts" May 5, 2011
  38. The Detroit News "State school aid budget cuts $340 per student" April 21, 2011
  39. The Detroit Free Press "Gov. Snyder sets ambitious budget goal" Jan. 4, 2011
  40. The Deseret News "Utah budget director to be 'super executive' in Michigan" Dec. 1, 2010
  41. [http://www.michigan.gov/snyder/0,1607,7-277-57959---,00.html Citizen's Guide to Michigan's Financial Health
  42. Grand Rapids Press, A Sobering Assessment of Michigan's Budget Woes, Feb. 6. 2011
  43. The Wall Street Journal "Budget Battles Roil Straitened States" Feb. 25, 2011
  44. Wall Street Journal, Lasting Budget Fix Sought in Michigan, Feb. 17, 2011
  45. Associated Press, Governor's Budget Proposal Details, Feb. 17, 2011
  46. Ann Arbor.com, Snyder Tax Cut Would Be Costly For Thousands of Michigan Residents, Including Many Seniors, March 4, 2011
  47. Forbes "Snyder's tax plan for Michigan clears first hurdle" April 27, 2011
  48. Wall Street Journal, Lasting Budget Fix Sought in Michigan, Feb. 17, 2011
  49. South Bend Tribune, Michigan's Credit Card Called 'Maxed Out', Feb. 23, 2011
  50. Associated Press, Gov. Rick Snyder's Education Cuts Aimed at Spurring Change, March 5, 2011
  51. The Port Clinton News Herald "Editorial: Snyder budget forces schools to get lean -- quickly" March 12, 2011
  52. Associated Press, Gov. Rick Snyder's Education Cuts Aimed at Spurring Change, March 5, 2011
  53. The Grand Rapids Press, was Momentum Growing to Merge School District, Share Services?, March 13, 2011
  54. Associated Press, Gov. Rick Snyder's Education Cuts Aimed at Spurring Change, March 5, 2011
  55. Associated Press, Gov. Rick Snyder's Education Cuts Aimed at Spurring Change, March 5, 2011
  56. Associated Press, Gov. Rick Snyder's Education Cuts Aimed at Spurring Change, March 5, 2011
  57. Annarbor.com, AnnArborg.com "Local Leaders Rally in Ann Arbor, Call Governor's Budget an Attack on Michigan Families, Education" March 14, 2011
  58. [Feb. 22, 2011]
  59. Chicago Tribune, Protests Continue as Lawmakers Mull Arbitration, Feb. 23, 2011
  60. Reuters, Michigan Workers to Oppose 'Anti-Labor' state proposals, Feb. 21, 2011
  61. Huffington Post, Michigan Officials Order Robert Bobb to Shut Half the City's Schools, Feb, 21, 2011
  62. Michigan Messenger, Capitol Protests to Ramp Up this Week, March 14, 2011
  63. Public News Service, AARP: Don't Balance MI Budget on Backs of Seniors. March 14, 2011
  64. Michigan Messenger, Snyder Budget Foes Prepare for Battle, March 15, 2011
  65. Mackinac Center for Public Policy, State Checkbook Still Missing from Internet, Oct 2008
  66. 66.0 66.1 The Detroit News "Michigan budget reports scrutinized" Dec. 27, 2010
  67. Lansing State Journal, Region's lawmakers want to open budget talks to public, January 6, 2010
  68. 68.0 68.1 Michigan Department of State, Land publishes FY07 spending, April 23, 2008
  69. 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
  70. Mackinac Center for Public Policy, "State Checkbook Still Missing from Internet," Oct. 6, 2008
  71. Mackinac Center for Public Policy, Governor response, July 17,2008
  72. Michigan Office of the State Budget Web site, retrieved October 26, 2009
  73. Michigan Office of the State Budget Web site, retrieved October 26, 2009
  74. House Fiscal Agency, "Appropriations: Summary and Analysis, FY 2008-09," October, 2008
  75. 75.0 75.1 75.2 75.3 75.4 House Fiscal Agency, "Appropriations: Summary and Analysis, FY 2007-08," December, 2007
  76. National Governors Association and National Association of State Budget Officers Fiscal Survey of States June 2010
  77. Michigan Office of the Auditor General Web site, retrieved October 26, 2009
  78. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  79. Michigan Office of State Budget Web site, retrieved October 26, 2009
  80. CAFRs
  81. Pew Stateline Infographic on State Credit Ratings. Accessed September 26, 2013
  82. The Detroit Free Press Feb. 17, 2012
  83. Recovery, "Stimulus Spending by State." Accessed September 26, 2013
  84. 84.0 84.1 2011 Michigan Public Employment U.S. Census Data