Michigan Budget Reflects Deep Cuts; Funding for Workforce, Community Colleges Preserved

Gov. Jennifer Granholm signed the final FY10 budget bills last week, cutting nearly $1.9 billion in spending and warning state agencies of a possible 20 percent cut in state spending next year. To help fill the FY10 deficit, the enacted budget incorporates $1 billion in federal stimulus funds. With less than $600 million in federal funds available next year, the state could face a shortfall ranging from $800 million to $1 billion, reports The Detroit News.

The Michigan Strategic Fund, administered by the Michigan Economic Development Corporation, will receive $114.6 million in FY10, down from $152.6 million approved last year. This includes $28.5 million for the 21st Century Jobs Fund, a sharp decrease from last year’s appropriation of $65 million. The fund supports job creation in emerging fields such as renewable energy, life sciences, homeland security, and advanced manufacturing by investing in basic research at universities and providing access to capital. The business incubator program is funded at $1.3 million, a $50,000 boost over last year.

For the No Worker Left Behind Initiative, a workforce training program that provides financial assistance for training in high-demand fields, a total of $124.2 million is appropriated. Most of the funding for the program, which is now in its second year, comes from federal sources. State funding for the program was cut $2.7 million this year, reports The Detroit News. Last year, lawmakers approved $15 million for the initiative, which was later cut in half by executive order.

Michigan State University (MSU) announced a restructuring plan for the MSU Extension and Agricultural Experiment station that focuses on green economy initiatives, following an agreement made with Gov. Granholm to preserve funding for the programs. MSU Extension will assist in developing community-based wind and solar energy projects and support the growth of biomass-based companies. The FY10 enacted budget includes $34.2 million for the Agricultural Experiment Station and $29.5 million for the Cooperative Extension Service.

Higher education spending is reduced by $150 million in FY10 with funding for the state’s Promise grant scholarships eliminated. Beginning with the graduating class of 2007, the scholarships provided up to $4,000 to high school graduates for successfully completing two years of postsecondary education. Community colleges, on the other hand, are spared from any cuts in recognition of their role in training workers for the new economy, reports The Detroit News. Community colleges will receive $299.4 million in FY10, the same amount as last year.

The corresponding budget bills for General Government (SB 245), Energy, Labor & Economic Growth (SB 243), and Higher Education (HB 4441) are available at: www.legislature.mi.gov.