Legislature starts taking steps in adopting next state budget

DATELINE: LANSING Mich.

Divided state lawmakers have begun adopting parts of the next budget for state government but haven't answered the big question of how much money will be available to pay the bills.

"There's a lot to do. This is the first inning in a rather long game," said Senate Majority Leader Mike Bishop, R-Rochester.

Both the Democratic-led House and Republican-controlled Senate on Wednesday began swapping a slew of bills with spending guidelines for individual state departments for the budget year that starts Oct. 1. But bipartisan support on several issues was lacking as debate over bills rolled into early Thursday morning.

Senate Republicans approved 10 bills at spending levels about $163 million below Democratic Gov. Jennifer Granholm's recommendations. House Democrats, meanwhile, prepared separate bills that would spend more than the governor proposed, including doubling parts of her original 2.5 percent funding increase for public universities.

The Legislature is months behind the usual schedule for moving budget bills because Republicans and Democrats disagree over whether taxes should be raised to help balance the budget, which faces a projected $1.6 billion shortfall.

House Democrats have introduced a wide range of proposals including raising the income tax and slapping a 4-to-6 percent sales tax on some types of services but they haven't voted on any of them. Other revenue raising ideas include a higher tax on liquor and higher fees on phone service. Another proposal discussed this week would allow horse tracks to open casinos, but that would require a vote of Michigan citizens because of a 2004 constitutional amendment.

House Speaker Andy Dillon, D-Redford, made some proposals to Bishop this week. But neither camp has said what was in the mix of possible tax increases, spending cuts and structural changes to government. Dillon acknowledged the House is passing bills without specific revenue sources attached to them, but said it is part of the overall back and forth of the process.

"We still have to have the process where we get budgets moving back and forth so we're done by Sept. 30," Dillon said. "I'm very comfortable with this. I think we're saying this is ideally what we'd hope to do in this environment. But if we have a revenue shortage, we're going to have to look at paring some of them back."

Senate Democrats criticized Republicans because their budgets instead of proposing all the cuts also tell the departments to find some savings on their own.

"It's silly to make budget cuts without even knowing where the cuts are going to come from," said Sen. Deborah Cherry, D-Burton.

But Bishop said: "It's makes no sense for us to lead with the idea that we're going to raise taxes and then fill in the budget thereafter."

Senators also sparred over a GOP plan to privatize more of Michigan's foster care, adoption and juvenile justice systems and whether a new border crossing over the Detroit River should be public or private.

The Democrat-led House passed budget bills for K-12 schools late Wednesday. But final passage of bills for universities and community colleges stalled early Thursday, although the House remained in session as of 4:30 a.m. Republicans said the delay was over a behind-the-scenes dispute about their amendments that would block schools from offering benefits to unmarried partners of college employees and prevent illegal immigrants from getting tuition breaks.

The House version of the K-12 bill would add a minimum of $100 per pupil to school budgets, which is less than the $178 more proposed by Granholm. But the House version would boost funding for districts funded at relatively low levels and would boost money for schools in rural areas with higher busing costs so some districts would come out ahead. Overall, the House's school aid budget would be about $13.3 billion about 2.3 percent more than this year.

One House plan would split university funding into two separate bills.

The first would cover the University of Michigan, Wayne State University and Michigan State University, the state's three large research and medical school universities. The other would cover the state's 12 smaller universities, a move that angers many of the smaller schools because they feel it sets a bad precedent for treating them differently.

The House plan would give all universities a base increase of 2.5 percent for next fiscal year, plus the repayment of a delayed payment from the current fiscal year. It also would provide another 2.5 percent increase an extra $36 million based on the use of federal Pell grants and the type of degrees the universities award.

More weight would be given to schools with a high rate of math, science and engineering degrees and schools that do a lot of research.

Lawmakers from both parties were sharply divided on whether the universities should be funded in two separate bills. Republicans also questioned the higher spending.

House Republicans said Democrats were on pace to spend $2 billion more than the state would have available next fiscal year, including about $500 million more than will be available for K-12 schools.

During debate on the K-12 schools budget, House Minority Leader Craig DeRoche, R-Novi, proposed a tongue-in-cheek amendment to raise school funding by $1 trillion. He said passing bills that would require large tax increases especially ones that haven't been approved showed "zero respect for people who pay taxes."

Associated Press reporter Tim Martin contributed to this report.

Some of the budget bills are Senate Bills 222, 229, 231-35 and 238-40 and House Bills 4360, 4359, 4346, 4350 and 4351.

On the Net:

Michigan Legislature: http://www.legislature.mi.gov