Lawmakers are breaking into their study groups to go over the budget. After the freshmen were instructed to "drop and give me twenty!", some interesting hypotheticals were passed out by the Senate Fiscal Agency for them to chew on.
The latest Senate Fiscal Agency memo is intended to provide an outline of options that could be considered to balance the budget. It provides several examples of possible spending cuts totaling $1.3 billion, more than would be needed to balance the budget.
For the most part, the listing works off a hypothetical 10 percent cut in state departments starting April 1. That could translate to the loss of a few thousand state employees, a number that would vary widely depending on the cuts chosen.
Some examples:
-A 10 percent cut in the state's corrections department would amount to about $190 million. Such a cut could include closing 12 prisons and four prison camps, the elimination of several prisoner education and substance abuse treatment programs, and other cuts.
Yes, let's turn the criminals loose without the tools they need to leave that lucrative life of crime, almost guaranteeing they they will make a return visit to the system. Although, down below we are talking about cutting the cops, so maybe they won't get caught the next time around.
-A 10 percent cut in community health would equal $294 million. A cut of that size could affect several programs including those paid for through the Healthy Michigan Fund, elimination of optional Medicaid services such as adult dental care, and reduction of Medicaid reimbursement payments to some hospitals.
These folks will show up in the emergency rooms and other places, which will raise insurance costs, which will push more people to drop their insurance, which will send them to the emergency rooms when they need help... and the cycle continues. Hospitals will find a way to recoup any loss in Medicaid reimbursements, probably through higher charges to- ta da!- insurance companies, who will promptly raise your rates.
Bottom line- pay a little now on preventive care, or pay a lot later for emergency care. Cutting any kind of health care seems to exacerbate an already huge problem.
-A 10 percent cut to state police amounts to nearly $25 million. That would eliminate a trooper training school planned for this fiscal year, and would include the layoffs of 24 troopers already on the road, along with several other cuts.
This would probably alleviate the prison problem. Just don't call 911. Or get in an accident.
Things are not this black and white, of course, but these are just some examples where cuts can actually end up costing us more in the long run.
Lawmakers will look at raising revenue also, causing many Republicans to poke their eyes out with their pencils. Might have to take all the sharp objects away from them.
Raising the existing sales tax by 1 percentage point, to 7 percent, could raise $690 million this fiscal year and $1.4 billion for the fiscal year that starts Oct. 1.
Expanding Michigan's 6 percent sales tax to services could raise nearly $4.4 billion in the last six months of the current fiscal year, and another $9 billion in 2007-08 fiscal year that begins Oct. 1.
Raising the state's beer tax to $7.30 a barrel; an increase of $1 per barrel; would raise an estimated $3.5 million this fiscal year and $6.9 million next fiscal year.
Again, things there aren't that easily defined, either. A combination of both is going to be required in the end.
It seems that tackling the SBT replacement would have to come first- if we adjust that revenue we might solve some of the problems above, yes? At least for the future- get through some cuts now and reinstate when the revenue becomes available.
Mike Sak and Glenn Steil Jr. were on WXMI last night; unfortunately they don't have the clip on their site. Sak mentioned looking at the service taxes. Steil, a wingnut's wingnut, could only say "cutcutcut" in his usual hyperactive "I Really Hate the Government and Want To See It Die" way. Makes you wonder why he got in the business in the first place. The Steil types are the ones we need to watch.
Good luck everyone. I don't envy you a bit.