House GOP caucus unveils budget plan

LANSING — The House Republican Caucus unveiled its state budget proposal Tuesday morning, a plan they claim will close the state’s budget deficit of $1.8 billion without any new revenue streams.

But organized labor called the proposals part of a program to “race to the bottom,” and an attack on collective bargaining powers.

“Look folks, there are no easy solutions today to the budget problems that face Michigan,” said Kevin Elsenheimer, House Minority Leader. “Lawmakers frankly must learn to say no and this is the caucus that is going to be ready and willing to do just that.”

The proposal outlined by the GOP envisions over $664.8 million in cuts to various state departments, $149 million in reforms from various agencies, and achieves an $18.50 per pupil foundation allowance increase in K-12 funding by eliminating funding from the categoricals areas in the state’s K-12 budget.

Categoricals are line items appropriated to fund specific K-12 programs in the state and are funded separately from the foundation allowance. The GOP plan would eliminate nearly all of them, including all funding for adult and vocational education programs, math and science centers, bus driver safety programs and at-risk programs.

The proposal would also eliminate 10 percent of the revenue sharing with counties and local municipalities, most of which goes to fund police and fire protection in local communities.

Among the specific plans in relation to cuts, Republicans say they will fight to repeal a planned three percent pay raise for state workers. That, they say, would save the state $53 million.

“We are going to assume general fund savings by denying and rescinding the three percent employee raise,” said Rep. Chuck Moss (R-Birmingham). “I can’t think of anything more almost comically offensive than to give our state employees a raise when people are losing their jobs and taking pay cuts being foreclosed and losing their houses.”

Mark Gaffney, president of the Michigan AFL-CIO, said the plan was out of line. He said the state has “tens of thousands” of contracts, and is not seeking reductions in those payments. Asking those contractors to give back five percent, Gaffney said, would “fill the budget hole.”

“So, you know what? If you are going to honor everybody else’s contracts, honor employees contracts,” Gaffney said. “[State employees] gave insurance concessions and they gave wage concessions to get that three percent. It’s part of a three year agreement. Nobody ever says rescind the three percent even though it was part of a three year agreement that included insurance concessions, a zero percent wage increase in two years, and a one percent increase last year. Nobody ever gets the rest of that sentence in there. So it’s wrong.”

“It’s an attack on collective bargaining because the place to make those concessions is at the table,” said Ray Holman, legislative liaison for UAW Local 6000. The union on Friday ratified concessions agreements with the Granholm administration. Those concessions Holman said equaled $16 million in savings.

“That three percent raise was not part of the mix,” said Holman of the negotiations just completed.

Holman said state employees have given the state more than $3.7 billion in concessions since 2001, including pay cuts, lay-offs and unpaid furlough days. He said the state has also cut the work force by 11,000 workers.

To fix the budget issues, Holman and other labor leaders argued at a Tuesday morning rally at the Capitol that the state needed to revisit its tax structure, evaluate corporate tax breaks and audit contracts between the state and contractors.

Republicans also proposed cutting state revenue sharing 10 percent for counties and municipalities. That money funds county programs like health inspections and law enforcement.

In announcing the proposal, Moss, the lawmaker from Birmingham said, “I come out of the counties and that makes me cry. But it’s gonna have to happen.”

“We’re obviously not very happy with that proposal however there is a silver lining in there,” says Tom Hickson, director of the Michigan Association of Counties. “That House Republican solution does not factor in the [federal Medicaid] funding. If that passes, and I have been assured it will, those cuts are null and void.”

But Moss hedged that bet in the morning press conference, saying if that money comes through, revenue sharing “may” be where that cash is redirected.

If, however, the cuts are allowed to stand, Hickson says the results will be troubling.

“It would be bad,” said Hickson. “You are going to see all kinds of things people take for granted cut across the state.”

He said what little cash the counties will have will be funneled into mandated services, such as health inspections and law enforcement and away from programs the state has not deemed necessary. He cited the example of animal control agencies.

On the up side, the GOP says its plan will invest cash resources into transportation funding — that in turn, they argue, will allow the state to leverage additional federal transportation dollars to do road construction projects. In order to do that, the Republicans propose shifting cash from the mass transit money pool into the transportation pool.

Democrats have proposed an increase to the state’s gas tax to leverage that needed money.