Agema bill would virtually eliminate state HIV funding

LANSING — Interviews and budget documents provided to Michigan Messenger show that a proposal by a Republican lawmaker to eliminate a dedicated health fund in Michigan’s budget would, contrary to his public proclamations, effectively gut HIV programs in the state.

As Michigan Messenger reported last week, Rep. Dave Agema (R-Grandville) has introduced legislation to eliminate the Michigan Health Fund Initiative and shift the $9 million from the fund over to the Michigan Aeronautics Fund.

Agema has defended the proposal saying that the money was “almost like double-dipping” and telling the Grand Rapids Press:

“It’s not eliminating AIDS funding,” Agema said Tuesday. “It eliminates that particular fund that is duplicated elsewhere.”

Information provided by the Michigan Department of Community Health and gathered by the Kaiser Family Foundation contradicts Agema’s claims.

Agema released a document he says was from the MDCH and shows that the fund pays out $4,231,685.33 on HIV related programming.

MDCH’s acting spokesperson Kelly Niebel says the state pays $5,497,998 total for HIV related programming. That means that 77 percent of Michigan’s contribution to HIV expenses is drawn from the MHFI. In other words, eight percent of Michigan’s total $54,501,904 million budget comes from the MHFI. The federal contribution to Michigan’s HIV funding is $49,003,906. An additional $1,266,302.67 in state money is spent on HIV. All this money pays for various HIV programs including prevention, testing, counseling, epidemiology, care and training, and education for doctors and other health care providers.

The Kaiser Foundation looks at funding in 2009, while the funds being identified by both MDCH and Agema represent funding from Oct. 1 2010, to Sept. 17, 2010. The state’s budget year runs from Oct. 1 to Sept. 30.

In addition the fund also pays for the Building Healthy Michigan Communities program, which pays for anti-smoking programs, obesity education as well as heart disease, kidney disease and diabetes funds, Niebel said.

A 2009 report from the department shows that in 2008 those prevention programs touched 1.2 million residents of the state, and connected 23 local health departments to funding streams. More recent expenditures are not currently available online.

This spending is directly in line with Republican Gov. Rick Snyder’s State of the State address Wednesday. During that speech, Snyder declared that Michigan must “build a system that encourages all of us to have an annual physical, reduces obesity and smoking in our state.”

He also said the state has to encourage more preventative care, increase prenatal care and increase the number of available doctors available in the state.

“MHFI funds complement federal funding in provision of comprehensive STD services. This includes staffing, STD medications and surveillance, as well as STD prevention and education interventions,” Niebel said in an email to Michigan Messenger. “Federal funding allows for a very limited purchase of medications to treat STDs, and the bulk of medication is purchased with MHFI funds.”

Public health authorities on a county level have already said that earlier budget cuts under Democratic Gov. Jennifer Granholm had contributed to syphilis outbreaks in the state.

In addition to the HIV and STI funding, and other chronic health issues, Niebel says the state uses the MHFI funds to draw down federal dollars for violence prevention programs.

“The vast majority of funding for injury and violence prevention programming has come from the federal government,” Niebel said. “MHI funds directed at injury and violence prevention have leveraged federal dollars.”

Agema claims that there is “no better job creator” than shifting funds from the MHFI and into the MAF. But Niebel says the fund pays for 44 full time positions. Those positions include epidemiologists, laboratory assistants/scientists/technicians, microbiologists and other jobs. Without the state money, those positions would be eliminated.

The MHFI was created by law in 1978 and diverts a small portion of sales tax revenues into the fund.

The Michigan Aeronautics Fund was created in the 1950s and has not been changed since its passage. The fund is paid with a registration fee on airplanes of one cent per pound of the plane weight and with a dedicated three cent tax per gallon of airplane fuel.

The fund, however, included a tax refund which returns 1.5 cents per gallon of fuel purchased by airlines which are based in another state.

“If the airline is engaged in interstate travel it is eligible for that refund,” explained Rick Hammond, administrator for the Airports Division of the Michigan Department of Transportation.

The Michigan Aeronautic Fund, Hammond said, currently has a fund balance of $22 million, but $15 million of that is already “encumbered,” or as he explained, “spent.” Those funds are dedicated to projects that are underway.

Hammond says the state will refund about $2.5 million to airlines this year in fuel taxes.

“About $6.8 million is unencumbered, and that’s what we have available,” says Hammond. “That’s what it costs to do business [for the department].”

He says when all the bills are paid — including salaries, electricity and other costs — about $2.5 million is left. That $2.5 million is used to leverage about $150 million per budget cycle.

Hammond says that airlines have threatened to cease operations in the state if the refund is cut, or to tanker fuel in from out of state and not buy fuel in Michigan.

He says he thinks cutting the refund would not negatively impact the airlines however.

“It depends on who you’re asking, but I don’t think it would be an incredible impact on airlines,” Hammond said. “But the airlines would say differently.”

With the state facing a project $1.8 billion budget deficit in the next fiscal year — and possibly a deficit as large as $3.2 billion if Republican lawmakers eliminate the state’s Michigan Business Tax and 22 percent surcharge — spending issues and priorities are going to be under significant scrutiny. Lawmakers in both chambers have already introduced legislation to eliminate the business tax, and Snyder added his voice of support for the move last Wednesday during his address. The GOP has vowed to pass a balanced budget without revenue increases.

“What Rep. Agema proposes is to kill a program that is keeping Michigan people healthy and alive and shift that money to one that gives $2.5 million in tax breaks to big out-of-state airline corporations,” said David Holtz, executive director of Progress Michigan. “This makes no sense for Republicans or anyone else. Why would Republicans promote a bill that takes money from a critically important preventative health care program when their governor says the state needs to do more health prevention? The Michigan Aeronautics Fund does important things for Michigan, but its tax subsidies hardly seems like economic gardening. This bill is a policy weed that ought to be pulled out by its roots and buried.”