Education take backs possible

MARQUETTE - School districts, universities and local governments that received more state money this year probably will have to give back some or all of that increase, Senate Fiscal Agency Director Gary Olson said Thursday.

"We're beginning to feel that could be happening," said Jon Hartwig, superintendent of the Marquette schools. "Our strategy, if at all possible, is to absorb the loss and not lay off employees."

However, he added that depending on the amount of funding reduction by the state, the district will have to consider all options. Marquette schools received a $112 increase in its per-pupil funding for 2008-09, bringing the per-pupil total to $7,316.

Northern Michigan University officials are also discussing the possibility of a state funding cut. NMU received a 1 percent increase this year.

"We haven't received any official word yet, but looking at the state budget ... we keep monitoring things," said Gavin Leach, NMU vice president for finance and administration. "We're reviewing our budget."

Leach said it hasn't been determined whether tuition will be increased or what types of cuts may occur at the university if an executive order is issued by Gov. Jennifer Granholm.

Olson has been telling state senators to expect a $450 million to $900 million revenue shortfall in the current budget year, which started last month. He said some of the deficit will be covered by around $400 million carried over from the previous fiscal year, and added that $650 million could come to Michigan from a stimulus package Congress is expected to pass after Barack Obama becomes president in January.

But Olson said the state can't rely on those one-time fixes and has to make cuts or raise taxes this year to avoid dealing with a ''massive hole'' in the fiscal 2010 budget. The state's fiscal year runs from Oct. 1 through Sept. 30.

''We may have to cut '09 to carry over a surplus to 2010 to be responsible,'' he said.

Universities, community colleges, K-12 school districts, job training programs and local governments set to get higher state payments this year ''should be worried,'' he said.

Olson said the next budget year likely will be worse.

''We're going to have to make some pretty significant cuts if we don't have tax increases,'' he warned. ''It's not going to be easy.''

Michigan lawmakers last year raised the state income tax rate and placed a surcharge on business taxes in a bid to stop the recurrent revenue shortfalls caused by earlier tax cuts and the state's sluggish economy.

But the national recession could thrust the state back into an acrimonious battle over how to balance its budget this year as revenues shrink because of lost jobs and constricting consumer spending. Last year's action didn't come until after the state government shut down for several hours as lawmakers scrambled to reach an agreement.