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State police, health care see losses

May 6, 2009
By Journal Staff and The Associated Press

LANSING - Legislators reluctantly agreed Tuesday to eliminate 100 state troopers, force state workers to take unpaid days off and slash spending for Medicaid health care providers and city services.

Gov. Jennifer Granholm's executive order cuts $349 million from the current state budget. Of that, $304 million will be cut from the general fund, the state's main checkbook that is running nearly $2 billion behind where it was last year.

Among the cuts' effects locally are Michigan State Police trooper layoffs, reductions in Medicaid reimbursements to health care providers, local revenue sharing losses, and a chunk out of the D.J. Jacobetti Home for Veterans' budget.

Article Photos

House sergeants turn back a large group from the State Police Troopers Association — citing the fire marshal's occupancy limit — before state Budget Director Bob Emerson presented Gov. Jennifer Granholm's executive order that cuts more money out of the state budget, during a combined session of the House and Senate appropriations committees Tuesday at the Capitol in Lansing. (AP photo)

All departments are being asked to cut spending by 4 percent, although the state police budget is getting trimmed slightly less.

July 1 is the deadline for laying off 100 state troopers. No state police posts will be closed, but no troopers will be transferred. That means some posts will staff fewer shifts, police officials said. Specifics on the layoffs were unavailable this morning, but state police director Col. Peter Munoz said in a statement they will affect the most junior troopers, in accordance with union rules. Mileage restrictions also will return for troopers, who will be asked to limit miles driven on patrol unless responding to calls.

State police spokeswoman Shannon Akans said the agency is still confirming where the layoffs will take place, but 82 of the troopers would be the most recent trooper school graduates. Another 18 would be from the class previous to that, in 2004.

"Any of the posts from the U.P. that received the most recent recruits would be affected," Akans said.

Also being targeted for a reduction is the Michigan Department of Natural Resources law enforcement budget, which is in line for $82,300 in cuts.

About 200 state workers in departments other than the state police also will be laid off, state budget director Bob Emerson said. More could get the ax in the budget year that starts Oct. 1 if the state's economic troubles continue as expected.

The doctors, hospitals, nursing homes and others that treat Medicaid patients will see a 4 percent cut. They've warned that will force fewer services and further destabilize the state's health care industry.

Marquette General Health System may lose as much as $1.2 million annually due to the cut in Medicaid reimbursement.

"We're currently in the budget process and we're going to build this impact into the budget and tighten up," said Mary Tippett, MGHS communications director.

She added the $1.2 million is a rough calculation - on the high side - and hospital financial officers are waiting for more details from the state to determine a final number.

"Marquette General Hospital treats everyone who comes through our doors and that will not change due to the budget cut situation," Tippett said.

The state will save $16 million from health care cuts, but it also will lose about three times that much in federal matching dollars that go toward reimbursing those serving Medicaid patients.

The plan also includes $41 million in cuts to local governments, much of which is used to pay for police and fire protection. And it cuts money for community mental health boards that provide mental health and substance abuse treatment.

In Marquette County, county commissioners are planning a strategic meeting to discuss long-range finances, but are waiting to find out details of local effects.

County board Chairman Gerry Corkin said Tuesday that the ordered cuts will, out of necessity, mean fewer local services.

"It doesn't bode well for county services in many areas, as well as cities," Corkin said.

At the D.J. Jacobetti Home for Veterans in Marquette, a seemingly substantial $150,000 cut in general fund budget money will actually have no effect, according to Administrator Brad Slagle.

"We'll be able to replace that through federal funds," Slagle said.

Federal per diem funding is provided to the facility through the U.S. Department of Veterans Affairs, based on the number of residents at the veterans' home.

With occupancy at capacity and projected to remain the same, the anticipated federal funding should compensate for the state reduction, which amounts to about 3 percent of the $5 million the Jacobetti Home gets in general fund money each year. The facility's total annual budget is $15 million.

"As long as we can generate the federal funding, which I have no doubt we will be able to, this should have no effect," Slagle said.

Mayors, city managers and other local officials warned Tuesday that the executive order means deep cuts in law enforcement, water treatment, road repairs and other essential services. The state has cut $3 billion from revenue-sharing payments in the past eight years, according to the Michigan Municipal League.

''Communities with high crime, bad water and no parks are not places people want to call home and businesses want to locate,'' league President Dan Gilmartin said. ''It is time to stop the annual policy of making cuts that give the illusion of solving the problem but instead drive people and jobs out of Michigan.''

Emerson presented the order Tuesday to a joint session of the House and Senate appropriations committees, which approved the executive order early in the afternoon.

It will force most of the state's 53,000 state workers to take six unpaid days off, unless they're prison guards or the state police.

State universities and community colleges won't see decreases because cutting their state funds would cost the state about $1.6 billion in federal recovery money, Emerson said.

Legislative leaders and the Granholm administration have been scrambling to find a way to patch a budget shortfall that has grown to $1.3 billion in recent weeks as income and business taxes have come in lower than January forecasts predicted.

The state will tap about $1.1 billion in federal stimulus money to fill the revenue gap. Emerson said the Granholm administration had not planned to use all the federal money to fill the budget hole, but the state has no way to cut that much with only five months left in the budget year.

Most of the state's $44 billion state budget is locked into funding for roads, health care, and other programs that can't be cut, leaving only a relatively few programs, such as funds for cities, that can take the hit.

''Some would argue that we ought not to use the stimulus. But after meeting with members of the Legislature, I think this $304 million was as much as anyone could swallow'' in cuts to the $7.4 billion general fund, he said.

''Clearly there are cuts here that I took no pride in making, and you take no pride in voting for,'' Emerson added. ''The cuts here are devastating. ... (But) while these are harmful cuts, even tougher decisions are being made every day by your constituents.''

Emerson said he'd like to use the furlough days to shut down state government one day a week through the spring and summer to save money. Most union contracts allow the state to furlough employees for up to six days without reopening contracts, and talks are taking place with the unions to try to get everyone to take the same days off.

The state police and essential operations such as prisons wouldn't be shut down on furlough days. But corrections employees who aren't prison guards will be required to take the days off.

Emerson warned that more bad news could plunge the state into an even bigger hole. The state has seen a 21 percent drop in its general fund revenues this year over last, which could cost the state nearly $2 billion by the end of the fiscal year. But revenues could fall even farther if General Motors Corp. heads into bankruptcy as Chrysler LLC did last week.

''There is not much good news going on in the state of Michigan right now,'' Emerson said.

Lawmakers asked if another executive order will be necessary after the May 15 revenue estimating conference, since revenues are likely to keep falling. Emerson said he hopes that won't be needed - but he knows GM's troubles could throw those hopes out the window.

Some lawmakers said they'd like to restore at least a portion of the jobs, services and payments cut in the executive order when the next budget year starts Oct. 1. But Emerson warned that may not be possible if the state continues to take in far less in revenue because of the poor economy. Sales, income, business, real estate, casino and lottery tax revenues all are down.

The state's economy shows no signs of a turnaround anytime soon. The 346,000 motor vehicle transportation jobs Michigan had in 2000 dwindled to 172,000 last year. Emerson said he expects the automotive sector will employ only 82,000 workers next year, leaving a gaping hole in the state's economic fabric.

Senate Appropriations Committee Chairman Ron Jelinek, R-Three Oaks, was one of 16 committee members who voted for the cuts. He said everyone ''had to bite the bullet and do the tough vote.''

But Democratic Sens. Irma Clark-Coleman of Detroit and Martha Scott of Highland Park opposed the executive order. Clark-Coleman said the cuts will be devastating for the city of Detroit and the Detroit Medical Center, which treats a large number of the uninsured.

The House Appropriations Committee passed the executive order 27-4.



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