|
Governor Snyder Unveils Budget Plan
Governor Rick Snyder unveiled his first executive budget proposal for Fiscal Year 2012 and also for 2013. This budget reflects the Governor's goal to set a two-year budget that will bring state spending under control without the need for one-time funding fixes. The budget proposal also creates a tax system the Governor called "simple, fair and efficient" for businesses and Michigan residents.
Snyder, Lieutenant Governor Brian Calley and State Budget Director John Nixon outlined the recommendation to a joint session of the House and Senate appropriations, finance and tax
policy committees on Thursday.
As part of the efforts to reform Michigan government, the Governor also announced he will only take a $1 salary in 2011. The combination of reforms and spending cuts closes a $1.8 billion shortfall for FY 2012.
The Snyder plan centers on major restructuring of Michigan's taxes, starting with the elimination of the Michigan Business Tax (MBT). The MBT would be replaced by a flat rate Corporate Income Tax set at 6%. The Governor's plan also reduces the individual income tax rate from 4.35% to 4.25%. In addition, the income tax base would be broadened to include earnings on private and public pensions. All business tax credits would be eliminated completely, with only existing credits continuing until they expire. All credits and deductions for the individual income tax would also be eliminated (including the Earned Income Tax Credit), except for the personal exemption, homestead property tax credit, and other "minor subtractions." The Michigan Department of Community Health (MDCH) would receive total funding around $14 billion, of this total $2.7 billion would come from GF/GP dollars. This figure would slightly increase in the FY 2013 projection to $14.4 billion ($2.9 billion GF/GP). The Governor's recommendations include $9.7 billion for medical services ($1.2 billion GF/GP) and $2.2 billion ($388.5 million GF/GP) for long term care program portion of Medicaid. This would be a 1% reduction from current FY 2011 levels. The Governor noted that his plan would maintain Medicaid eligibility and provider reimbursement rates would be supported without any reductions. Mental health services would be funded at $3 billion ($1.2 billion GF/GP) of that $2.7 billion ($1.1 million GF/GP) would provide community mental health services. As part of his plan for MDCH, the Governor also calls for a health insurance claims tax of 1% to be applied to all health insurers in Michigan. This would raise $400 million in revenue and replace the existing tax on Medicaid HMOs. It is clear that without agreement on the new claims tax, the hope of Medicaid eligibility and reimbursement rates remaining unscathed could easily evaporate. Teasing out how the Governor's proposed budget impacts maternal and child health specifically is a bit of a task with line items rolled together in many instances and no explanation given for what appear to be economic adjustments with the vast majority of MCH lines decreasing, or in some cases - surprisingly - increasing, slightly. A first glance at some of the more substantial proposals: - $300,000 reduction to the pregnancy prevention line ($5 million+ in 2008 will now be $1.3 million) - $1.7 million (5 percent) reduction to local public health essential services line - $11 million ($3.7 million in state general fund) savings assumed by moving Childrens' Special Health Care Services non-Title V eligible populations into managed care - $3 million cut to hospital disproportionate share payments - $22 million, almost 40 percent, reduction in graduate medical education payments The presentation today has already gotten a lot of attention and will be receiving much more. We will keep you updated on how all of the line items that intersect with maternal and child health fare as the budget moves through the legislative process. And, as always, we will share how you can advocate for adequate resources to support the well being of women, children and families.
The governor's recommended budget and related material are available online at www.michigan.gov/budget.
____________________________________________________________________________________
| 
