It's Their Future; It's Our Responsibility!
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| Talking Points |
On Thursday, February 11, 2010, Governor Granholm released her proposed state budget for the upcoming fiscal year (2011).
Overall Budget:
- The total FY11 budget is recommended at $47.1 billion, a $1.85 billion or 4.1% increase from the current year
- The General Fund (GF) is recommended at $7.87 billion, a $258 million or 3.2% decrease from the current year
- The School Aid Fund (SAF) budget is recommended at $12.86 billion, a $400,000 or less than 1% increase from the current year
- The Governor's budget estimated the combined GF and SAF FY11 shortfall at $1.5 billion
- This is a result of declining revenues and additional spending pressures
- The proposed budget addresses this projected deficit through a combination of budget cuts, tax cuts/reforms and governmental reforms
Specific Details Affecting Young Children:
- Maintains $107 million of funding for early childhood programs in the School Aid budget
- Maintains $14.6 million of funding for the Early Childhood Investment Corporation which includes child care quality
- Maintains $3.8 million of funding to the Zero to Three Secondary Prevention Initiative, which provides services to families who may be at risk of having a child removed from the home
- Lowers the amount available for subsidy payments to low income working parents $238.8 million in 2010 to $223 million
- Lowers funding for Public Health Department immunizations programs
- Elimination of funding ($1 million) for the Child Care Enhancement Program (CCEP) (formerly known as the Child Care Expulsion Program).
- Please note that in Oakland County our CCEP Program (Project STAR) is funded through a combination of Oakland Schools general fund, United Way grant funding, and Children's Mental Health Block Grant dollars and would not be affected by this cut.
Early childhood advocates worry that while the budget supports many early childhood initiatives, it also relies on many potentially controversial revenues and reforms that may prove difficult for the Legislature to pass in an election year. These include:
General Fund
- $98 million in pension reforms, including an expectation that 6300 employees will retire
- $18 million by eliminating the 3% salary increase due in FY11 to nonunion employees
- $133 million from a physician tax that would also increase Medicaid reimbursement rates by 80%
- $140 million in corrections reforms that will decrease prison population
- $39 million in Higher Education resulting from the elimination of the Tuition Grant Program
School Aid Fund
- To cover the $410 million shortfall in the School Aid Fund, the budget recommends
- Lowering the existing sales and use tax rates from 6% to 5.5% while expanding the sales and use tax to consumer services
- The elimination of the Michigan Business Tax by cutting it in half in 2011 and phasing it out completely in 2012
- Changes in retirement and health care benefits for school employees
For the full budget click here.
For an in depth analysis of key areas related to early childhood, view Michigan Children's Budget Basics.
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Further Information
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The Governor's budget proposal is only the beginning of the state budget process. Both the House and Senate are now preparing their budgets which are often quite different. This provides an opportunity for early childhood advocates to have their say on the state's spending priorities. Contact your representatives TODAY and remind them that early childhood investment is a smart investment.
To understand more about Michigan's Budget Process, click here.
House email addresses can be found at http://house.michigan.gov/find_a_rep.asp
Senate email addresses can be found at http://senate.michigan.gov
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