News (AP) - State lawmakers return to face budget deficits

By Tim Martin

Associated Press Writer

LANSING (AP) -- Michigan's state lawmakers ended a more than two-week summer break Wednesday and returned to the state Capitol, still unsure how they're going to solve the state's budget problems.

Democratic Gov. Jennifer Granholm appeared to be holding out hope that Congress will revive a measure that would give Michigan an estimated $560 million in additional federal money to help provide health care for the poor. The Medicaid measure appeared to be dead in the U.S. Senate, but Democrats say they haven't given up the fight for the legislation that would assist Michigan and several other states with budget problems.

Meanwhile, Republicans who run the Michigan Senate were drawing up plans to make more budget cuts on the theory that the federal money isn't going to materialize. Lawmakers already have passed a budget bill that will preserve funding for public schools, but other programs covered by the state's general fund -- including universities, health care and tax revenue-sharing payments made to local governments -- could face further cuts.

"Every cut so far that we've proposed is going to be deeper," Republican Senate Majority Leader Mike Bishop said Wednesday. "That's about as specific as I can be right now."

The Michigan Senate already has voted to erase a projected shortfall of $1.3 billion in the state's general fund through spending cuts and savings in the fiscal year that starts Oct. 1, but Democrats who control the House oppose many of those measures.

Lawmakers also have a shortfall of roughly $300 million to resolve for the current budget year. Michigan's constitution requires that the state government operate with a balanced budget, which has become more difficult in recent years as the poor economy has sapped state tax revenues.

Democrats are hopeful the logjam in the U.S. Senate that has held up federal funding for states may soon be cleared. The Senate voted Wednesday evening to extend unemployment benefits. President Barack Obama was poised to sign the unemployment measure into law after a final House vote Thursday.

Under best-case scenarios, unemployed people who have been denied jobless benefits because of a partisan Senate standoff over renewing them can expect retroactive payments as early as next week in some states. In other states, it will take longer.

Democrats hope once the unemployment benefits package passes through both chambers, they can rally to get the state aid package that includes Medicaid money approved as well.

"Once that is decided, I think the landscape will be clearer about which path to take," Granholm said Wednesday.

Published: Fri, Jul 23, 2010


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