No layoffs from federal budget cuts

By David Eggert
Associated Press

LANSING, Mich. (AP) — Automatic federal budget cuts will cost Michigan $150 million in funding for programs such as special education and a clothing allowance for needy kids, but none of state government’s 48,000 employees will lose their jobs, the state announced Monday.

About $20 billion, or 42 percent, of the state’s $48 billion budget comes from federal funds — a concern for state officials ever since the automatic spending reductions began taking effect more than six weeks ago.

Gov. Rick Snyder’s administration said the most significant direct cut is to a program that will not be able to provide about $137 at the start of the school year to each of 21,000 children living with relatives after being removed from their home.

“These kids are already having a really tough time. The amount of money may not sound like a lot to a lot of people, but it can mean a winter coat and boots and backpack,” said Karen Holcomb-Merrill, policy director for the Michigan League for Public Policy.

About $59 million in spending cuts are expected in the state budget that ends Sept. 30. Another $91 million in reductions are scheduled in the budget starting Oct. 1.

The state budget office said the cuts represent less than four-tenths of 1 percent of the Michigan budget. Snyder does not intend to offset any of the lost federal money with state funds.

“We support getting the nation’s fiscal house in order, though across-the-board cuts like this one are not the way to go about it,” the Republican governor said in a statement.

More than one-third of the cuts will be to education. Federal dollars pay for special education services, Title I funds that go to schools with more students in poverty, after-school programs, and career and technical education.

The majority of cuts will be in the form of reduced grants or contracts to local entities. The bigger cuts will be in the state’s economic-development fund and the Department of Community Health.
Budget director John Nixon said schools will have to adjust their budgets this summer in time for the start of the academic year. He said Michigan is in a good position to manage the cuts because of tough budget-balancing moves made when Snyder took office, though Democrats have complained that Republicans are not spending enough on K-12 schools.

“The past groundwork we’ve laid for fiscal responsibility makes Michigan well positioned to adjust and keep moving forward,” Nixon said.