Newsfeed
Printer-Friendly ModeCuts will only deepen state's economic crisis
March 26, 2007 —
Last Thursday, Governor Jennifer Granholm issued an executive order cutting approximately $345 million from the state budget, most of which was cut from the general fund, the state's primary resource pool.
$345 million is a lot of money. For comparison's sake, SVSU's entire budget for the fiscal year 2006-2007 is around $79 million. So, with one fell blow of the pen, Granholm just cut around four SVSUs worth of money from the state budget - four public universities, gone.
But here's the kicker: according to a press release issued from the governor's office, the $345 million cut represents about 10 percent of the $3 billion budgetary shortfall.
About $1.5 billion should be replaced by a tax on gross receipts that Granholm proposed in February. However, that still leaves another $1.2 billion unaccounted for, of which $942 million is general fund. So the question is, are Michigan's citizens prepared to endure over a billion more dollars in cuts? Again, for comparison's sake, imagine having to decide how to go about eliminating 15 SVSUs.
Print and broadcast media alike barrage the public with news of Lansing's budget problems, and understandably, you might be sick of reading and hearing about it. But the crisis is indeed real: beyond the hyperbole, there exists a serious threat to the long-term health of Michigan's economy, and it affects you, as a part of that economy.
The once-deafening wannabe free-marketeers in Lansing are now ominously quiet.
Why?
Because it is now quite apparent that while budget cuts have indeed made the business climate in Michigan much more hospitable, they can do no more.
Empty rhetoric about halting government spending and eliminating waste and bureaucracy won votes - for those who choose such a platform, shame on you - but it cannot and will not do anything from this point forward to help rectify a potentially catastrophic situation.
The executive order cut spending from the following programs, among others: cash assistance payments, indigent burial, economic development job training grants, and transportation funds for bus capital and rail passenger services.
None of these programs are unworthy of state funding - the word "wasteful" is the last thing that comes to mind when thinking of economic development job training grants - but were all axed as part of Granholm's attempts to get the state back in the black, or at least the light red.
If this hasn't hit home already, consider the following: the state needs to make up for $942 million of the general fund. Of that, $377 million is earmarked for Michigan's schools, properly called the School Aid Fund. Is this making sense now?
Last year, tuition climbed 4.9 percent. The year before that, 7.5. Say 'no' to more cuts, or you should expect more of the same.