Friday, October 23, 2009

News of the Day

Additional cuts proposed by the Governor

Late Thursday afternoon, Gov. Granholm announced in a news conference a proration cut of $127 per-pupil for this year. The cut is based on revenue estimates for the School Aid Fund (SAF) by the Department of Treasury.

This cut is in addition to the $165 per-student reduction in the K-12 Fiscal Year (FY) 2010 budget that Granholm signed Monday.

Current law requires that the Treasurer notify the Governor if the actual revenue collections are less than the estimated revenue on which the budget is based. In that case, the Governor is required to notify the Legislature that payments to school districts will be reduced on a per pupil basis in 30 days unless the Legislature adopts a solution to the revenue shortfall.

The Governor’s action simply underscores the huge budget deficit faced by Michigan that results from the billions of dollars of permanent, special interest tax cuts enacted when the economy was booming. These cuts are now exacerbating the effects of the economic downturn. Unless the legislature comes up with a fix to this structural deficit, the Governor has no choice but to reduce funding to schools and other units of government.

Schools are feeling the effects of the economic squeeze. Sales tax revenue, which continues to come in below projections, are a major source of school funding. About 70% of funding for the state’s 552 school districts and 232 public school academies comes from the state in the form of sales and property tax collections with a smaller amount from the state’s general fund.

The minimum state grant to schools would drop from $7,316 per pupil last fiscal year to $7,144. Spending per pupil would range from $77,144 to $12,271. Such cuts are difficult for schools to address, as they are already one-third of the way through their fiscal year.

The Governor is holding school funding meetings around the state

Governor Granholm is going around the state setting up meetings with the school community to generate support/pressure on the legislature to come up with more revenue and funding for schools. MEA staff and members, along with school administrators, school board members and parents, have been invited to participate in the discussion with the Governor. The meetings are being followed by press conferences.

A meeting was held in Livingston County Thursday and meetings are scheduled in Muskegon and Kent Counties on Friday. Representatives from the KCEA will be attending the Kent County meeting.

Dillon Health Care Plan – Prescription for Disaster
Hearing on 5345 Continues

Cindy Nayer, President and CEO of the Center for Health Value Innovation, testified that access and affordability of care for chronic diseases, prevention wellness and mental health is the core for insurance design needed to provide a healthy workforce for Michigan.

Dr. Mark Frederick, Co-Director of the Center for Value Based Insurance Design with the University of Michigan, contends that the question the committee should respond to is “how to restore health to health care on limited resources?” He also stated that the cost going in such direction may not be less, but there would be a greater return on the investment of good health.

Keith Bruhnsen, Assistant Director of Benefits & Manager of the Prescription Drug Program at the University of Michigan, testified to the pooling of the prescription program at the University, which is a self-insured, self-administered program. As to savings, he stated that it depends on the plan design.

Dan Gilmartin, Executive Director & CEO, and Samantha Jones Harkins, Legislative Associate for the Michigan Municipal League, offered a neutral position on HB 55345. They questioned the cost savings within the bill without cutting benefits.

The next hearing is scheduled for Thursday, October 29, 2009. MEA is scheduled to provide testimony.