Governor's Budget Proposal Spares Some Programs While Making Harsh Cuts in Others

On February 17, 2011, Governor Rick Snyder shared his proposed appropriations plan for the state for FY 2012 and for 2013. Governor Snyder suggested that the two year plan would allow for better long term planning and urged the legislature to pass the FY 2012 budget by May 31st, far earlier than the legislature has been able to agree upon a budget in recent years. Unlike previous budgets, Governor Snyder divided all state functions into six budget line items, thus preserving maximum flexibility for his Department heads to use funds as they see fit. Legislators, however, are likely to object to giving the Administration so much discretion and may insist on greater control and oversight of state spending.

Some programs of particular concern to older Michiganians fared well while others took significant hits. For example,

• The Office of Services for the Aging is targeted for another $2.2 million in cuts, on top of $10 million reductions in funding since FY 2009. The reductions would be in community services, nutrition, and senior volunteer programs including the Foster Grandparent Program and RSVP.
• No cuts are recommended in Medicaid eligibility, optional services continue to be funded and provider rates are not reduced.
• In the long term care arena, nursing homes are slated for a slight increase in funding. The MI Choice Waiver program is to be funded at current levels. But the very cost-effective and important Home Help program which provides chore services for very low income older people and people with disabilities faces significant and harmful cuts. Under the proposal, individuals who require assistance with activities of daily living (bathing, toileting, dressing, etc.) will be able to continue to receive those services as well as help with instrumental activities of daily living such as shopping, meal preparation, laundry, and cleaning. However, individuals who need assistance only with instrumental activities of daily living will be terminated from the program. Moreover, funding for the Michigan Quality Community Care Council, an organization that helps match Home Help consumers with appropriate providers, will be eliminated.
• The Governor proposed eliminating the Earned Income Tax Credit which benefits many low wage workers including thousands of individuals in the long term care industry.
• The Governor proposed raising revenues by taxing public and private pensions. Currently, Michigan’s tax policies are especially generous to retirees and the Governor alleges it has been one of only three states that have exempted most or all pension income from taxation. The Governor’s proposal will not tax Social Security benefits, however.
• Elderly people and people with disabilities who are eligible for both Medicare and Medicaid are to be “integrated into a managed care service delivery model” which the Governor estimates will save $30 million in FY 2012.

Another significant concern for low income families is the Governor’s proposal to impose a 48 month lifetime limit for Family Independence Program recipients. The complete budget proposal and supporting documents are available at http://michigan.gov/budget.