More Details of Michigan Governor’s Budget Proposal

Details of Michigan Gov. Rick Snyder's $47 billion budget proposal, which he outlined to The Associated Press on Wednesday: — Drops the individual income tax rate from 4.35 percent to 4.25 percent on Oct. 1; the tax will then remain at 4.25 percent rather than being decreased to 3.9 percent in future years as scheduled. — Eliminates the state income tax exemption for pensions, but Social Security benefits will continue to be exempt. — Eliminates the Michigan Business Tax and replaces it with a flat 6 percent corporate income tax on major corporations. — Eliminates business credits awarded for films, brownfield redevelopment, the Michigan Economic Growth Authority, etc., although current commitments will be honored. Sets aside $25 million for film credits from the 21st Century Jobs Fund. — Rolls funding for universities and community colleges from the general fund to the school aid fund, the main funding source for K-12 schools. — Cuts per pupil funds $300, in addition to the currently budged $170 per pupil reduction. — Eliminates statutory revenue sharing payments for cities, villages and townships in FY 2012, leading to a net savings of $92.1 million. The change impacts 509 local units of government. Increases constitutional revenue sharing by 4 percent, to $659 million. — Includes $200 million for a new incentive-based revenue sharing program for cities, villages and townships that meet specific standards to be detailed in March. — Sets a lifetime limit of 48 months for residents to receive welfare payments, with exemptions for incapacity and hardship. — Closes the Shawono Center in Grayling, and cuts 20 beds in capacity at the Maxey Training School in Whitmore Lake, resulting in $787,000 general fund savings. — Eliminates 300 field worker positions in the Department of Human Services. — Closes one prison to be named later this year. — Reduces the number of Michigan State Police posts, saving $3.2 million. — Reduces state aid to libraries in the Department of Education budget by $2.3 million in the general fund, with $950,000 directed to the Michigan eLibrary, resulting in net savings of $1.4 million. — Suggests privatizing food service and prison stores operations in Michigan prisons, and suggests that resident care aide services at the Grand Rapids Veterans' Home be competitively bid. — Turns the dairy farm inspection program over to industry field representatives certified by the Department of Agriculture. (Copyright 2011 by The Associated Press. All Rights Reserved.)