A Playbook for Budget Drama

By John Bebow | Published: September 14, 2007

Things to keep in mind as legislators shuffle toward the October 1 deadline:

Likely options to break the short-term impasse — Detroit Free Press

Implications of failing to reach a quick solution — House Fiscal Agency

Details of a cuts-alone approach — Senate Fiscal Agency

Three Principles to Transform Michigan — endorsed by more than 100 statewide leaders

Reforms Before Taxes — solutions proposed by bipartisan leaders & The Center

Challenge Yet To Come — There’s little focus on the $10 billion long-term headache

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Doug Drake

Posted September 14, 2007 at 3:04 pm | Permalink

John, re your last point on the mass willingness to ignore long-term issues:some of the cuts only/reforms, such as the Senate passed early-out will dramatically increase the unfunded costs for pensions and retiree health care–on the order of $1 billion or more. In addition, the Senate numbers assumed that all of the eligibles leave October 1, which will be tough to do since the bill hasn’t passed both houses, so the “savings” number is overstated, plus losing some of these employees and not replacing them may have impacts on things like federal matching funds requirements and the troublesome little issue of who’s going to watch the inmates that no one wants to release. In addition, since the Senate proposed cuts were only presented at a conceptual level, and never adopted in detail, we don’t really know the full impact of cuts on services and things like federal matching rates..we could end up losing lots of federal dollars in addition to the state cuts. It will be tough to come out of the last minute crisis with a good balanced plan.