STATE GOVERNMENT POCKETS STIMULUS FUNDS: House GOP leads charge on government reform

With a looming $1.3 billion current year budget shortfall, Michigan House Republicans called on Governor Granholm to consider more cost-saving government reforms as she issued an executive order that solves less than one quarter of the deficit.

"With a $1.3 billion budget deficit, the governor today addressed only a quarter of the crisis," said House Republican Leader Kevin Elsenheimer. "House Republicans fought -- and will continue to fight -- for more cost-saving government reforms. We will support the governor's executive order today, as it is at least a step in the right direction, but we need to go further and will continue working toward solutions to reform government."

House Republicans brought more than $500 million of specific, cost-saving measures and government reforms to the negotiating table. Republicans also previously called for a five-percent across-the-board reduction in state spending and freezing salaries to protect critical government services such as public safety, and today renewed their call for transparency of government spending.

Elsenheimer noted that had the entire state budget been available online and available for public review, it would have been easier to target specific cuts, instead of the punitive cuts proposed by the governor.

"State government must change to meet the economic realities we face," Elsenheimer said. "You can't expect anyone to believe that state government is operating as efficiently as possible, and that public safety is the only place left to cut. We've known for months that the state is spending far more than it is taking in, but for months the governor refused to act, and as a result, public safety will be put at risk."

The House GOP also expressed their disappointment in using the federal stimulus dollars to fill a budget hole rather than create jobs.

"The stimulus dollars are being used as a quick fix to stimulate government, leaving no money for jobs or investment in the economy," said Republican vice-chairman on Appropriations state Rep. Chuck Moss. "The stimulus dollars are supposed to be used to create jobs, not help government balance a budget. This type of shortsighted budgeting is exactly what landed our state in this mess in the first place. We need to do more to reduce spending and reform government so we can fix our economy and get our state back on track."

STOP THE BLEEDING: House GOP: Day of reckoning is here as state's budget shortfall grows; Drastic and immediate action needed.

With the state falling deeper into financial crisis, House Republicans today proposed a three-pronged solution for dealing with the approximate $1.32 billion deficit that includes substantial and attainable cuts and real government reforms to lessen Gov. Granholm's insistence that federal economic stimulus money be used to shore up the current-year fiscal budget.

House Republicans provided budget negotiators a substantial list of cuts and continue to work on additional budget-saving measures that will be brought to the negotiation table. In March, House Republicans were first to call on Granholm to make the necessary cuts and rein-in out-of-control state spending. The governor dismissed Republican calls for fiscal restraint, opting instead to wait for new consensus revenue estimates due out in mid-May (see attached release).

"This is not a perfect solution, but it is a realistic one given the dire circumstances Michigan currently faces," said House Republican Leader Kevin Elsenheimer, R-Kewadin. "We cannot wait another minute longer. At this point, there is no part of the state budget that can be spared.

"The only realistic way we are going to solve this crisis is with a mix of substantive budget cuts, real government reform and, unfortunately, acquiescing to Gov. Granholm's insistence that federal stimulus dollars now be used to fill current budget holes."

Added Rep. Chuck Moss, ranking Republican on the House Appropriations Committee: "At the rate we're going, we may actually beat one of the auto companies into bankruptcy. We need drastic, immediate steps to put our state back in order. We tried the game of tax increases, look where that got us. It chased away business, foreclosed more homes, unemployment hit 12.6 percent. And we still didn't get the promised reforms. The day of reckoning is now. "

"Clearly the governor and Democrat's plan from 2007 has failed," said state Rep. John Proos, R-St. Joseph. "We were promised that the largest tax increase in state history would solve the problem, but now we're left with a larger deficit and a much larger unemployment rate. History is repeating itself because nothing changed -- no reforms, no change in spending habits, and no change in budget deficits. We learned in 2007 that tax increases are not the answer. With the state of the economy and the national economy, we simply must spend less money."

House Republicans said state government's failure to bring its spending in line with economic realities overshadows the more important work of enacting reforms and policies that will put Michigan families back to work and attract business investment and good-paying jobs.

"For every hour of inaction, Michigan loses another 40 jobs," Elsenheimer said. "The solution is painfully apparent: we can no longer afford the size of our state government."

STATE BUDGET NUMBERS FAULTY: House GOP offers $400 million in cost-saving reforms, efforts blocked by House Democrats.

The House Republican caucus today voiced their opposition to a plan by House Democrats that will blast open state spending. The GOP pointed both to the projected deficit of $1.5 billion for Fiscal Year ’10, and the FY '09 deficit, which is growing at a rate of $25 million-a-week.

"This budget does not reflect the priorities of working families," said House Republican Leader Kevin Elsenheimer. "As the Democrats continue this spending spree, they are forgetting about these families who are losing their jobs and forced to choose between their personal needs and wants."

Elsenheimer said Democrats continue to spend $5 million more every working day than the state is taking in, and have failed to address this deficit or the $1.5 billion deficit for next year. They've proposed inflated budgets that spend far more than even the governor's high recommendations, and failing to take into account a possible bankruptcy by one of the Big Three.

“Even the Obamabucks can’t keep up with this level of spending,” said Republican Vice-Chair of Appropriations Chuck Moss. “The fact is that we are knowingly spending more money than we have, and the answer is simple – we need to reduce spending now, and reduce the budget now to reflect state realities, and stop budgeting with rose-colored glasses. There are many lawmakers who want to take the easy way out by using federal stimulus funds or new taxes to fill the budget hole, but the responsible path is to reform government immediately."

The House Republican caucus recently called for:

· An immediate special revenue estimating conference to deal with the crisis now, rather than waiting until the end of May;

· A 5-percent reduction in general fund spending for all state departments;

· An immediate freeze on a scheduled 1-percent pay raise for state employees this year and elimination of the 3-percent raise scheduled for 2010.

The caucus also offered $400 million in specific cost-saving measures in committee, all of which were blocked by the Democrat majority.

“It is Accounting 101 – you can’t spend more than you have,” said House Republican Floor Leader Dave Hildenbrand. “The House keeps spending like there is no tomorrow, but the numbers aren’t adding up. This is D.C. accounting at its worst, and if we don't get our budget mess under control, we can't do the things we need to do to attract jobs to our state and fix our economy.”