Federal cuts won't mean layoffs for Michigan's state employees, Snyder says

Story originally appeared on the Detroit News.

Detroit -- Gov. Rick Snyder's administration said Monday no state employees would be laid off as a result of federal budget cuts, but the sequester will result in reductions of $150.5 million in government programs and grants this year and in 2014.

The cuts are entirely directed at federally funded programs in Michigan, and the Snyder administration had no say which programs received reductions, said Kurt Weiss, spokesman for the state budget office.

Programs hit by the sequestration range from job training and food assistance for seniors to K-12 education programs, loans for municipal wastewater treatment plant improvements and grants for trails along the Great Lakes.

To ensure there would be no layoffs, though, state agencies cut travel, supplies and administrative expenses and froze an unspecified number of vacant positions usually funded with federal tax dollars, Weiss said.

The Snyder administration chose not to replace the lost federal funds with state money and said school districts would have to adjust their budgets to account for the drop-off in funding for the 2013 and 2014 fiscal years.

"We've said from the start that Michigan would not be replacing lost federal dollars with state dollars due to sequestration and that still holds true," Snyder said Monday in a statement.

For the current fiscal year, which ends Sept. 30, $59.2 million in cuts are spread across 13 state agencies. In the 2014 fiscal year, $91.3 million cuts will be absorbed by the education, economic development and State Police departments.

The reductions result from the $85.4 billion in automatic federal budget cuts that took effect March 1 because Congress and President Barack Obama couldn't reach a compromise agreement to replace a 2011 budget deal they struck to raise the national debt limit.

Perhaps the hardest hit by the sequester will be 21,000 children living with relatives who will lose a $137 clothing allowance in August to buy clothes for the upcoming school year. Some children in the program are living with relatives because of parental abuse or neglect and many are low income, said Gilda Jacobs, president and CEO of the Michigan League for Public Policy.

"When kids go back to the school, just getting a new pair of shoes is pretty important ... and that doesn't mean their relatives are in the position to be able to help those kids," Jacobs said.

The $60 million in cuts will hit after-school programs, special education services, Title I programs for disadvantaged students, career and technical education programs and grants for quality teachers.

The Republican governor's approach to allowing the education cuts to take effect drew criticism from Democrats who say Snyder and the Republican-controlled Legislature are already shortchanging public education.

"He's been doing this for the last two years -- enough," state Rep. Rashida Tlaib, D-Detroit, said of cuts to schools. "I think he needs to look in a different direction instead of going directly to our classrooms."

Some departments found ways to tap unused funds to make up for the loss in federal money or put off expenses hit by the sequester until next year, according to records released Monday to The Detroit News.

The Department of Environmental Quality said it would tap the state's Environmental Pollution Prevention Fund to avert staff losses this year.

But if federal funding for the hazardous waste management isn't resolved for the 2014 fiscal year, "there will be layoffs in addition to releasing the Senior Environmental Engineers that are on contract," according to a DEQ sequestration report.

The DEQ also said it is losing $4.4 million in funds available for municipalities to borrow for water and wastewater treatment plant improvements.

"This could result in the inability for municipalities to complete projects or will force them to look elsewhere for financing that will typically result in higher project costs and longer delays," according to a DEQ memo.

The Department of Community Health said it could offset a $9.9 million cut to the women, infants and children food aid program using unspent funds from 2012 and savings from a change in the grant formula.

Rep. Joe Haveman, chairman of the House Appropriations Committee, said Snyder's approach was fiscally prudent given the "tight" budget lawmakers face.

"There's no way we can start replacing everything with state funds," said Haveman, R-Holland. "There's just not enough money to do that kind of thing."