Gov. Snyder's Proposed Budget Plan Could Mean Cuts to City Offices and School Employees

Gov. Rick Snyder's proposed budget plan could mean layoffs and program or service cuts for Clawson schools and and city offices.

Under the governor's plan, unveiled Thursday morning,  K-12 schools face a $470 per pupil reduction that would save the state $452.5 million. He also proposed reducing statutory state shared revenue by $92.1 million and tying the remaining $200 million to an incentive plan in which municipalities would need to adopt "best practices" and "meet specific standards." Counties also face a $51.8 million reduction in revenue sharing.

Clawson City Manager Mark Pollock said the plan would cut $150,000 of statutory state shared revenue from Clawson, which is about 2.5 percent of the general fund budget.

The city's general fund budget in the 2010-2011 fiscal year was about $6.9 million, however the city will have to get the budget down to $6.2 million this year because of the projected loss in state shared revenue and property tax revenue drops, Pollock said.

Pollock said the city will have an idea of how much money they can get back from the state when Snyder releases more details on the incentive plan.

“I don’t think it’s a bad idea necessarily," Pollock said. “But it leaves us all wondering what are we going to have to do to get money back.”

Pollock said the city will likely make wage concessions, service cuts and possibly lay off workers to offset the funding losses.

Snyder, who said he'd refund his pay except for $1 this year, spoke in broad terms emphasizing his priorities over specifics, calling the proposal an opportunity to reshape Michigan's future and set an example for the nation. He spoke for about 35 minutes before the joint session of the House and Senate Appropriations, finance and tax policy committees.

"This day should have happened a long time ago," said Snyder during the address that was televised live on Michigan Government Television. "We shouldn't waste an opportunity. Not doing this would be kicking the can down the road. That's not why I got elected and it's not why you got elected. A lot of us are going to have to make sacrifices.

"The reason to do this isn't to avoid the negative. It's to jump to the positive."

After the governor and Lt. Gov. Brian Calley spoke, state Budget Director John Nixon focused on education, saying a system that focuses on early childhood through higher education needs to be adopted. Specifically focusing on K-12, he said districts could avoid instructional cuts if they adopt an 80-20 employer-employee split on their health care contributions. He said that would generate $300 million in savings.

In addition, if districts cut 10 percent non-instructional costs by following "best practices," it would generate another $300 million in savings.

"We feel this a very defensive plan that doesn't have to impact the classroom," he told lawmakers. "We know that's the critical area that needs to be maintained in school funding."

Gary Jackson, director of business services for Clawson Schools, said the 80-20 health care split would help the district, but this would call for negotiations to employee contracts.

The proposed $470 per pupil loss would cut about $846,000 out of the district's budget. However, Jackson said that amount doesn't include the $230 in per pupil funding they would lose for the retirement fund. Clawson Public Schools have about 1,800 students.

A budget drop of this magnitude would give Clawson Schools no choice but to make cuts in the classrooms, Jackson said. 

“When you have to cut that much out of your budget, you're talking (staff layoffs)," Jackson said, adding that 80 percent of the district's budget goes toward personnel salary and benefits. "If you have to eliminate positions, then you're talking program cuts."

Rep. Marty Knollenberg (R-Clawson & Troy) said Snyder's budget proposal covers a lot of ground, but these are only the beginning stages of a plan that still has to go through the legislative process. 

 “At this point it’s the most detailed budget I’ve seen," Knollenberg said. “It’s a budget that we knew going into it, a lot of tough decisions would need to be made.”

Hartland Patch editor Christofer Machniak contributed to this report.