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Legislative Wonderland

The lengths that some lawmakers will go to avoid dealing with the reality of the state's budget situation was on display today in Lansing. With this week's conference of state economists expected to find that the budget deficit has grown significantly since January, some lawmakers were touting budget solutions that relied on the lower, outdated, figures. Late this afternoon, Senate Majority Leader Mike Bishop (R-Rochester) issued a press release announcing that an agreement had been reached on the state's budget deficit, one that did not require new taxes. Sen. Bishop's statement also noted that the agreement reduced end-of-year cuts to schools to $36 per pupil, down from the $122 per pupil cut Governor Granholm said would be necessary by June 1.

But early this evening, Gov. Granholm and House Speaker Andy Dillon (D-Redford Twp.) issued a joint statement saying that there was no agreement - yet. Their statement continued: "While progress has been made and the parties continue to meet and negotiate, no agreements have been reached on the 2007 general fund or School Aid fund budgets, including proration. Furthermore, the upcoming May 18th Revenue Estimating Conference is expected to show additional shortfalls in the current budget and the School Aid fund."

It turns out that the measured described by Sen. Bishop in his statement only address what members of his caucus have been calling the "known deficit," using figures from January, and not the significantly higher deficit numbers expected to be announced by the upcoming revenue conference. So the $36 per pupil cut is simply what was removed from the Senate's school aid appropriations bill before it was enacted some weeks ago. That bill used significant accounting "tricks," some debt restructuring, and modest program cuts to close most of the school aid deficit as calculated in January. The $34 per pupil cut in the original Senate bill was removed in the House, and both houses passed the revised bill. It was signed by Gov. Granholm on April 30. State economists have been estimating that the school aid deficit will be as much as $150 million larger than previously thought, requiring cuts of about $122 per pupil if the Legislature does not act to find other revenues.

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