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Article of Interest - Michigan

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Budget Bills Move Through The Sausage Maker
MIRS, September 9, 2004
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The House and Senate churned out the bulk of the Fiscal Year (FY) 2005 budget today and dealt with several other meat-and-potato bills necessary to cement the spending plan for the fiscal year that starts in just over two weeks.

Beginning in the Senate, the following is a brief run down on the [school/child related] budgets and related legislation.

Foster Care Agencies Get A Bump:

Foster care and adoption agencies received a 3 percent state increase and foster care and adoptive parents are getting a 1 percent increase as part of the $4.29 billion Family Independence Agency (FIA) budget that passed the Senate unanimously today. A federal fund increase of 12 percent allowed the state to take care of a rising caseload of folks needing government assistance.

The agreement on the FIA budget also contains adoption subsidies savings of $12.3 million and a permanency placement initiative. It also requires the FIA to contract with private firms in the name of efficiency. Sen. Bill HARDIMAN (R-Kentwood), chair of the Senate Appropriations FIA subcommittee, put his stamp on the budget by winning $250,000 in federal TANF money for fatherhood initiatives and another $200,000 in federal TANF money for a marriage initiative.

Another $500,000 in TANF money is being set aside for community service block grants.

Sen. Hansen CLARKE (D-Detroit) said the budget doesn't address the needs of the state's neediest people as much as the governor's original proposal. But since an agreeable compromise was reached on the children's clothing allowance issue and the budget recognizes the value of children being taken care of by their parents, Clarke said he found the budget agreeable.

The bill now goes to the governor for approval.

School Aid Budget:

Today the House approved, 99-8, the Conference Committee recommendation on SB 1069, a $12 billion ($165 million GF/GP) 2004-05 School Aid budget that includes 20j funding for the 22 (mostly wealthy) schools that had previously faced a $6.6 million cut in what they'd expected.

After initial reaction to the potential cuts, Gov. Jennifer GRANHOLM and lawmakers agreed to restore the funding and now have a plan to make up the $6.6 million through property sales instead.

For more detail see MIRS Sept. 7 edition. The bill now goes to the governor for approval.

Higher Ed Budget:

With a 105-0 vote, the House passed SB 1067, a $1.69 million ($1.6 million GF/GP) Higher Education budget for Fiscal Year 2004-05 (see related story).

The bill now goes to the governor for approval.

DCH Budget:

With a 91-15 vote, the House passed SB 1063 today, a $10 billion ($2.5 billion GF/GP) Department of Community Health (DCH) budget for FY 2004-05.

The bill includes a reduction in the dispensing fee Medicaid would pay to pharmacists for dispensing prescriptions. The dispensing fee cut of 34 percent was put forward by Gov. Jennifer GRANHOLM in her budget-cutting proposal.

Currently, pharmacies are paid a $3.77 per prescription dispensing fee. Under the conference report that will be sliced to $2.50 — a rate the administration argues is more in line with what private insurers pay.

The change is expected to generate $7.7 million in savings. Pharmacists however, have been arguing the cut would give Michigan the lowest Medicaid reimbursement rate in the country and lead to local layoffs.

Other highlights of SB 1063 include:

- The budget reflects the consensus Medicaid base as agreed to in May, an increase of about $100 million General Fund over Granholm's original recommendation.

- The budget includes $14 million in General Fund pharmacy costs (dispensing fee plus co-pay and mail-in pharmacy).

- The budget increases Healthy Michigan Fund prevention programming by $12.3 million. Highlights of that include an additional $110,000 for Alzheimer's disease outreach and education, an additional $1.5 million for smoking prevention, $1 million each for lead poisoning prevention and infant mortality.

- The budget restores Medicaid podiatric, chiropractic, and hearing aid services and increases payments to local public health dental clinics.

- The budget rejects Granholm's proposal to make most Graduate Medical Education payments through Medicaid HMOs.

- The budget reduces the Medicaid emergency room rate, saving $1.5 million, down from a $3 million cut originally supported by the administration and the Senate.

- The budget adds a new $5 million disproportionate share hospital (DISH) pool targeted to unaffiliated hospitals and hospital systems which received less than $900,000 in DISH payments in 2004.

The bill now goes to the governor for approval.

    

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