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Article of Interest - Michigan

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Bridges4Kids LogoMLHS Statement on FY 2006 Budget Proposals
Michigan League for Human Services, June 8, 2005
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Proposals emerging from the legislature to balance the FY2005-2006 state budget represent a sweeping assault on Michigan's low-income families and individuals and, if adopted, would place tens of thousands of Michigan's most vulnerable residents at significant risk.

At a time when Michigan's lagging economy is producing constant demands on the state's social services infrastructure, the legislature is proposing to drastically alter the social contract it has long had with state residents-that in times of need, help is available to poor families and children, the sick, the disabled and the elderly.

House and Senate proposals to place state time limits on receipt of cash assistance by poor families, reduce assistance levels, curb Medicaid spending by instituting premiums, co-pays and deductibles for impoverished recipients, reduce child day care and foster care spending, and eliminate training for child welfare workers, would shred the social safety net that has provided families and individuals throughout Michigan with assistance through economic and health crises.

These proposals carry consequences-both in terms of human lives and the impact on communities.

For example, a 48-month lifetime limit on receipt of cash assistance and a reduction in the already meager cash assistance grant level would affect approximately 15,000 families and roughly 36,000 children. The maximum level of assistance for a mother with two children is a meager $459 per month-an amount that has not been raised in over a decade. Longer-term recipients who would lose benefits under the proposed time limits tend to have significant barriers, such as very low skill levels, lack of education, low literacy skills, poor health or mental health problems, and domestic violence and substance abuse problems that prevent them from entering or remaining in the labor force. The ability of these families to meet their most basic needs would be seriously compromised if cash assistance benefits are lowered and if Michigan adopts a time limit-particularly one that is more stringent than the federal time limit of 60 months.

In the area of Medicaid, institution of premiums, co-pays and deductibles will serve to keep many families out of the Medicaid system, along with caretaker relatives and 18 to 20 year-olds who will lose Medicaid eligibility. Their health care needs may not be addressed until they are forced to turn to emergency rooms for more costly and uncompensated care, shifting the cost to other areas of the health care system. Access to medical care by Medicaid recipients will also be compromised as fewer physicians accept recipients due to low reimbursement rates. Finally, Medicaid spending reductions will leave millions of dollars in federal matching funds in Washington that could instead supplement the state's Medicaid system and result in improved health care access for vulnerable Michigan residents and more dollars flowing through local economies across Michigan.

The reductions in state services that will result from these proposals will have a particularly detrimental impact on communities throughout Michigan as public funding for services is curtailed and local community resources are sought to fill the gap. Community resources throughout Michigan are already strained to the breaking point as a result of prior state budget reductions that have created additional need for services from local agencies. These agencies will try valiantly to meet community needs, but the reality may be that need will ultimately outstrip capacity if proposed state policies are adopted.

The legislature's decision to balance the budget without revenue increases comes after a series of tax policy decisions in prior years that have drastically reduced state revenues available to fund essential programs and services. The current budget proposals coming from the legislature, while claiming to avoid tax increases, are in fact tax increases in the form of fees and other payments imposed directly on low-income Michigan residents. The policy choices that have allowed our tax base to erode must be reversed if Michigan is to responsibly care for its most vulnerable residents and maintain the quality of life in this state that is necessary to attract and retain residents and businesses.

    

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