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 MLHS
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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