Reports


Final Corrections Budget Invests in Prevention, Reflects Health Care Savings

The Department of Corrections budget for the budget year that begins Oct. 1 includes new efforts to prevent individuals from entering the justice system, helps inmates transition back into their communities and improves other re-entry programs. The Corrections final budget also reflects expected savings from the implementation of the Healthy Michigan Plan, which would allow the Department to claim federal reimbursement for some healthcare costs for inmates, probationers and parolees.

The final DOC budget approved is $2.04 billion in total funding, including $1.98 billion in state General Fund. This is a 0.4% ($8.1 million) increase in total funding, and a 1.2% ($22.8 million) increase in state General Fund dollars, compared with this year’s funding.

The DOC budget is the fifth largest, accounting for approximately 4% of total appropriations from all fund sources in the current fiscal year. When state General Fund monies are considered alone, the DOC budget is the state’s second largest, accounting for 21.3% of the General Fund. General Funds made up over 96% of the Corrections budget in Fiscal Year 2014.

The final budget is lower than the governor’s recommendation by $9.4 million in GF and total funding. Included in the DOC budgets are the following changes:

Healthy Michigan Plan

Governor:

  • Recognizes full-year savings of $19.1 million in state General Fund in Fiscal Year 2015 as a result of the implementation of the Healthy Michigan Plan. Under this plan, low-income individuals ages 19-64 – who are not eligible for or enrolled in Medicaid or Medicare, are not pregnant, and have incomes up to 133% of the federal poverty level – qualify for comprehensive healthcare. The current-year budget assumed that most prisoner inpatient hospitalizations, certain services for mentally ill and medically fragile inmates, and some re-entry services would be covered. However, it was subsequently determined that certain treatments for sex offenders and substance abuse are not eligible for Medicaid reimbursement. The executive budget acknowledges that these services are not covered by federal funds, and reinstates $5.1 million in state funds to cover the costs.

House:

  • Concurs with the governor.

Senate:

  • Concurs with the governor.

Final Budget:

  • Concurs with the governor.

New Hepatitis C Treatment Protocol

Governor:

  • Includes $4.9 million in new funding to implement a treatment protocol for Hepatitis C, as recommended by the Centers for Disease Control and Prevention. Current treatment duration can take up to one year; includes side effects such as depression, anxiety and anemia; and is not guaranteed to cure the disease. The drugs recently approved by the Federal Drug Administration shorten the treatment period to 12 weeks, have fewer side effects, and a success rate of approximately 95%.

House:

  • Does not concur with the governor.

Senate:

  • Includes a $100 placeholder to ensure discussion of the issue in conference committee, expressing concerns about the higher cost of the new treatment protocol.

Final Budget:

  • Includes $4.4 million in General Funds.

Mental Health Diversion Council

Governor:

  • Includes $1 million in state funding for a pilot project that will connect inmates in one local jail with comprehensive mental health treatment as they transition back into the community. This funding is part of the implementation of the recommendations of the Mental Health Diversion Council created by the governor in 2013. This council is tasked with developing methods to divert individuals with mental illness or substance abuse problems out of the criminal justice system and into appropriate treatment.

House:

  • Concurs with the governor.

Senate:

  • Concurs with the governor.

Final Budget:

  • Concurs with the governor.

Prisoner Education Enhancement

Governor:

  • Includes $4.3 million General Fund (of which $1.1 million is one-time funding) to expand prisoner vocational education and prepare parolees for entry into the workforce. The added funding will be used to hire 15 additional employment counselors and five instructors. This initiative will focus on helping inmates acquire skillsets that are in demand by employers and connect inmates with employers prior to their release.

House:

  • Concurs with the governor.

Senate:

  • Does not include this funding.

Final Budget:

  • Concurs with the governor.

Michigan State Industries

Governor:

  • Includes $12.3 million in restricted funds to cover the administrative costs of Michigan State Industries. MSI is a DOC program that employs inmates while imprisoned. MSI’s stated goal is to give inmates an opportunity to acquire job skills and experience in preparation for their release.

House:

  • Concurs with the governor.

Senate:

  • Reduces funding for this program by $6.2 million (50%) in restricted funds, and calls for a study of the program by December 2014.

Final Budget:

  • Concurs with the governor.

Goodwill Flip the Script

Flip the Script is a program of Goodwill Industries of Greater Detroit, which provides education, job training and mentoring for young males, 16-30 years old, to encourage their self-sufficiency and prevent their entry into the justice system.

Governor:

  • Does not include funding for the program, which is a new line item in the Senate budget.

House:

  • Does not include new funding.

Senate:

  • Includes $4.5 million in state funds for Flip the Script.

Final Budget:

  • Includes $2.5 million in state funds.

Swift and Sure

The Swift and Sure Sanctions Probation Program is a joint project with Michigan Rehabilitation Services in the Department of Human Services, and is designed to assist mentally and physically disabled probationers find employment.

Governor:

  • Does not include new funding, which is a new line item in the Senate budget.

House:

  • Does not include new funding.

Senate:

  • Includes $3 million in additional state funding. These funds would be transferred to the Department of Human Services to expand The Swift and Sure Sanctions Probation Program.

Final Budget:

  • Includes $1 million in additional state funds.

Prisoner Re-Entry Legal Services

Re-entry legal services is a pilot program that would assist ex-offenders with employment, housing, child support and other related matters by providing outreach, education and legal representation.

Governor:

  • Does not include funding for the program, which is a new line item in the House budget.

House:

  • Adds $449,000 in state General Fund for two pilot programs to be established in Kent and Oakland counties (the latter also serving Wayne County).

Senate:

  • Does not include new funding.

Final Budget:

  • Includes $149,000 in state funds.

Re-Entry, Parole, Probation and Community Programs

Governor:

  • The governor recommends $311.7 million in total funding for re-entry, parole, probation and community programs, a decrease of 4.9% ($15.9 million) compared with year-to-date funding. This decrease reflects expected savings from the implementation of the Healthy Michigan Plan, expected reductions in federal grants, and a transfer of funds to the Correctional Facilities Unit for the newly re-opened Detroit Detention Center.

House:

  • Includes $312.1 million, a decrease of 4.7% ($15.5 million) compared with year-to-date funding.

Senate:

  • Approves $315.5 million, a decrease of 4.3% ($14.1 million) compared with year-to-date funding.

Final Budget:

  • Includes $313.6 million, a decrease of 4.3% ($14.0 million) compared with year-to-date funding.

Human Services Budget Reflects Continuing Steep Caseload Declines

 

After years of declining investments, the Department of Human Services budget signed by the governor for the year beginning Oct. 1 further reduces total funding by 4.8%, from $6.05 billion to $5.76 billion.1 Driving the reductions has been an unprecedented drop in the number of families with children able to access income assistance through the state’s Family Independence Program. FIP cases are expected to fall from their recent peak of 85,389 in 2007 to 32,800 next year—a drop of 62% in less than a decade.2

Reductions in caseloads and spending partly reflect policy decisions that have made fewer families and children eligible for public assistance benefits, including lifetime limits on income assistance, and a new asset test for food assistance.

In the current fiscal year, the DHS budget is the state’s third largest, accounting for 12.3% of total spending from federal and state resources. Federal funds now account for more than 80% of DHS funding, up from 70% in Fiscal Year 2004. Other sources of revenue for DHS are state General Funds (17%); and state restricted, local and private funds.

DHS administers a range of services, including the Family Independence Program; the Food Assistance Program; State Disability Assistance; State Emergency Relief; and child protective, foster care, adoption and juvenile justice services. Decisions made by the Legislature will affect nearly 2.4 million Michigan residents—including over 1 million children—who receive some form of public assistance to help them hold low-wage jobs, feed and shelter their children, access healthcare, or survive when faced with serious illnesses or disabilities.

Income Assistance

Governor’s Budget:

  • Cuts funding for income assistance for families with children. The governor’s budget for Fiscal Year 2015 includes $152 million for the FIP program, a reduction of 29% from the current level of $214.3 million. The governor assumes that FIP caseloads will fall from 44,400 this year to 33,200 in 2015, a reduction of 25% in a single fiscal year.
  • Expands funding for outstationed DHS workers. The governor recommends $19.3 million in federal, private and local funds to expand the number of outstationed DHS workers by 150. With this funding, DHS would be able to expand the number of workers in hospitals, long-term care facilities, school based centers or businesses that agree to pay a portion of the cost, using their contributions to draw down federal funding.
  • Continues the current Extended-FIP policy, which gives households leaving FIP due to earnings $10 per month in FIP assistance for six months. In 2011, when the state tightened its 48-month lifetime limit on FIP, those six months of very minimal assistance began to count against a family’s lifetime limit. The governor’s budget also removes language requiring DHS to notify persons eligible for Extended-FIP that receiving it will count toward federal and state lifetime limits. The governor projects monthly Extended-FIP caseloads of 1,105 next year, down by 155 cases.
  • Continues the current FIP children’s clothing allowance. The governor’s budget includes $2.9 million for the annual clothing allowance for children. The allowance was originally designed to make sure that school-age children have the opportunity to at least start the school year with a set of clothes. The program was restricted in 2011 to only those children in FIP cases that do not include an adult—e.g., children living with ineligible grandparents or other caregivers.

House:

  • Agrees with the governor’s recommended FIP caseload of 33,200, and total funding of $152 million.
  • Allocates $2.9 million for the annual FIP children’s clothing allowance, but expands eligibility to all FIP children ages 4 through 18.
  • Continues current policy of counting minimal Extended-FIP benefits against lifetime limits, but expands budget language requiring DHS to notify families of the effect on lifetime benefits on both the FIP application and the form that notifies families of their eligibility.
  • Agrees with the governor’s expansion of outstationed workers, but transfers non-child welfare DHS staff to offset the expected increase in donated funds positions, rather than increase the number of authorized positions.

Senate:

  • Agrees with the governor’s projected FIP caseload of 33,200, a reduction of 11,200 cases monthly, reducing FIP funding by $62.3 million.
  • Adds budget language requiring DHS to report quarterly on: (1) the number and percentage of nonexempt FIP recipients who are employed; (2) the average and range of wages of employed FIP recipients; and (3) the number and percentage of employed FIP recipients who remain employed for 6 months or more.
  • Agrees with the governor’s expansion of outstationed workers by $19.3 million and 150 full-time positions.
  • Agrees with the governor by continuing to count minimal Extended-FIP benefits against families’ lifetime limits.
  • Includes new budget language requiring DHS to create a workgroup to determine how Michigan Works! job training programs can be revised to reflect declining FIP caseloads, including possible reductions in the amount of federal Temporary Assistance for Needy Families (TANF) funding that is provided to Michigan Works!

Final Budget:

  • Cuts funding for income assistance for families with children below the governor’s recommendation. The final budget includes $147 million for the FIP program, a reduction of 31% from the current year level of $214 million. The governor had originally assumed that FIP caseloads would fall from 44,400 this year to 33,200 in 2015, a reduction of 25% in a single fiscal year. With the May revenue estimating conference, the current year caseload is now expected to be only 36,100, falling to 32,800 in Fiscal Year 2015.
  • Includes $25.7 million to expand the number of outstationed DHS workers by 200—above the governor’s recommendation of $19.3 million—but rejects a House proposal to transfer 150 non-child welfare DHS staff to offset the expected increase in donated funds positions.
  • Continues the current Extended-FIP policy, which gives households leaving FIP due to earnings $10 per month in FIP assistance for six months, which counts against a family’s lifetime limit. The budget assumes that an average of 1,000 families monthly will receive Extended-FIP benefits.
  • Continues the current FIP children’s clothing allowance, limiting it to children in FIP cases that do not include an adult—e.g., children living with ineligible grandparents or other caregivers—and rejecting the House proposal to expand eligibility to all FIP children ages 4 through 18.
  • Includes new language requiring specific outcome and performance reporting from the Michigan Strategic Fund for TANF funded job readiness and welfare-to-work programs, including the number and percent of persons who obtained employment through Michigan Works!; those that fulfilled their work requirements through other job readiness programs; average TANF spending per client; and the number and percent of clients who were referred to Michigan Works! but did not receive a job or placement, and the reasons why.

Food Assistance

Governor’s Budget:

  • Reduces FAP funding by $444.5 million, to a total of $2.4 billion. The cut reflects the loss of federal American Recovery and Reinvestment Act funding as well as a projected drop in FAP households, from 894,750 this year to 890,000 in Fiscal Year 2015. Nearly 1.7 million Michigan residents received FAP benefits in January 2014, including over 700,000 children. Of those children, 242,408, or more than one-third, were under the age of 6.
  • Continues the optional state assets test for FAP benefits. Beginning in October 2011, DHS adopted an asset test for FAP eligibility that is not required under federal law. FAP households/groups must now have less than $5,000 in assets, including the value of vehicles after certain exemptions.
  • Provides no resolution of the “Heat and Eat” provisions of the federal Farm Bill. The governor’s budget was released right before the Farm Bill was passed by Congress and therefore did not address federal cuts related to the “Heat and Eat” provisions of the bill. The Heat and Eat option, which was utilized by 16 states including Michigan, allowed states to use a standard utility allowance in determining food assistance benefits, including situations where eligible households receive a nominal $1 per year in energy assistance through the Low Income Health and Energy Assistance Program (LIHEAP). Under the new Farm Bill, the nominal LIHEAP payment was increased to a minimum of $20 per year.

The House Fiscal Agency estimates—based on Fiscal Year 2010 data—that continuing the Heat and Eat option in Fiscal Year 2015 would have required an additional $8.4 million in LIHEAP spending, while preventing the loss of approximately $250 million in federal food assistance. The failure to raise the LIHEAP payment to $20 will result in the loss of $88 per month in food assistance for more than 235,000 low income families.

House:

  • Agrees with the governor on the projected FAP caseload of 890,000, as well as the loss of ARRA funding, resulting in a total cut in FAP funding of $445.5 million.
  • Retains the FAP asset test.
  • Does not address the “Heat and Eat” provisions of the federal Farm Bill.

Senate:

  • Concurs with the governor and the House on FAP caseloads and related funding.
  • Retains the FAP assets test.
  • Does not address the “Heat and Eat” provisions of the federal Farm Bill.

Final Budget:

  • Reduces FAP funding by $286.6 million, to a total of $2.55 billion. The cut reflects the loss of federal ARRA funding as well as a projected drop in the number of FAP households, from 894,750 this year to 860,000 in Fiscal Year 2015, at an average monthly cost per case of $247.
  • Continues the optional state assets test for FAP benefits.
  • Provides no resolution of the “Heat and Eat” provisions of the federal Farm Bill.

State Disability Assistance and Services

Governor’s Budget:

  • Reduces funding for State Disability Assistance by 14%. The governor’s budget includes $17.9 million for the SDA, down from the $20.8 million appropriated in the current fiscal year. SDA caseloads have been decreasing since Fiscal Year 2010, in part because of efforts to ensure that SDA recipients who are eligible for federal Supplemental Security Income are transferred to that program.
  • Projects continued reductions in SDA cases. The governor assumes that the SDA caseload will also fall by 14% from the level budgeted in the current fiscal year, with total cases of 6,693 next year.
  • Increases funding for Michigan Rehabilitative Services. The governor includes $4.4 million ($2.4 million in one-time funding), allowing DHS to draw down an additional $14.8 million in federal matching funds for rehabilitative services and avoid waiting lists.
  • Expands disability determination staff. The governor’s budget includes an additional $20.6 million in available federal funding, allowing the state to add 80 staff positions to determine eligibility for disability services.

House:

  • Agrees with the governor on a caseload of 6,693 for SDA, a reduction in funding of $2.9 million in state General Funds, and total funding for SDA payments of $17.9 million.
  • Includes only $2 million for Michigan Rehabilitative Services (down from the governor’s recommendation of $4.4 million).
  • Appropriates an additional $1 million for the Centers for Independent Living for accessible, comprehensive and coordinated services for persons with disabilities—with the goal of improving financial self-sufficiency.
  • Concurs with the governor on the expansion of federal disability determination workers.

Senate:

  • Agrees with the governor’s overall reduction in funding for SDA payments from $20.8 million this year to $17.9 million in Fiscal Year 2015, as well as the projected SDA caseload of 6,693.
  • Agrees with the governor and expands funding for Michigan Rehabilitative Services by $4.4 million, drawing down an additional $14.8 million in federal funds. In addition, the Senate adds $3 million to match $11.1 million in funding in the Department of Corrections to provide vocational and other services to persons with histories of probation and parole violations (not currently incarcerated), as well as those with severe mental health needs.
  • Concurs with the governor on the expansion of federal disability determination workers, and takes savings of $2.2 million in the budget, assuming that additional staff support would reduce the average number of months individuals would receive state disability assistance from 12 months to 9 months (for half the caseload).
  • Agrees with the House and appropriates $1 million to continue and expand the Center for Independent Living project.

Final Budget:

  • Reduces funding for State Disability Assistance by 20%. The budget includes $16.6 million for the SDA, down from the $20.8 million appropriated in the current fiscal year. SDA caseloads have been decreasing since Fiscal Year 2010, and the budget assumes that the SDA caseload will fall to 6,500 next year.
  • Increases funding for Michigan Rehabilitative Services by $3.4 million, allowing DHS to draw down additional federal matching funds to expand rehabilitative services and avoid waiting lists.
  • Includes an additional $20.6 million in available federal funding to allow the state to add 80 staff positions to determine eligibility for disability services. The final budget also cuts $2.2 million to reflect the Senate’s assumed reduction in the average number of months individuals would receive State assistance before moving to federal assistance from 12 to 9 months.
  • Agrees with the Senate to add $3 million through an interdepartmental grant with the Department of Corrections to draw down additional federal dollars to provide vocational and other services to persons with histories of probation and parole violations, as well as those with severe mental health needs, who are not currently incarcerated (the Swift and Sure Sanctions Probation Program).
  • Appropriates an additional $500,000 (down from $1 million in the House and Senate budgets) for the Centers for Independent Living for accessible, comprehensive and coordinated services for persons with disabilities—with the goal of improving financial self-sufficiency.
  • Adds new language requiring DHS to set up a workgroup to look at licensing standards and performance measure for adult assisted living facilities to ensure greater safety and supervision.

State Emergency Services

Governor’s Budget:

  • Continues current energy assistance policies and appropriations. In addition to federal funding from the Low Income Home Energy Assistance Program (LIHEAP), Michigan used to receive funds through the state’s Public Service Commission for energy assistance. After the courts ruled that the PSC did not have authority to collect restricted fee revenues, a decision that reduced funding by $60 million annually, the Legislature approved a new surcharge on electric meters to fund the Michigan Energy Assistance Program (MEAP). The MEAP was created in state law (P.A. 615 of 2012), and required DHS to establish a consolidated energy assistance program with a single, simplified application. For Fiscal Year 2015, the governor includes nearly $175 million in LIHEAP funding, as well as $60 million for the MEAP.
  • Provides continuation funding for State Emergency Relief services, including $13.6 million for local DHS office emergency services, $15.7 million for homeless services through the Salvation Army, $4.3 million for indigent burial services, $1.8 million for the Food Bank Council, and $3 million for multicultural services.

House:

  • Includes $165 million for LIHEAP—$10 million less than the governor—including approximately $85 million for home heating credits and $80 million for energy crisis assistance. The House uses $10 million in federal LIHEAP to fund the MEAP, reflecting a statutory cap on the new surcharge of $50 million in collections, and bringing total spending for the MEAP in the House budget to $60 million.
  • Concurs with the governor and provides $13.6 million for local office emergency services, $15.7 million for homeless programs, $4.3 million for indigent burials, $1.8 for food banks, and $3 million for multicultural integration funding and the Chaldean Community Foundation.

Senate:

  • Concurs with the governor, providing $175 million for LIHEAP, and $60 million for the MEAP.
  • Includes a $200,000 increase in funding for food banks, bringing total funding to nearly $2 million.

Final Budget:

  • Agrees with the governor and continues current energy assistance policies, with $175 million for LIEAP, and $50 million for the MEAP.
  • Provides $11.5 million for local DHS office emergency services, $15.7 million for homeless services through the Salvation Army, $4.3 million for indigent burial services, $1.8 million for the Food Bank Council, and $3 million for multicultural services.

Child Welfare and Family Services

Governor’s Budget:

Foster Care and Protective Services

  • Provides a slight increase in funding for foster care services. The governor recommends $190.3 million for foster care payments, up slightly from the $187.7 million appropriated for this year.
  • Projects a small reduction in projected foster care cases. The governor cuts $2.4 million ($1 million state General Funds) to reflect a projected decline in foster care cases from 6,250 this year to 6,075 in Fiscal Year 2015. Foster care cases have been falling and, with the governor’s projections, will be down 43% between Fiscal Years 2005 and 2015.
  • Provides funding to pay 100% of private agency administrative rates. The governor includes a $5 million increase in funding to pay 100% of the private child placing agency administrative rate for new cases entering care. Those costs are currently split between the state and counties.
  • Increases funding for the County Child Care Fund by 4%. The governor includes $178 million for the Child Care Fund, an increase of 4% over the current year appropriation. The Child Care Fund provides for the care and treatment of delinquent or maltreated children who are court wards and not eligible for federal payments through Title IV-E. The primary sources of funding for the Child Care Fund are state General Funds (49.8%) and federal TANF (48.5%).
  • Increases funding for medical and psychiatric evaluations of abused and neglected children. The governor includes an additional $2.1 million for medical and psychiatric evaluations for children in the child welfare system, increasing total funding from $6.6 million to $8.7 million.
  • Provides funding to launch a new performance-based contracting model for child welfare services. The governor includes $1.4 million, including $1 million in state General Fund for the first phase of a new financing model for child welfare services.

Adoption Services

  • Includes a small decrease in funding for adoption subsidies. The governor includes $241 million for adoption subsidies, a small decrease from the current year appropriation of $244 million. Subsidies are provided to families adopting children with special needs, and include both cash and medical subsidies for pre-existing medical or mental health conditions. Adoption subsidy average monthly caseloads increased by 11% between Fiscal Years 2005 and 2010, and have since stabilized at approximately 27,000. The major sources of funding for adoption subsidies are Title IV-E (46%), state General Funds (33%), and federal TANF (21%).
  • Increases incentive payments for private agencies finalizing adoptions. The governor includes a total of $3.2 million—an increase of 5%—for private agencies that are placing children for adoption, including incentive payments to encourage more timely adoption turnaround times.

Family Preservation and Prevention

  • Fails to reinvest in prevention and family preservation services. The governor provides continuation funding for Strong Families/Safe Children ($12.35 million), Family Reunification ($3.98 million), and family preservation and prevention services programs ($2.5 million). Small cuts were made in the Families First program (from $17.2 million to $16.9 million), and the Child Protection and Permanency program ($13.2 million to $12.9 million). Total funding for family preservation and prevention programs fell from $60.6 million in Fiscal Year 2005 to $49.3 million in the current fiscal year—a reduction of nearly 19%, in the face of a 20% increase in the number of substantiated victims of child abuse and neglect.

Other Child and Family Services

  • Provides a small increase in funding for juvenile justice reentry services. The governor recommends $800,000 for services for youths in the juvenile justice system to ease their re-entry into the community.
  • Provides funding for the Healthy Michigan Plan call center. The governor recommends $20.3 million for a call center for Healthy Michigan Plan/Medicaid applicants and recipients.

House:

Foster Care and Protective Services

  • Recommends total funding for foster care payments of $188.4 million, slightly below the governor’s budget, but accepts the governor’s estimated foster care caseload of 6,075, at a projected cost of $28,061 per case for the year.
  • Increases the Child Care Fund to $185.2 million. The House agrees with the governor to pay 100% of the private agency administrative rate for new cases next year (rather than splitting costs with the counties), but appropriated those funds to the Child Care Fund, rather than to the foster care portion of the budget.
  • Includes the governor’s recommended increase in funding for incentive payments for private agencies that finalize adoptions in a timely manner ($3.2 million).
  • Revises the goal limiting the number of children in foster care for longer than 24 months from 31% to 25%.
  • Appropriates an additional $3.7 million (including $3.3 million in state funds) to increase rates paid to private agency residential care providers by slightly over 2%—provided the county match rate is eliminated for the increase.
  • Agrees with the governor to fund the launching of a new performance-based contracting model for child welfare services. The House shifts $100,000 of state funds (from the total $1.4 million recommended by the governor) for a technical assistance contract for Kent County—the first county to pilot the new financing approach. Under the House bill, Kent County would privatize all foster care and adoption services (not child protective services) by Oct. 31, 2014, with performance-based funding in place at that time.
  • Expands the governor’s proposed increase in funding for medical and psychiatric evaluations of abused and neglected children by $100,000 to a total of $2.2 million.

Adoption Services

  • Agrees with the governor on the projected adoption subsidy caseload of 26,800 at an estimated cost of $732 per month per case, as well as total spending for the program of $241.1 million.
  • Concurs with the governor and adds $3.2 million in state funds for incentives for private agency adoptions.
  • Adds budget language prohibiting DHS from using the income of the adoptive parent in determining eligibility for adoption support subsidies.
  • Adds $1 million for a “Parent to Parent” peer mentoring program to provide support for adoptive parents.

Family Preservation and Prevention

  • Concurs with the governor’s recommendation on funding for family preservation and prevention programs, with continuation funding for Strong Families/Safe Children, Family Reunification, and family preservation and prevention services programs, as well as small cuts in the Families First and Child Protection and Permanency programs.

Other Child and Family Services

  • Allocates $3 million for before- and after-school programs, as well as $500,000 for a school success partnership program through the Northeast Michigan Community Services Agency.
  • Approves the governor’s recommendation of $800,000 for services for youths in the juvenile justice system to ease their re-entry into the community.
  • Cuts $8.1 million ($3 million in state General Fund) by closing the Maxey Training School for delinquent youths, transferring those youths to other facilities.
  • Approves $20.3 million for the Healthy Michigan Plan call center.
  • Approves $350,000 for the Michigan Reading Corps to provide literacy services and tutors for students in kindergarten through third grade who are identified as being at risk of reading failure.

Senate:

Foster Care and Protective Services

  • Agrees with the governor on foster care caseloads and costs, projecting a decline in foster care cases to 6,075 next year, and a total reduction in related foster care costs of $2.4 million.
  • Agrees with the governor on a nearly $7 million increase (4%) in the County Child Care Fund, with total funding of $178 million.
  • Agrees with the governor’s recommendation to allocate $1.4 million for the new performance-based contracting model for child welfare services.
  • Increases funding for medical and psychiatric evaluations of children in the protective services and foster care systems by $2 million over the governor’s recommendation, for a total increase of $4.1 million. Total funding would rise to $10.7 million—up nearly 63% from the current fiscal year.
  • Agrees with the governor in approving a $5 million increase in funding to pay 100% of the private child placing agency administrative rate for new cases entering care.
  • Includes $300,000 to cover the costs foster parents incur in transporting their foster children to parent-child visitations.
  • Adds new budget language requiring DHS to set clear policies for parent-child visitations, including written plans with a minimum of 3 hours per child per week.

Adoption Services

  • Concurs with the governor and includes $241 million for adoption subsidies, a decrease of $2.9 million from the current year based on a projected drop in the caseload of 350 cases to 26,800.
  • Increases funding for incentive payments for private agency adoptions by only 3.3% (compared to the 5% recommended by the governor and approved by the House), for a total increase of $2.2 million.
  • Includes $18.8 million to allow adoptive parents to claim enhanced payment rates for children who had special needs that existed at the time of adoption, but were not identified until later. Adoptive parents would be allowed to receive the enhanced rate one time for any eligible child from birth to age 18. This recommended change is in response to complaints filed by adoptive parents that they were not notified that their adopted children had special needs, and includes physically disabled children needing greater supervision and care, as well as children with special mental health needs, requiring special diets, or with antisocial behaviors.
  • Includes budget language prohibiting DHS from negotiating adoption subsidies that are below the standard payment for foster care.

Family Preservation and Prevention

  • Concurs with the governor’s recommendation on funding for family preservation and prevention programs, with continuation funding for Strong Families/Safe Children, Family Reunification, and family preser¬vation and prevention services programs; and small cuts in the Families First and Child Protection and Permanency programs.

Other Child and Family Services

  • Includes $125,000 in state funds to match federal funding for the Michigan Reading Corps—for the purpose of literacy and tutoring services for children in kindergarten through third grade—as well as $300,000 to expand the School Success Partnerships program to four new counties through the Northeast Michigan Community Services Agency.
  • Includes $2.9 million for a database to track youths in the juvenile justice system, funding not included in the governor’s budget or the House budget.
  • Includes $500,000 to expand grants to rural communities to fund new and expanded in-home juvenile justice programs, bringing total funding to $1.5 million.
  • Includes the governor’s proposed increase in funding for juvenile justice reentry services of $800,000.
  • Includes $20.3 million for the Healthy Michigan Plan call center.

Final Budget:

Foster Care and Protective Services

  • Includes $190.8 million for foster care payments, up approximately $3 million from year-to-date 2014 estimated spending. The final budget projects that there will be 6,500 foster care cases in Fiscal Year 2015 at an average cost of $27,085 per year. While recently leveling out, foster care cases have fallen 39% since Fiscal Year 2005.
  • Agrees with the governor to pay 100% of the private agency administrative rate for new cases next year rather than splitting costs with the counties.
  • Increases the Child Care Fund to $175 million, based on new estimates from the May consensus revenue conference.
  • Includes the governor’s recommendation to increase funding for medical and psychiatric evaluations of abused and neglected children by $2.1 million, expanding total funding from $6.6 million to $8.7 million.
  • Agrees with the governor to provide $1.4 million for the launching of a new performance-based contracting model for child welfare services. Also accepts the House decision to shift $100,000 of state funds (from the total $1.4 million recommended by the governor) for a technical assistance contract for Kent County—the first county to pilot the new financing approach.
  • Appropriates an additional $3.7 million as recommended by the House to increase rates paid to private agency residential care providers by slightly over 2%.
  • Includes budget language requiring the DHS to reimburse foster parents who transport foster children to parent-child visitations, as well as clear DHS policies, goals and written plans for visitations, and training for court personnel on the importance of parent-child visitations in foster care cases. Does not include the $300,000 added by the Senate to cover travel reimbursements for foster parents.

Adoption Services

  • Includes $239.8 million for adoption subsidies, a reduction of $4.3 million based on an anticipated caseload of 26,725.
  • Increases incentive payments for private agencies to finalize adoptions in a timely way by 3.3% for a total increase of $2.2 million—down from the governor’s recommended increase of $3.2 million or 5%.
  • Revises Senate budget language prohibiting DHS from negotiating adoption subsidies that are less than 95% of the standard payment for foster care.
  • Includes $7.9 million (down from the Senate recommendation of $18.8 million) to allow adoptive parents to claim enhanced payment rates for children who had special needs that existed at the time of adoption, but were not identified until later.
  • Adds $700,000 (down from the $1 million approved by the House) for the adoptive family support network to operate and expand into additional regions.

Family Preservation and Prevention

  • Provides continuation funding for most prevention and family preser¬vation services, after a reduction of nearly 19% in programs to prevent child abuse and neglect between fiscal years 2005 and 2014.

Other Child and Family Services

  • Rejects the House proposal to spend $3 million for before- and after-school programs.
  • Includes the House proposal to provide $350,000 for the Michigan Reading Corps to provide literacy services and tutors for students in kindergarten through third grade who are identified as being at risk of reading failure.
  • Includes $300,000 to expand the School Success Partnerships program to four new counties through the Northeast Michigan Community Services Agency.
  • Rejects the House plan to cut $8.1 million by closing the Maxey Training School for delinquent youths.
  • Includes $800,000 recommended by the governor for services for youths in the juvenile justice system to ease their re-entry into the community.
  • Includes $1 million (down from the $2.9 million approved by the Senate) for a database to track youths in the juvenile justice system.
  • Includes $250,000 (down from the $500,000 adopted by the Senate) to expand grants to rural communities to fund new and expanded in-home juvenile justice programs.
  • Provides slightly less funding ($19.5 million) for the Healthy Michigan Plan call center.

Endnotes:

1 Based on Senate Fiscal Agency estimates of year-to-date Fiscal Year 2014 spending, from F. Carley, Human Services S.B. 769 Decision Document, Senate Fiscal Agency (June 12, 2014).
2 K. Koorstra, Human Services Background Briefing, House Fiscal Agency (December 2013), and memorandum from K. Koorstra regarding FIP and FAP caseloads (June 12, 2014).

Postsecondary Education Budgets Take Good Steps, But University Tuition Remains Unaffordable

Michigan is taking some small steps toward postsecondary education affordability in the FY 2015 budget by continuing to make a portion of university funding contingent on keeping tuition increases within 3.2% (“tuition restraint”), by adding a performance funding indicator that rewards universities based on enrollment of students with Pell Grants, and by increasing appropriations for financial aid.

Because Michigan does not have a state agency that exercises financing or policy authority over its universities and community colleges, decisions made during the budget process are often designed to force policy changes.

For Fiscal Year 2014-15, funding for the Tuition Incentive Program, a needs-based grant for Medicaid-eligible students, is increased by $1.5 million (3.2%). This grant pays all expenses for an Associate Degree or certificate from a community college, and $2,000 for continuation at a four-year university. Funding for the Tuition Grant, a needs-based grant for attendance at private institutions, is increased by $1.9 million (5.9%). Funding for the Michigan Competitive Scholarship, for which eligibility is based on both merit and need, comes from Michigan’s TANF block grant and remains at the current level.

Community colleges remain affordable in Michigan, but university education is not, due to appropriations decisions over the past 12 years. Since 2002, universities have become increasingly dependent on tuition as the state reduced its support, and as a result, nearly 75% of current university operations funding comes from student tuition and fees, while less than 25% comes from state General Fund appropriations. Most universities doubled their tuition between 2003 and 2013 to make up for the loss in state funding, and Michigan now has the sixth-highest university tuition in the nation while Michigan students hold some of the highest debt. While the 5.9% increase in university appropriations and the 3.2% limit on tuition increases are steps in the right direction, they do not go far enough toward making university tuition affordable.

Community Colleges

Governor’s Budget:

  • Appropriates a 3% ($8.9 million) increase in total funding for community college operations, which is distributed among the 28 Michigan community colleges according to the following metrics: proportional increase from FY 2013-14 funding (50%), weighted completions (17.5%), student contact hours (10%), administrative costs (7.5%) and local strategic value (15%). (Colleges receive the local strategic value portion if they meet four out of five listed best practices in each of the following areas: a) economic development and business/industry partnerships, b) educational partnerships, and c) community services.)
  • As in previous recent years, the majority of overall funding in the governor’s budget for community colleges comes from the School Aid Fund ($197.6 million, an amount equal to the current School Aid Fund appropriation) and the rest comes from the General Fund ($173.9 million, a 26% increase over the current General Fund appropriation).
  • Includes, for the first time, a tuition restraint prerequisite (similar to the one for universities) that conditions receipt of metric funding on limiting FY 2014-15 tuition and fee increases for resident students to 3.2%.

Senate:

  • Concurs with the governor on the increase in operational and performance funding.
  • Appropriates more money from the General Fund ($323.9 million) than the governor, and less from the School Aid Fund ($47.6 million).
  • Does not include the governor’s recommended tuition restraint provision.

House:

  • Concurs with the governor on the increase in operational and performance funding.
  • Concurs with the governor on the amount of funding from the General Fund ($173.9 million) and from the School Aid Fund ($197.6 million).
  • Does not include the governor’s tuition restraint provision.
  • The House Appropriations Committee included boilerplate, supported by the League, and a $100 placeholder to develop a program by which students could obtain a GED at a community college free of charge if committing to enroll in an academic or vocational program. The state would reimburse community colleges for eligible costs associated with providing the GED programs or testing. The boilerplate language and placeholder were removed on the House floor.

Final Budget:

  • Increases community college operations by $8.9 million. Continues to use money from the School Aid Fund for more than half of the total community college funding (operations plus employee retirement system payments), with $167.1 million from the General Fund and $197.6 million from the School Aid Fund.
  • Does not include tuition restraint provision.
  • Does not include House budget language establishing a new program by which students could obtain a GED at a community college free of charge.

Universities

Governor’s Budget:

  • Increases the total appropriation for university operations by $76.9 million (6.1%) over the current fiscal year. As in previous recent years, this increase is in the form of performance funding, though the formula has been modified so that half of the increase goes proportionally to universities to make up for funding lost in 2012.
  • Includes a new performance metric that rewards institutions based on the number of students receiving Pell Grants, a positive change that attempts to encourage universities to become more accessible to low-income students.
  • Continues the practice begun two years ago of requiring universities to limit tuition increases to 3.2% or less in order to receive any performance funding. This “tuition restraint” prerequisite for receiving performance funding helps to keep postsecondary education affordable for low-income students.

Senate:

  • Concurs with the governor in increasing the total appropriation for university operations by $76.9 million (6.1%) over the current fiscal year.
  • Concurs with the governor’s performance funding and tuition restraint changes.

House:

  • Increases university operations funding by $70.4 million (5.6%) over the current fiscal year.
  • Concurs with the governor’s performance funding and tuition restraint changes.

Final Budget:

  • Increases university operations by $74.6 million (5.9%) in performance funding, an amount slightly lower than what was proposed by the governor. Despite the increase, the total General Fund appropriation for universities remains lower than that of all fiscal years from FY 2001 to FY 2011.
  • Includes the governor’s new Pell Grant indicator for performance funding.
  • Maintains the governor’s 3.2% tuition restraint requirement for receiving performance funding.

Financial Aid

Michigan’s three financial aid grants are funded through the Higher Education budget even though students at community colleges and private, not-for-profit institutions are also eligible.

Governor’s Budget:

  • Increases the Tuition Incentive Program by $1.5 million over the current fiscal year, for a total of $48.5 million. The increase is entirely from the General Fund, but $43.8 million (90%) of total funding for TIP is from the state’s TANF funds.
  • Provides total funding for all financial aid grant programs of $103.1 million, some of which comes from the federal Temporary Assistance for Needy Families allocation.
  • Does not increase the Michigan Tuition Grant program, but adds a requirement that independent colleges submit data, including student performance data (Tuition Grant students enrolled in remedial education and/or completing degrees, Pell Grant students completing degrees), to the P-20 system in order to participate in the Tuition Grant program—a change supported by the League.

House:

  • Increases the Tuition Incentive Program by $1.5 million over current year, and the Michigan Tuition Grant by $1.8 million over the current year.
  • Includes the governor’s P-20 data reporting requirement for participation in the Tuition Grant program.

Senate:

  • Increases the Tuition Incentive Program by $1.5 million over current year.
  • Does not increase the Michigan Tuition Grant. Requires only that participating independent colleges submit data on students receiving the Tuition Grant, instead of including the governor’s proposed requirement that they submit data on all students.

Final Budget:

  • Increases funding for the Tuition Incentive Program by $1.5 million (3.2%) to a total of $48.5 million, 90% of which is paid out of Michigan’s TANF block grant.
  • Increases funding for the Michigan Tuition Grant by $1.9 million (5.9%) and includes the Senate’s data reporting requirement rather than that proposed by the governor. Complete data reporting to Michigan’s P-20 longitudinal data system is crucial for evaluating strategies to help at-risk and low-income students, so it is hoped that the governor’s requirement will be in the final budget next year.
  • Maintains $18.4 million in funding for the Michigan Competitive Scholarship, which is merit-based as well as need-based. Although it is awarded to students who are not low-income as well as to those who are, all of this funding comes from Michigan’s TANF block grant.

Community Health Budget Invests in Healthy Workforce

 

For a state to prosper, it must have healthy residents. For individuals to prosper, they must be healthy and have access to the healthcare services they need. The Department of Community Health budget for the year that begins Oct. 1 provides substantial investments to achieve a healthy population and healthy workforce.

The budget includes full-year funding for the Healthy Michigan Plan (Michigan’s Medicaid expansion program), continues expansion of Healthy Kids Dental to Kalamazoo and Macomb counties, continues half of the primary care provider rate increase implemented in 2013, includes funds to begin implementation of the Mental Health and Wellness Commission recommendations, restores funding for senior meals and services, increases Medicaid obstetric payments for both the doctors and some hospitals and expands Medicaid coverage of breast pumps. The budget also funds a number of initiatives or pilot programs to improve the health and health outcomes of Michigan residents.

Potential funding shortfalls for Medicaid health plan services, as well as public mental health services, were identified during the budget process. A reserve fund for managed care plan services was included in the final budget to cover new costs health plans will be responsible for under the Affordable Care Act. No additional funding was included in the final budget for non-Medicaid mental health services as the Senate-recommended additional funding of $4.8 million was ultimately rejected.

The controversy about adequacy of funding to maintain the same level of services for non-Medicaid eligible recipients continues. A Senate Fiscal Agency memorandum, released on June 19 concludes: “There are legitimate reasons to be concerned whether FY 2014-15 funding for CMH non-Medicaid services is sufficient to maintain services at the same level as in prior years.” This issue must be resolved to ensure services and programs are not reduced or eliminated for those fragile and vulnerable populations who depend on them.

The Health Insurance Claims tax shortfall of $110 million was resolved in the final budget through the restoration of the previous use tax on Medicaid managed care organizations rather than by adding state General Funds. The claims tax shortfall has created a funding problem in each of the last three fiscal years.

Of concern is the practice of taking ongoing program funding and reclassifying it as “one-time” funding as has been done with graduate medical education and several other programs over the last few years, making program planning and administration very difficult. Long-term success, requires long-term investments.

The Community Health budget is the state’s largest, growing by over 72% between Fiscal Years 2006 and 2015. Of note, the state General Fund investment has only increased 9% over the Fiscal Year 2006 appropriation. This year, federal funds make up nearly 70% of the budget. The bulk of the total funding, nearly three-fourths, is for the state’s Medicaid and Healthy Michigan Plan programs.

Medicaid

Approximately one in every five Michigan residents is enrolled in Medicaid for their healthcare coverage, and more than half of all births in the state are paid for by the program. In each of the last three years, half of the children in the state have been covered by Medicaid as child poverty in Michigan continues to increase.

In the current fiscal year, the governor projects that 1.82 million Michigan residents will be covered by Medicaid, and recently set a target of enrolling 322,000 individuals in the Healthy Michigan Plan that opened for enrollment on April 1. Program enrollment is off to a great start with more than 315,000 individuals enrolled as of June 30, 2014.

Governor’s Budget:

  • Provides full-year funding of $2.2 billion, all federal funds, for the Healthy Michigan Plan, along with 36 new positions to administer the program. The Healthy Michigan Plan, championed by Gov. Snyder, provides comprehensive healthcare coverage to individuals with incomes up to 133% of the federal poverty level ($15,521 for an individual, $31,721 for a family of four).
  • Recognizes state General Fund savings of over $243 million as a result of Michigan’s implementation of the Healthy Michigan Plan. The savings are realized because the state previously spent 100% state funds for limited services to very low-income uninsured individuals, and with the expansion, federal funds will be available to pay for services for this population. The governor recommends that half of the savings, or $122 million, be placed in a newly created Health Savings Fund that would ensure that the state has sufficient funds to cover future reductions in federal matching funds. Healthy Michigan Plan funding is 100% federal for calendar years 2014, 2015, and 2016. The federal funding declines during calendar years 2017- 2019, reaching 90% in 2020, where it remains.
  • Includes $25.2 million for autism services, down from $35.2 million in the current year. The funding reduction is not a program reduction, but reflects a slow start-up for the program due to the need to develop provider capacity. To increase needed capacity, $3 million in continuing “one-time” funding– increased from $2 million in the current fiscal year–is recommended to train autism services providers through the creation of university autism centers. In Fiscal Year 2014, grants of $500,000 each are allocated to Eastern Michigan, Western Michigan, Central Michigan and Oakland universities. The Fiscal Year 2015 recommendation allocates $1 million each to Eastern Michigan, Western Michigan and Michigan State universities.
  • Recommends $26 million in state funds, bringing in $49.4 million in federal funds, to continue approximately half of the rate increase for primary care providers. This rate increase, which brings Medicaid rates up to Medicare levels, is required by federal law in calendar years 2013 and 2014, and is 100% federally funded. In calendar year 2015, the rate increase is no longer required or 100% federally funded, so a state investment is required to continue.
  • Eliminates $35.6 million in special payments for rural and sole community hospitals, saving $12 million in state General Fund. These funds were classified as “one-time” funding in Fiscal Year 2012, but converted to ongoing funding for Fiscal Years 2013 and 2014.

House:

  • Concurs with the governor’s recommendation for full-year funding for the Healthy Michigan Fund, as well as the additional staff to administer the program, but creates a separate staffing line-item.
  • Concurs with the governor on state General Fund savings of over $243 million as a result of implementation of the Healthy Michigan Plan.
  • Concurs with the $10 million budget reduction in autism services, but does not concur with the recommended increase in university training funds. The House reduces the training funding from $2 million to $1.5 million in “one-time” grants, and specifies $500,000 in continuing grants to Eastern and Western Michigan universities and adds $500,000 for Michigan State University.
  • Concurs with continuing a portion of the primary care provider rate increase, but recommends a lower level of funding — $21.4 million in state funds and $40.7 million in federal funds.
  • Rejects the Executive recommendation to eliminate special payments to rural and sole community hospitals, and recommends continuation funding with a new mix of funds, including provider taxes and federal funds—maintaining the state General Fund savings proposed by the governor.

Senate:

  • Concurs with the governor and the House on full-year funding and additional staffing, in a new line-item, for the Healthy Michigan Plan.
  • Concurs with the governor and the House on state General Fund savings of over $243 million from implementation of the Healthy Michigan Plan.
  • Concurs with the $10 million budget reduction in autism services, and recommends that $4 million from the Autism Coverage Fund be used to replace $4 million in General Fund. This would require a law change. The Senate also recommends increases rather than reductions in university training funds. The Senate restores funding of $500,000 each to Central Michigan and Oakland universities, concurs with the governor on the $1 million grants each to Eastern Michigan, Western Michigan and Michigan State universities, and adds $1.5 million for “autism navigators” to assist families in choosing treatment and services.
  • Concurs with the governor on the primary care provider rate increase.
  • Rejects the Executive recommendation to eliminate special payments for rural and sole community hospitals, and recommends continuation with the current financing of state and federal funds.

Final Budget:

  • Includes full-year funding, all federal funds, for the Healthy Michigan Plan as well as 36 new positions to administer the program.
  • Includes state General Fund savings of $232 million in recognition of previously state-funded services provided to newly eligible Healthy Michigan Plan enrollees that will be covered by the federal government. The governor recommended that half of the savings be deposited in a healthcare savings account to be used in future years when the state must contribute a small percentage of the cost of the Healthy Michigan Plan. Due to the reduced May 2014 revenue projections, that deposit will not be made.
  • Includes $25.2 million for autism services, a reduction of $10 million in recognition of the slow start-up of the program and the need to develop provider capacity. This is not a program reduction. In addition, $5.5 million in new funding from the Autism Coverage Fund is added to $3 million in state General Funds ($1 million new funds) to provide grants for university autism centers to provide research, education and training, as well as a new support program for families. University grants include: $4 million to Western Michigan University Autism Center for Excellence, $1 million each to Michigan State and Eastern Michigan Universities, $500,000 each to Central Michigan and Oakland Universities. The $1.5 million family support program will assist families in choosing service and treatment options. The new funding is designated as one-time funding.
  • Includes funding to continue about half of the primary care rate increase implemented in calendar year 2013. A state investment of $25 million is included to continue a portion of this key provider rate increase.
  • Continues $35.6 million for special payments for rural and sole community hospitals.
  • Provides an increase in obstetrical service payments to physicians ($4.8 million in state funds, $9 million in federal funds) and to qualifying rural hospitals ($3.8 million in state funds, $7.2 million in federal funds). Over the last several years, many hospitals have closed their obstetrical units due to low Medicaid reimbursement, leaving many communities without obstetrical services.
  • Includes funding of $1.7 million in state funds, $3.3 million in federal funds to recognize the impact of the recently passed minimum wage increase on the Adult Home Help program.
  • Provides a 6% rate increase for adult foster care personal care services.
  • Transfers $4.3 million in Graduate Medical Education funding from one-time back to ongoing funding.
  • Does not include Senate-recommended restoration of funding for the Harper/Hutzel Hospital’s special payment. The hospital operates an infant mortality program with the National Institutes of Health, and has indicated it would maintain the current focus on improving the health status of women and children.

Healthy Kids Dental

Michigan currently provides enhanced dental services to more than 500,000 children in 78 counties. Access to dental services is essential to prevent tooth decay, the NO. 1 chronic disease in children. Healthy Kids Dental improves access to care by partnering with Delta Dental of Michigan to increase provider reimbursement rates and simplify administration. With Michigan’s dismal ranking in the Race for Results for African American children, expanding Healthy Kids Dental to the remaining counties presents a tremendous public policy opportunity.

Governor’s Budget:

  • Includes $5.4 million in state General Fund and $10.3 million in federal funds to expand the Healthy Kids Dental program to an additional 100,000 children in Kalamazoo and Macomb counties. With that expansion, the program would cover over 611,000 children in 80 of 83 Michigan counties. Not yet covered are more than 400,000 children in three of the most populated Michigan counties that are the home to many low-income children and children of color, including Wayne, Oakland and Kent counties.

House:

  • Concurs with the governor and makes no recommendation to expand Healthy Kids Dental to the remaining counties.

Senate:

  • Concurs with the governor and the House on Healthy Kids Dental funding and makes no recommendation to expand the program to the remaining counties.

Final Budget:

  • Includes $15.7 million recommended by the governor to expand Healthy Kids Dental to Kalamazoo and Macomb counties, covering an additional 100,000 children. However, more than 400,000 low-income children in Wayne, Kent and Oakland counties are left behind, nearly 40% of the eligible children.

Mental Health and Substance Abuse Services

Since Fiscal Year 2005, Medicaid-related mental health spending has increased by over 50%, while non-Medicaid spending has decreased, leaving thousands of residents without needed services. Funding for substance use disorder services increased by 12%, largely because of increases in federal funding, but fewer individuals were served in Fiscal Year 2013 than in the previous 9 years, despite the growing problem with heroin and other opiate addictions.

Governor’s Budget:

  • Supports the Healthy Michigan Plan, and with the expansion of Medicaid eligibility, enrolled individuals will also have access to comprehensive mental health and substance use disorder services. Again, great concern has been raised about the adequacy of the funding to provide the promised services.
  • Recommends $15.6 million in state General Fund, $5 million of which is “one-time” funding, to begin implementation of the recommendations of the Mental Health and Wellness Commission, which released its recommendations for improvements in mental health services in January 2014.
  • Recommends $3.4 million in state General Fund for the Mental Health Diversion Council to treat those with mental illness or developmental disabilities in settings other than the criminal justice system. Additional funding of $2.7 million is included in the Judiciary and Corrections budgets.

House:

  • Concurs with the Executive recommendation to expand mental health and substance use disorder services through the Healthy Michigan Plan.
  • Concurs with the governor on $15.6 million in state funding to implement Mental Health and Wellness Commission recommendations, and also adds potential federal funding (yet to be identified), to increase programming capacity by $22 million.
  • Concurs with the governor and adds $3.4 million in state General Fund for the Mental Health Diversion Council.

Senate:

  • Concurs with the governor and the House on expansion of services through the Healthy Michigan Plan, and also adds $4.8 million General Fund for community mental health non-Medicaid services.
  • Adds $100 placeholders for additional legislative discussions on expanded funding to implement the recommendations of the Mental Health and Wellness Commission.
  • Includes a $100 placeholder for additional funding for the Mental Health Diversion Council.

Final Budget:

  • Includes federal funding to cover mental health and substance use disorder services for the newly eligible Healthy Michigan Plan enrollees. Savings associated with the implementation of Healthy Michigan Plan were reduced $16 million in recognition of lower projected mental health savings. However, as mentioned above, there has been considerable controversy about the adequacy of remaining state funding to maintain the same level of services for non-Medicaid eligible individuals, and services not funded by the Medicaid program. State funds for non-Medicaid/Healthy Michigan Plan services were reduced by two-thirds.
  • Includes $14.3 million in state funds and $22.2 million in federal funds to begin implementing the recommendations of the Mental Health and Wellness Commission. Of the appropriated amounts, $5 million of the state funds and $4 million of the federal funds are classified as one-time funds.
  • Includes $3.4 million to implement recommendations of the Mental Health Diversion Council to treat those with mental illness or developmental disabilities in settings other than the criminal justice system.

 Public Health and Children’s Services

Nearly two of every three dollars spent on public health services is federal. Over the last decade, nearly all increases in total public health funding have been from federal grants or other sources, while state funding has remained essentially flat.

Governor’s Budget:

  • Recommends continuation funding of $39.4 million for local public health services. Appropriations for local public health essential services, while increased by $2 million in Fiscal Year 2014, remain below the Fiscal Year 2005 appropriation.
  • Includes $2.5 million in state funds to conduct a regional needs assessment and expand home visiting services to at-risk families with young children in rural areas in the Upper Peninsula and Northern Lower Peninsula.
  • Includes $2 million in “one-time” state funding for a pilot program to improve child and adolescent health services by working with two existing school-based clinics to identify satellite locations that will be serviced by mobile teams, increasing access to nursing and behavioral health services in schools.
  • Increases the essential health provider program by $600,000 to reflect projected additional private revenue. This program assists primary care providers who practice in medically underserved areas with the repayment of their educational loans.

House:

  • Provides a $1.5 million state General Fund increase for local public health services, bringing total funding to the level of the Fiscal Year 2005 appropriation.
  • Concurs with the governor by adding $2.5 million for home visiting services in rural areas, but funds the expansion with federal (TANF) funds, rather than state funds.
  • Concurs with the governor on adding $2 million for a child and adolescent health services pilot program, but funds with federal (TANF) funds, rather than state funds.
  • Concurs with the governor by increasing the essential health provider program by $600,000.

Senate:

  • Includes a $100 placeholder for discussion of the House-recommended expansion of funding for local public health services.
  • Concurs with the House by adding $2.5 million in federal TANF funds for home visiting services in rural areas, and also adds a $100 placeholder for a potential funding increase for evidence-based home visiting.
  • Concurs with the House by adding $2 million in federal TANF funds for a child and adolescent health services pilot program.
  • Concurs with the governor and House, adding $600,000 in private funds for the essential health provider program, and also adds $500,000 in state General Fund.

Final Budget:

  • Includes $1.5 million in state funds to bring total funding for local public health operations back to the level of the FY2005 appropriation.
  • Includes $2.25 million in state funds to expand home visiting programs in northern Michigan and the Upper Peninsula to pregnant women and families with children up to age 5. A regional needs assessment will identify sites and potential participants.
  • Includes $1.5 million to test a new financing tool for certain services in limited target areas. Known as Social Impact Bonds, but referred to as Pay for Success Contracts in the Community Health budget, the goal is to deliver needed services in an innovative manner that improves outcomes and reduces government costs. Non-governmental organizations provide up-front funding and assume the risk for programs that are developed and delivered by non-profit organizations.. Government payments are then made only when performance measures are achieved and savings are documented. The Fiscal Year 2015 pilot projects will focus on home visiting programs for mothers and infants, and community supports in high risk neighborhoods.
  • Includes $100,000 state General Fund to increase the Pregnancy and Parenting Support Program to $800,000.
  • Includes $150,000 state General Fund to increase diabetes prevention funding to $800,000.
  • Includes $150,000 state General Fund to establish a pilot program to provide more comprehensive services and supports to individuals with Alzheimer’s disease to enable them to remain in their homes as long as possible, delaying potential moves to long term care facilities.
  • Includes $100,000 state General Fund to increase the Pregnancy and Parenting Support Program to $800,000.
  • Includes $150,000 state General Fund to increase diabetes prevention funding to $800,000.
  • Includes $150,000 state General Fund to establish a pilot program to provide more comprehensive services and supports to individuals with Alzheimer’s disease to enable them to remain in their homes as long as possible, delaying potential moves to long term care facilities.
  • Includes $2 million, classified as one-time funds, for a pilot project to increase child and adolescent access to nursing and behavioral health services using two existing school clinics as hubs with mobile health teams serving satellite locations.
  • Includes $1.1 million in new funding for the essential health provider program. About half of the funding is state General Fund, the remainder is private funds.
  • Includes $200,000 in state funds to support efforts to combat human trafficking in Michigan.
  • Includes $500,000 in additional funding to create more healthy homes through lead abatement.
  • Includes $500,000 for breast cancer screening and services. These funds represent a partial restoration of the prior Health and Wellness funded services. All funds for “cancer prevention and control” services from the Health and Wellness fund were eliminated in the current fiscal year.

Services for the Aging

Governor’s Budget:

  • Includes $5 million in state funds to help eliminate the waiting list of an estimated 4,500 seniors eligible for home-delivered meals ($1.8 million) and in-home services ($3.2 million) provided through Area Agencies on Aging around the state. With this increase in home-delivered meals, the reductions in funding over the last decade have been completely restored.
  • Expands funding by $9 million in state funds, $17.2 million in federal funds, to eliminate the waiting list for the MIChoice program that provides in-home and community services to help seniors or those with disabilities remain in their homes rather than moving to nursing homes, serving an additional 1,250 individuals.
  • Recommends the expansion of PACE (Programs for All-Inclusive Care for the Elderly) to more counties, expanding sites to Flint, Lansing, and Saginaw, with funding from corresponding savings in nursing home costs.

House:

  • Concurs with the governor, adding $5 million for home-delivered meals and in-home services for seniors.
  • Concurs with the governor by expanding the MIChoice program by $9 million in state funds and $17.2 million in federal funds.
  • Concurs with the governor on the expansion of the PACE program.

Senate:

  • Concurs with the governor and House, adding $5 million for home-delivered meals and in-home services for seniors.
  • Concurs with the governor and House by expanding the MIChoice program by $9 million in state funds and $17.2 million in federal funds.
  • Concurs with the governor and House on the expansion of the PACE program.

Final Budget:

  • Includes $5 million for home-delivered meals and in-home services for seniors.
  • Expands the MIChoice program to eliminate waiting lists and allow seniors and those with disabilities to remain in their own homes or the community rather than moving to nursing homes by adding $9 million in state funds and $17.2 million in federal funds.
  • Expands PACE (Program for All-Inclusive Care for the Elderly) to Flint, Lansing, and Saginaw, and Muskegon funded by projected savings from reduced nursing home utilization.

Right Start in Michigan 2014: Maternal and Infant Well-Being in Michigan’s Legacy Cities

 

 

  

As Michigan retools for a post-industrial economy, it must address the needs of its legacy cities. These cities have borne the brunt of the state’s long sustained economic decline and dwindling resources, but they continue to be the home for a substantial share of young children. On a range of indicators of maternal and infant well-being babies born to women living in these cities are much worse off than those born in the out-county areas.

Substantial numbers of children are affected. In 2012 roughly one-quarter of all newborns in the state were born to mothers living in these 15 cities across the southern half of the state.1 On average, one of every three county births was to a legacy city resident. To improve the lives of young children, the well-being of mothers and infants in these cities must be addressed.

Despite their decline, these 15 cities still have the largest number of births among the cities in their counties.2 While Detroit had by far the largest number of births (over 10,000) among the cities, representing slightly less than half of all births in Wayne County, the cities of Lansing (Ingham) and Battle Creek (Calhoun) had the majority of births in their counties. Clearly the fate of these legacy cities not only affects the current and future well-being of many children but also the social and economic fate of the state.

Racial/Ethnic Diversity is Concentrated in Michigan’s Legacy Cities and Their Counties.

The diversity of Michigan’s newborns is concentrated in its 15 legacy cities and their counties. While these cities have only 18% of the total state population, they house one-quarter of all births and half of all infants born to mothers in communities of color. Furthermore, almost all (90%) of the state’s infants born to women of color were located in the 15 counties where Michigan’s legacy cities are situated.

In four of the 15 Michigan legacy cities, the majority of infants were born to women of color, and almost all the legacy cities experienced an increase in minority births between 2006 and 2012. Only Grand Rapids, Holland and Ann Arbor experienced slight decreases over the trend period.3 While the state’s largest city, Detroit, had the largest concentration of infants born to women of color—over 90%, Warren in Macomb County sustained the steepest jump (70%)—minority births rose from 22% to 38% of all births.  

While the percentage of infants being born to women of color increased in the legacy cities, the overall number of births decreased with the largest declines occurring in the cities of Muskegon and Jackson where births dropped by roughly one-third between 2006 and 2012. Warren, with the largest increase in diversity among its infants, experienced the smallest drop in its births—only 4%.

Women Giving Birth in the Legacy Cities Are More Likely to be Uninsured and Low-Income.

The trends in the numbers of births, the racial/ethnic diversity and economic status of mothers of newborns all shape the well-being of the next generation. Women residing in the legacy cities were much less likely to have health insurance and incomes adequate for basic needs. In 2012 just over three of every five women who had a baby while living in one of the legacy cities qualified for Medicaid compared with two of every five in the out-county areas in the 15 counties. While income eligibility for Medicaid extends to almost double the poverty level (185%) for uninsured pregnant women, coverage for the mother at this income level ended six weeks after delivery and for the baby after the first year of life.4

Access to health care for women will significantly improve under the Affordable Care Act that requires comprehensive services, including preventive services at no cost and maternity benefits that have not been generally included in private coverage. The Healthy Michigan Plan will provide comprehensive coverage, including dental and vision, with minimal copays for those with income up to 133% of the federal poverty level.5 For women with income above that level, coverage is available through the market place with sliding scale premiums and cost-sharing subsidies.

Overview of Maternal/Infant Well-Being in Michigan’s Legacy Cities.

Michigan’s legacy cities have many characteristics in common but the ranges on the following eight key measures for maternal and infant risk (see table above) also reflect substantial differences among the cities. For example, Ann Arbor had lower risk on most measures than those in the out-county. In contrast, the cities of Pontiac, Flint and Detroit have some of the highest levels of risk for mothers and infants among the cities and were worse on every measure than their out-county areas.

Overall, the legacy cities had worse outcomes than their out-county areas on the eight key measures of maternal and infant well-being tracked in this report. Three indicators reflected dramatically worse conditions for mothers.6 Compared with infants born to women from out-county areas, those in the legacy cities were:

  • more than twice as likely to be born to women without a high school diploma or GED,
  • roughly twice as likely to be born to a teenager and
  • nearly twice as likely to be born to a single parent.

In contrast, a legacy city infant had only a 20% higher risk than an out-county peer of being born too soon. These inequities in birth circumstances get amplified as children spend their growing up years in communities with sparse resources and intensify over time as fewer state-supported early prevention and intervention programs are available.

Trends in maternal and infant well-being moved in the same direction for the legacy cities and their out-county areas, only the changes are more dramatic in the cities on four of the five measures.7 Only the largest change in the out-county areas—the 25% increase in births to single women—reflected a more substantial change than the cities.

Overall for both groups only two of the five risks—teen births and repeat teen births—have declined while percentages of unhealthy births and those to unmarried women have risen. The most disturbing finding was the dramatic (24%) increase in the percentage of babies born too soon among women in the legacy cities although the 15% average increase in out-county preterm births should also be a cause for concern. The next sections review each indicator in more detail across the 15 legacy cities.

1. Teen births declined in all but one legacy city.

The percentage of teen births averaged 13% of live births across the legacy cities, and the cities with the largest percentages –Saginaw, Detroit and Flint –reflected only slight decreases over the trend period.8 While it is troubling to see the minimal decline in teen childbearing in the cities with the largest percentages of births to this age group, some cities, such as Jackson, Bay City and Lansing experienced substantial progress on this measure between 2006 and 2012. Furthermore, among the legacy cities only Warren experienced an increase in its share of births to teens although it still had the second lowest percentage (9%). Ann Arbor had by far the smallest percentage of births to teenagers—only 2% compared with 9% in Warren (the second smallest percentage).

Large percentages of births to teenagers in a community strain resources as these young women and girls are also more likely to be single and lack a high school diploma or GED. Most will not be able to compete for a job that has a wage that will allow them to support themselves and a child. Low-income women struggle to afford child care. The average cost of infant care from a licensed provider in Michigan, ranging from $529 a month in a family home to $756 in a day care center, would consume nearly half or more of the gross income from a full-time minimum wage job ($7.40 an hour or $15,392 annual). Michigan’s child care subsidy program with its per-hour payments, administrative intricacies and low rates fails to assist most low-income parents.

2. In roughly half the legacy cities one of every four teen births was to a teen already a parent.

While having a baby as a teenager can pose a major hurdle to finishing an education and getting post-secondary training, a second or third baby further intensifies parental responsibilities that can interfere with school or work—critical activities for a successful transition to adulthood. The higher costs of child care for additional children may also present a significant barrier to securing work or going to school.

In seven of Michigan’s legacy cities roughly one of every four teen births was to a teen who was already a parent. The seven cities with the highest percentages of births to teens who were already parents were within a few percentage points. The city of Jackson had the worst rate with 26% of teens giving birth being parents while Bay City and Warren had the lowest percentages, 14% and 15% respectively—still substantially higher than the state average (9%).

Bay City had the largest decrease on this measure— 37% decline over the trend period— while Jackson and Battle Creek saw their rates bump up by 12%.9

3. Non-marital births rose in all but one legacy city

While the condemnation of child-bearing among unmarried women has eased compared with previous generations, children in mother-only families in Michigan face substantial challenges to their well-being. In today’s economy most families require more than one wage earner to meet the cost of basic needs such as housing, transportation and food. Numerous studies have demonstrated that an income of double the poverty level is required (roughly $36,000 for a family of three and $44,000 for a family of four). 10

Fathers who do not acknowledge paternity may not be involved in supporting their offspring financially. Lack of support from absent parents weakens economic security for single mothers and their children since women, especially mothers, earn less than their male counterparts in similar jobs. Furthermore single parents often struggle to combine job and parental responsibilities, particularly in low-wage employment.

Non-marital births are concentrated among younger women and those with a high school degree or less, who are more likely to work in these jobs that rarely offer any flexibility or vacation or sick time. Roughly 60% of Michigan women with a high school diploma/GED who gave birth in 2013 were single compared with only 10% of those with a bachelor’s degree. Half of women with less than a high school education lose their jobs or quit after having a baby.11

Finding or affording child care can be a challenge to sustained employment. The average cost of infant care, which requires a lower ratio per provider, can easily exceed over half the net income from a minimum wage job. Michigan’s child care subsidy payment falls well below the average cost and requires extensive online documentation by the parent and provider.

A growing number of young children live in single parent households, not only in the state but in the legacy cities. Births to single women increased between 2006 and 2012 in all legacy cities except Ann Arbor, with the largest increase (41% higher) occurring in the city of Warren. In the four cities with the highest rates, three or more of every four births were to unmarried women.

 4. On average, roughly one of every five babies in the legacy cities was to a woman with no high school diploma or GED.

The four cities with the largest percentages of births to unmarried women also had the largest percentages of births to women who had no high school diploma or GED: one of every three newborns in Pontiac and Detroit was born to a mother without a secondary education completion credential. Ann Arbor had the lowest rate (3%) by far: The second lowest (15%) in Warren was five times higher.

 Without strong programs to help these mothers continue or complete their education and gain some postsecondary training, they will be hard-pressed to earn enough to support themselves and their children. Their only options will be low-wage jobs with little or no flexibility, vacation or sick time so their ability to engage in the health and education needs of their children will be compromised.

 

 

 5. One of every four babies was born to women who smoked during pregnancy.

Michigan has one of the highest smoking rates in the nation (23% vs. 19% US) yet spends just over $ 1 million on prevention, and well over half of the funding for its prevention programs comes from federal funds. Even more disheartening, none of the $279 million from the tobacco settlement is allocated to staunch tobacco use and its deadly consequences on children and families. The Centers for Disease Control and Prevention recommends investing at least 15% of tobacco settlement funds in a well-sustained multi-media campaign, an approach that has demonstrated success.

Smoking endangers not only the health of the prospective mother by elevating her risk for cancer, heart disease and other health problems, but it also heightens the likelihood her baby may be born too soon, too small or have birth defects. Tobacco’s harmful chemicals such as tar, nicotine and carbon monoxide, reduce oxygen supply to the baby, slowing growth and development.

Secondhand smoke also harms mothers and children. It can precipitate respiratory ailments in infants and young children who live in homes where adults smoke. While roughly 22,000 Michigan women who gave birth in 2013 reported smoking during their pregnancy, in more than half these households someone else smoked as well. An additional 8,000 stated that although they did not smoke during the pregnancy, another adult in the house did. With more restrictions on smoking in public and work spaces secondhand smoke exposure has been drastically reduced for pregnant women and young children.

Bay City had the largest percentage of births to women who reported smoking during their pregnancies—roughly two of every five newborns were affected—while Ann Arbor had the smallest percentage (8%). Port Huron, Saginaw and Jackson also had relatively large percentages of births to women who smoked during pregnancy—with almost two of every five newborns affected. 

6. One of every 20 Michigan mothers in legacy cities received late or no prenatal care.

Pregnant women who start prenatal care in the last three months of their pregnancy or not at all heighten their risk of having babies with health problems and suffering from complications themselves. Women who do not receive prenatal care are more likely to give birth to a low-birthweight baby. Unfortunately the women at highest risk of unhealthy births are often the least likely to have access to timely prenatal care. Multiple barriers such as lack of insurance, unintended pregnancy, limited access to transportation, variable work schedules and traditional clinic hours can stand in the way.

The expansion of eligibility under the Healthy Michigan Plan to all state residents with incomes below 133% of the poverty level will provide low-income women better access to health services before pregnancy to address chronic conditions that can compromise a healthy birth. Similarly, residents with income above 133% of poverty level can access private coverage through the Health Insurance Marketplace with sliding scale federal subsidies and cost-sharing assistance.

Among the legacy cities Detroit has the highest rate of late or no prenatal care with roughly 1 of every 11 mothers of newborns affected. In Bay City the percentage of mothers with late or no prenatal care was one-third (3%) of the Detroit rate.  

7. One of every 10 babies in Michigan’s legacy cities was born too small.

Babies who weigh less than 5 pounds 8 ounces at birth encounter heightened risk for developmental delay, chronic disease and even death. It is the leading cause of infant mortality among African American infants, who are roughly 2.5 times more likely to die before their first birthday compared with white infants. While chronic maternal health issues such as infections, diabetes, heart defects or kidney disease can result in an underweight infant, stress, poor nutrition and lack of social support during the pregnancy have also been identified as critical factors.

Although Ann Arbor had one of the smallest percentages of babies weighing less than 5.5 pounds, the city rate sustained the largest increase (27%) in its rate over the trend period. All but three legacy cities saw larger percentages of babies born too small. Among these three the city of Kalamazoo had the most substantial decline (20%), the Detroit rate improved only slightly (4%) and the Saginaw rate remained the same. 

8. Roughly one of every eight babies in Michigan’s legacy cities was born too soon.

Babies born before 37 weeks in the womb are considered preterm and experience higher risk of intellectual disabilities, cerebral palsy, hearing loss and problems with breathing, vision and digestion than babies born at term. Prevention of premature delivery has become a major focus in efforts to reduce infant mortality. Babies born too soon are often too small as well.

All but two of Michigan’s legacy cities have preterm birth rates in the double digits, and most (11) saw sharply escalating rates over the trend period. In fact, in the two cities—Flint at 19% and Saginaw at 18%—with the highest rates, rates almost doubled between 2006 and 2012. Four of the five cities with the lowest rates experienced the most substantial declines, with Lansing having by far the largest drop (20%). The exception was Ann Arbor where the rate was still the lowest but had jumped up over the trend period.

Summary

As Michigan looks to strengthen its economy and improve education outcomes among the next generation, it must address the challenge of ensuring more infants have the right start to early childhood in its legacy cities. These cities house a significant number of young children, particularly some of the most economically disadvantaged and those in communities of color. Roughly half of the state’s children of color live within these cities.

The number of births in these legacy cities ranges from slightly less than 500 in Bay City and Port Huron to over 10,000 in Detroit, which represents 40% of all births in the legacy cities. On average, roughly one of every three births in the 15 counties is to a mother in the legacy city.

All of the legacy cities except Ann Arbor reflected worse outcomes across most or all indicators for mothers and their babies than for their counterparts in the rest of the county. Ann Arbor with its large public university and highly educated population is well-suited to compete in the emerging post-industrial economy. Overall Ann Arbor was an anomaly among the legacy cities in that on most (6) measures of maternal/infant well-being, the city was better than the rest of Washtenaw County: It matched the out-county rate only for late or no prenatal care and low-birthweight babies. The relative affluence of the city contrasts sharply with the average legacy city: Only 18 percent of the city’s women giving birth were uninsured and low-income, substantially below the legacy city average (63%).

Unfortunately several cities consistently fell on the other end of the range. Flint, Saginaw, Detroit and Pontiac were often those with the worst rates. For example, although Flint had the worst outcomes for babies born too soon or too small, Pontiac and Detroit had rates within 1 or 2 percentage points on both those measures. The cities with majority of births to women of color generally had the worst outcomes. Only the incidence of smoking during pregnancy deviated from this pattern with Bay City having by far the largest percentage of births affected, which was 6 percentage points above the next largest (43% vs. 37%).

Only two of the five indicators where a trend could be calculated showed improvement. The most consistent progress across the legacy cities was on the declining percentage of births to teens. Only Warren in Macomb County experienced a worsening trend. Similarly, only six cities sustained increased births to teens who were already parents. On the other hand, unhealthy births— babies born too soon or too small— increased over the trend period in 11 of the 15 legacy cities.12 These children are at higher risk for developmental delays, chronic health problems and even death as infants than children born at term with All cities except Ann Arbor sustained an increase in the percentage of births to unmarried women between 2006 and 2012.

Recommendations

Provide the funding to fully implement the strategies in the state’s Infant Mortality Reduction Plan. All of the indicators examined in this report reflect a risk to mother and infant, and several are addressed in the state’s Infant Mortality Reduction Plan 2012 that outlined eight strategies to reduce infant mortality in Michigan.13 The strategies include promoting safe sleep practices for infants, expanding home visiting to high-risk women and reducing unintended pregnancies. Unfortunately, in the last two budgets policy makers have allocated only a tenth of the funding required to fully implement the plan.

Coordinate efforts across state departments to address the social/economic determinants of health, especially in the target cities – Pontiac, Saginaw, Flint and Detroit. This recommendation from the Infant Mortality Reduction Plan focuses on the legacy cities that have suffered the highest risk to maternal and infant health in recent years. While several initiatives such as Project LAUNCH (Linking Actions for Unmet Needs in Children’s Health) in Saginaw, Sew up the Safety Net in Detroit, REACH (Racial and Ethnic Approaches to Community Health) in Flint and FIMR (Fetal Infant Mortality Review) teams in Pontiac address health issues, resources from other departments, including Human Services and Education, have key roles to play in improving maternal and infant well-being. Despite increasing focus on the social/economic factors that imperil maternal and infant well-being, policies, such as increasing the Earned Income Tax Credit and the Cash Assistance grant, to reduce poverty have not been widely supported by policy makers.

Strengthen work supports and education/employment opportunities. Many women struggle to find affordable child care, and the state’s child care subsidy rate is so far below the current market rate that it provides limited access to licensed care. Most center-based care does not accept infants and fails to meet the needs of low-income women working erratic schedules during evening and week-end hours. Increasing opportunities for low-income women to complete an education or training program so they can secure better-paying jobs with more flexibility would improve their lives and those of their children. Strengthening supports to family, friend and neighbor care would be a key strategy.

Invest the recommended amount in a smoking prevention campaign. The health of Michigan’s children and their parents is compromised by the prevalence of smoking among pregnant women and the other adults in the households of young children. Tobacco is the leading cause of preventable illness and death in the U.S.: It has been linked to several different cancers as well as chronic lung diseases such as emphysema and bronchitis, and heart disease. Secondhand smoke triggers numerous health problems in infants and children, including more frequent and severe asthma attacks, respiratory and ear infections, and sudden infant death syndrome (SIDS).

Support early interventions to improve maternal and infant health. During the first three years of life roughly 85% of the brain architecture is developed, which provides the foundation for lifelong learning.14 The quality of the interaction between the child and his/her caregivers affects the emotional and social well-being as well as cognitive development. Early interventions such as home visiting have demonstrated an impact on improving maternal and infant well-being and later outcomes such as high school graduation and employment. Michigan has been able to expand its home visiting programs dramatically through its successful applications for federal funds totaling $34 million authorized in the Affordable Care Act. State funding has been erratic for these efforts.

Legacy City Profiles:

Michigan | Ann Arbor | Battle Creek | Bay City | Detroit | Flint | Grand Rapids | Holland | Jackson | Kalamazoo | Lansing | Muskegon | Pontiac | Port Huron | Saginaw | Warren

Endnotes

  1. Only counties with total population over 100,000 and a central city were included in this analysis.
  2. Holland Township, which actually had the largest number of births in Ottawa County and a larger share of minority births than the city (44% vs. 38%), was not included as it is not a city.
  3. In Washtenaw County, Ypsilanti Township rather than Ann Arbor actually had a larger percentage of births to women of color (45%) and to low-income uninsured women (43%).
  4. Numerous cost of living assessments have determined that income below double the poverty level(200%) is insufficient to meet the average basic needs in the modern American economy. (Poverty level income is 100%.)
  5. Those with income between 100% and 133% of poverty must pay 2% of their income for their coverage.
  6. The legacy city average is calculated on the average for each city rather than the total births to counter the disproportionate impact from the large number of births in Detroit.
  7. Only five of the eight measures could be assessed for trends between 2006 and 2012 due to changes in the birth record in 2007 for data on education level of the mother, receipt of prenatal care and smoking during pregnancy. Each reported year in the trend analysis is based on a three-year average to stabilize the estimate.
  8. Please note that the percentage of teen births can be affected by increases or decreases in the number of births to women over the age of 19 as well.
  9. Ann Arbor did not have enough incidences to calculate a rate for this indicator in 2012.
  10. Full-time income from the current minimum wage of $7.40 falls more than $3,000 short of the poverty threshold for a family of three. By the time Michigan’s recent law to increase the minimum wage to $9.25 an hour in 2018 is implemented, its value will still remain below the poverty line, which rises with inflation.
  11. Liz Ben-Ishai. Access to Paid Leave: An Overlooked Aspect of Social and Economic Inequality. Center for Law and Social Policy. April 14, 2014.
  12. Only five of the eight measures could be assessed for trends due to changes in the birth record for data on education level of the mother, receipt of prenatal care and smoking during pregnancy. Each reported year in the trend analysis is based on a three-year average to stabilize the estimate.
  13. The plan is available on-line at http://www.michigan.gov/documents/mdch/MichiganIMReductionPlan_393783_7.pdf.
  14. Jack Shankoff. Center on the Developing Child. Harvard University.

Fiscal Year 2015 Budget: Wins and Losses for Families and Children

 

The Michigan Legislature has finalized the budget for Fiscal Year 2015, and despite grappling with revenue projections that are nearly $300 million lower than January estimates, there were a number of important wins for low- and moderate-income families and children. The Legislature restored funding for several programs that were cut during the worst of the recession, and expanded funding for a number of important services, including early childhood education, the Healthy Michigan Plan, and dental care for low-income children.

Legislative leaders had hoped to have the budget done by the beginning of June, but were slowed down by several big ticket legislative issues that had the potential to affect the amount of money available next year, including efforts to address crumbling roads and bridges in Michigan, and the dedication of “rainy day” funds to help offset the statewide impact of Detroit’s bankruptcy.

Included in the budget agreements for Fiscal Year 2015, which begins Oct. 1 and ends Sept. 30, 2015, are the following:

Human Services

  • Continued deep cuts in income assistance caseloads and funding. Despite continuing high child poverty and unemployment rates, Family Independence Program, or FIP, caseloads continue to plummet. Based on falling caseloads, the final Department of Human Services budget reduces spending for FIP to $146.6 million—down 32% from the current fiscal year, and $152 million below the governor’s recommended budget. Caseloads are at their lowest level in more than 40 years, and while there is little data to explain the precipitous drop, a number of state policies have had a major impact, including strict enforcement of lifetime limits for FIP, the state decision to provide six months of very minimal assistance ($10 per month) to persons leaving FIP that count against their lifetime limits, and new procedures that increase sanctions and create barriers for public assistance recipients seeking help.
  • Continuation of policies that limit access to food assistance. The final budget includes $2.5 billion in federal funding for food assistance. Nearly 1.7 million Michigan residents received help from the Food Assistance Program in April 2014, including nearly 688,000 children, with approximately one-third of those children under the age of 6. After years of growth, food assistance caseloads have begun to fall slightly, dropping 5% between 2012 and the current fiscal year. State policies affect caseloads, including the imposition of an optional state asset test for food benefits, and the failure to address the “Heat and Eat” provisions of the federal Farm Bill, which could affect more than 235,000 low-income families in the state.
  • Continued limitations on eligibility for the annual school clothing allowance. Despite action by the House to expand eligibility for the school clothing allowance to all FIP children—not just those in cases that do not include an adult—the final budget retains the current policy. As a result, low-income children living with grandparents or other caregivers that don’t receive FIP will not receive help purchasing school clothing.
  • Continued investments in protective services and foster care, but no restoration of funding for programs to strengthen families and prevent child abuse and neglect. The final budget includes funding to help the state meet the requirements of a lawsuit settlement based on weaknesses in its child welfare system, however there are no restorations of funding for prevention services. Despite double-digit growth in the number of substantiated victims of child abuse and neglect, the final budget includes $46.2 million for prevention services, down from $65.3 million in 2008.1

The Fiscal Year 2015 budget includes $7.9 million to allow adoptive parents to seek higher adoption assistance payments if they discover their children have special needs that weren’t identified at the time of adoption, funding to increase rates for some private agency providers, and initial funding for the implementation of a new performance-based funding system for child welfare services.

  • Maxey Training School will stay open. The final budget rejects the House plan to save $8.1 million by closing the Maxey Training School for delinquent youths.

Community Health

  • An expansion of dental care for low-income children. The Legislature approved an increase in the Healthy Kids Dental program that would expand dental coverage to an additional 100,000 children, but still leaves out more than 400,000 children in three of the most populated counties—Wayne, Oakland and Kent–that are home to many low-income children and children of color.
  • Funding to reduce waiting lists for services for seniors and the disabled. The Legislature included $5 million to restore funding and help an estimated 4,500 seniors on waiting lists for home-delivered meals and in-home services, as well $9 million in state funds (drawing down $17.2 million in federal funds) to eliminate the waiting list for the MIChoice program that helps seniors and those with disabilities remain in their homes rather than move to nursing homes.
  • Full-year funding for the Healthy Michigan Plan. The Legislature included full-year funding for the Healthy Michigan Plan, which is 100% federally funded for calendar years 2014, 2015, and 2016. Also included are projected savings of $232 million from state-funded programs that had previously served the Healthy Michigan Plan population. The governor recommended that half of the projected savings be deposited into a healthcare savings account to be available in future years when the state would contribute a small portion of the cost. With the reduced revenue projection, that deposit will not be made.
  • Funding to continue a portion of increased payments to primary care providers. The Legislature concurred with the governor to retain about half of the primary care rate increase implemented in calendar year 2013. Full federal funding of this increase expires in December 2014, and Michigan was not obligated to continue the increase. The Legislature added $25 million in state funds and $47.5 million in federal funds to maintain about half of this increase which is critical to maintaining the primary care providers needed to care for Medicaid and Healthy Michigan Plan enrollees.
  • Increases for obstetrical services. The Legislature added $4.8 million in state funds and $9 million in federal funds to increase Medicaid obstetric payments to physicians (to 95% of Medicare rates) and $3.8 million in state funds and $7.2 million in federal funds to increase payments for obstetrical services to qualifying rural hospitals.
  • Harper/Hutzel special payment not continued. The Legislature did not restore full-year funding, $6.5 million in state funds and $12.3 million in federal funds, as recommended by the Senate, to Harper/Hutzel Hospital, which operates an infant mortality program with the National Institutes of Health.
  • No additional state funding for mental health services for those not eligible for Medicaid or Healthy Michigan Plan. The Legislature did not increase state funding for services for those not eligible for Medicaid or the Healthy Michigan Plan, rejecting the Senate recommendation to restore $4.8 million for Community Mental Health services.
  • Funding to implement the Mental Health and Wellness Commission recommendations. The Legislature added $14.3 million in state funds and $22.2 million in federal funds to begin implementing the recommendations of the Commission which were released in January 2014. In addition, the Legislature included $3.4 million in state funds to treat those with mental illness or developmental disabilities in settings other than the criminal justice system.
  • Restoration of funds for local public health services. The Legislature added $1.5 million in state funds for local public health services, bringing the total funding to the level of the Fiscal Year 2005 appropriation.
  • Funding to recognize minimum wage increase impact on Adult Home Help. The Legislature added $1.7 million in state funds and $3.3 million in federal funds to address the impact of the recently passed minimum wage increase on the Adult Home Help program.

School Aid & Education

  • An additional $65 million to expand early childhood education. Taking the governor’s lead, the Legislature approved another expansion of the Great Start Readiness program by $65 million, bringing total funding to $239 million. With these funds, an additional 16,000 half-day slots will be available for at-risk 4-year-olds, increasing their school readiness and later life success. Access to a high-quality early education has been shown to be a powerful tool in creating more equity in educational outcomes.

Although it rejected the governor’s recommendation to increase the per pupil allocation by $100 to $3,725, the Legislature authorized up to $10 million to cover the costs of transporting children. Next year, Intermediate School Districts (ISDs) will be able to enroll children in families with incomes of up to 300% poverty—up from the current cap of 250% of poverty—but must enroll the lowest-income children first.

  • Continued cuts in funding for subsidized child care, but increased funding for quality improvements and hours of care. The Legislature included $6.9 million to increase the maximum allowable reimbursable hours of subsidized child care from 80 hours to 90 hours in a two-week period, as well as $3.7 million to increase reimbursement rates to higher-quality child care providers, based on the state’s Great Start to Quality rating system. Both changes were implemented this year through a supplemental budget bill. Child care cases and costs are expected to continue to drop, with total funding for the child care subsidy program falling from $136.3 million this year to $110.3 million in Fiscal Year 2015—a drop of 19% in just one year.
  • An increase in the K-12 public school foundation allowance. After per pupil reductions of $470 between Fiscal Year 2009–when they were at their peak–and Fiscal Year 2012, the Legislature approved a small increase for 2015. Districts will receive a minimum of $50 per pupil, and those receiving less per pupil now (with foundation allowances below $7,251 per pupil) could receive up $125 per pupil from a new equity payment, for a total possible increase of $175 per pupil. The cost of the increase approved by the Legislature is $177 million, up from the $150 million recommended by the governor.
  • New funding for districts facing fiscal distress. The Legislature agreed to a total of $4 million (down from the governor’s recommendation of $10 million) for a new fund for emergency grants to school districts in financial distress.
  • No new funding for year-around school pilot projects. The governor, House and Senate had approved $2 million for pilot projects for year-around schools in districts eligible for the Community Eligibility Program option for free and reduced-price meals, but the final budget eliminates the funding.
  • New criteria for the use of At-Risk funding. The Legislature provided continuation funding for the At-Risk program of $309 million. The final budget also sets new criteria for the program, including a requirement that districts that don’t have at least half of at-risk 3rd graders reading at grade level, or show improvements over 3 years in the percentage of at-risk pupils that are college- and career-ready, must spend a portion of At-Risk funds on tutoring or other services to improve those two outcomes.
  • No increase in adult education, but a new allocation formula. The Legislature approved continuation funding of $22 million for adult education, down from a peak of $185 million in 1996. Also adopted was a new method for allocating adult education funds based on 10 “Prosperity Regions,” and new criteria related to the percentage of high school graduates and English language proficiency. ISDs will serve as fiduciaries for adult education funds and may keep up to 5% to cover administrative costs, which means money going directly to programs will be reduced by up to 5% in each Prosperity Region.

Higher Education and Community Colleges

  • A 3% increase in funding for Michigan’s 28 community colleges and nearly $77 million for a 6% increase for universities. While funding for community colleges has increased over the last decade along with enrollments, funding for universities declined by more than 19% between Fiscal Years 2004 and 2014.2 To receive increases in 2015, universities must cap tuition increases at 3%.
  • An increase of $1.5 million for the Tuition Incentive Program. The Legislature approved an increase in the Tuition Incentive Program for low-income students. While there is universal agreement that a highly educated and skilled workforce is the key to Michigan’s economic growth, over the past decade, Michigan cut need-based grants and scholarships by 20%, while other states increased theirs by 84%.

Endnotes

1 Includes spending for Families First, Child Safety & Permanency, Strong Families/Safe Children, Family Reunification, Teen Parent Counseling, O to 3 Secondary Prevention, and Children Protection/Community Partners.
2 Ellen Jeffries, State Spending for State Resources Appropriations Total Compared in Selected Budget Areas, State Budget Overview, Senate Fiscal Agency (May 27, 2014).

 

The House and Senate Approve Modest Increases for Universities and Community Colleges for FY 2015

Full report in PDF

Because Michigan does not have a state agency that exercises financing or policy authority over its universities and community colleges, the Legislature makes direct appropriations to those institutions through the Higher Education and Community Colleges budgets. Michigan’s three financial aid grant programs are funded through the Higher Education budget even though community college students may also apply for and receive those grants.

Community Colleges

Governor’s Budget:

  • Appropriates a 3% ($8.9 million) increase in total funding for community college operations, which is distributed among the 28 Michigan community colleges according to the following metrics: proportional increase from FY 2013-14 funding (50%), weighted completions (17.5%), student contact hours (10%), administrative costs (7.5%) and local strategic value (15%). (Colleges receive the local strategic value portion if they meet four out of five listed best practices in each of the following areas: a) economic development and business/industry partnerships, b) educational partnerships, and c) community services.)
  • As in previous recent years, the majority of overall funding in the governor’s budget for community colleges comes from the School Aid Fund ($197.6 million, an amount equal to the current School Aid Fund appropriation) and the rest comes from the General Fund ($173.9 million, a 26% increase over the current General Fund appropriation).
  • Includes, for the first time, a tuition restraint prerequisite (similar to the one for universities) that conditions receipt of metric funding on limiting FY 2014-15 tuition and fee increases for resident students to 3.2%.

Senate:

  • Concurs with the governor on the increase in operational and performance funding.
  • Appropriates more money from the General Fund ($323.9 million) than the governor, and less from the School Aid Fund ($47.6 million).
  • Does not include the governor’s recommended tuition restraint provision.

House:

  • Concurs with the governor on the increase in operational and performance funding.
  • Concurs with the governor on the amount of funding from the General Fund ($173.9 million) and from the School Aid Fund ($197.6 million).
  • Does not include the governor’s tuition restraint provision.
  • The House Appropriations Committee included boilerplate, supported by the League, and a $100 placeholder to develop a program by which students could obtain a GED at a community college free of charge if committing to enroll in an academic or vocational program. The state would reimburse community colleges for eligible costs associated with providing the GED programs or testing. The boilerplate language and placeholder were removed on the House floor.

Universities

Governor’s Budget:

  • Increases the total appropriation for university operations by $76.9 million (6.1%) over the current fiscal year. As in previous recent years, this increase is in the form of performance funding, though the formula has been modified so that half of the increase goes proportionally to universities to make up for funding lost in 2012.
  • Includes a new performance metric that rewards institutions based on the number of students receiving Pell Grants, a positive change that attempts to encourage universities to become more accessible to low-income students.
  • Continues the practice begun two years ago of requiring universities to limit tuition increases to 3.2% or less in order to receive any performance funding. This is the first budget that applies the same requirement to community colleges as well, even though community college tuition increases have been much smaller than those of universities over the past decade. This “tuition restraint” prerequisite for receiving performance funding helps to keep postsecondary education affordable for low-income students.

Senate:

  • Concurs with the governor in increasing the total appropriation for university operations by $76.9 million (6.1%) over the current fiscal year.
  • Concurs with the governor’s performance funding and tuition restraint changes.

House:

  • Increases university operations funding by $70.4 million (5.6%) over the current fiscal year.
  • Concurs with the governor’s performance funding and tuition restraint changes.

Financial Aid

Governor’s Budget:

  • Increases the Tuition Incentive Program by $1.5 million over the current fiscal year, for a total of $48.5 million. The increase is entirely from the General Fund, but $43.8 million (90%) of total funding for TIP is from the state’s TANF funds.
  • Provides total funding for all financial aid grant programs of $103.1 million, some of which comes from the federal Temporary Assistance for Needy Families allocation.
  • Does not increase the Michigan Tuition Grant program, but adds a requirement that independent colleges submit data, including student performance data (Tuition Grant students enrolled in remedial education and/or completing degrees, Pell Grant students completing degrees), to the P-20 system in order to participate in the Tuition Grant program—a change supported by the League.

House:

  • Increases the Tuition Incentive Program by $1.5 million over current year, and the Michigan Tuition Grant by $1.8 million over the current year.
  • Includes the governor’s P-20 data reporting requirement for participation in the Tuition Grant program.

Senate:

  • Increases the Tuition Incentive Program by $1.5 million over current year.
  • Does not increase the Michigan Tuition Grant or include the governor’s P-20 requirement for participation in the Tuition Grant program.

Contact legislators to support vital services in the FY 2015 state budget

 Full report in PDF

Both the Michigan House of Representatives and the Michigan Senate have passed budget bills for Fiscal Year 2015. The next step in the budget process, beginning June 5, is the resolution of differences between the House and Senate versions in joint House/Senate conference committees.

Legislative leaders had hoped to have the Fiscal Year 2015 budget done by the beginning of June, but were slowed down by several big-ticket legislative issues that could affect the amount of money available next year, including efforts to address crumbling roads and bridges in Michigan, the dedication of “rainy day” funds to help offset the statewide impact of Detroit’s bankruptcy, and the need to grapple with revenues that are significantly below estimates made in January.

Final spending targets for each of the major state departments will be finalized soon, and will likely be lower than those used by the House and the Senate in the budgets already passed. On May 15, state economists and fiscal experts agreed that combined state General Fund and School Aid Fund revenues will be $317 million lower than projected in January in the current fiscal year, and $299.1 million lower than originally projected for Fiscal Year 2015.

With lower revenues, it is likely that many of the governor’s and Legislature’s priorities—including some good investments in Michigan families, workers and the economy—are at risk, such as:

  • An increase in the K-12 public school foundation allowance. After per pupil reductions of $470 between Fiscal Year 2009, when they were at their peak, and Fiscal Year 2012, the governor and the Legislature are recommending small increases in Fiscal Year 2015. Since 2012, per pupil increases have been weighted toward districts receiving the minimum foundation allowance, yet under the governor’s proposal for Fiscal Year 2015, the minimum payment would still fall $129 below its peak, while the maximum payment would be $357 below its peak.1
  • A 3% increase in funding for Michigan’s 28 community colleges and nearly $77 million for a 6% increase for universities. While funding for community colleges has increased over the last decade along with enrollments, funding for universities declined by more than 19% between Fiscal Years 2004 and 2014.2
  • Adequate federal funding for Healthy Michigan Plan services. The House and Senate budgets agreed with the governor on funding for Healthy Michigan Plan services. Serious concern has been expressed by managed care organizations and Community Mental Health that the recommended funding is inadequate. Sufficient funding, which is 100% federal, is critical to the success of the program.
  • Adequate state funding for mental health services for those not eligible for Medicaid or Healthy Michigan Plan. The House agreed with the Executive Budget savings for mental health services that could be provided through the Healthy Michigan Plan. The Senate budget includes a $4.8 million increase in response to concerns that the savings estimates are too high.
  • An expansion of preschool for low-income children. Taking the governor’s lead, the House and Senate versions of the Fiscal Year 2015 budget include an expansion of the Great Start Readiness program by $65 million. With these funds, an additional 16,000 half-day slots would be available for at-risk 4-year-olds, increasing their school readiness and later life success. Access to a high quality early education has been shown to be a powerful tool in creating more equity in educational outcomes regardless of race, ethnicity and income.
  • Dental care for low-income children. The House and Senate versions of the Fiscal Year 2015 budget include an increase in the Healthy Kids Dental program that would expand dental coverage to an additional 100,000 children, but still leave out more than 400,000 children in three of the most populated counties—Wayne, Oakland and Kent—that are home to many low-income children and children of color.
  • An increase of $1.5 million for the Tuition Incentive Program. The governor, House and Senate have so far supported an increase in the Tuition Incentive Program for low-income students. While there is universal agreement that a highly educated and skilled workforce is the key to Michigan’s economic growth, over the past decade, Michigan cut need-based grants and scholarships by 20%, while other states increased theirs by 84%.
  • Funding to continue increased payments to primary care providers. The House and Senate budgets include funding, in different amounts, to continue a portion of the payment increase for primary care providers to make sure there are enough primary care providers to care for newly eligible Healthy Michigan Plan enrollees, as well as continue to care for Medicaid recipients.
  • Funding to reduce waiting lists for services for seniors and those with disabilities. The House and Senate budgets include funding ($5 million) to restore previous cuts and help an estimated 4,500 seniors on waiting lists for home-delivered meals and in-home services, as well $9 million in state funds (drawing down $17.2 million in federal funds) to eliminate the waiting list for the MIChoice program that helps seniors and those with disabilities remain in their homes rather than move to nursing homes.
  • Expansion of prisoner education program. The Governor and House budgets include$4.3 million to expand vocational education and workforce re-entry instruction for parolees. The Senate budget does not include this funding. The additional funds would be used to hire five instructors and 15 employment counselors who would connect parolees to employers.

Now is the time to use your voice to ensure that funding for programs that support low- and moderate-income families is protected; and that the state invests in the health care, education and community services needed to grow the economy.

To help you engage in the budget debates, the League has produced a series of Budget Briefs that summarize the differences between the House and Senate budgets that will be negotiated by the legislative conferees. Also available is a list of the conferees and contact information.

 

 ——————————————————–
1 Mary Ann Cleary, and Bethany Wicksall, Changes in K-12 Funding, memorandum to: Members of the House Appropriations Committee (February 11, 2014).
2 Ellen Jeffries, State Spending for State Resources Appropriations Total Compared in Selected Budget Areas, State Budget Overview, Senate Fiscal Agency (May 27, 2014).

How to Contact the Members of the Conference Committees

When you contact a Legislator’s office, if you are not able to reach the Senator or Representative, make sure to leave your message with the staff. They do pass along the information!

Community Colleges:

Senators:

  • Sen. Darwin Booher, R-Evart, Chair of the Senate Community Colleges Appropriations Subcommittee. Phone #: 517/373-1725, or SenDBooher@senate.michigan.gov.
  • Sen. Roger Kahn, R-Saginaw, Chair of the Senate Appropriations Committee. Phone # (toll-free): 866/305-2132, or SenRKahn@senate.michigan.gov.
  • Sen. Glenn Anderson, R-Westland, Minority Vice Chair of the Senate Appropriations Committee. Phone # (toll-free): 866/262-7306, or SenGAnderson@senate.michigan.gov.

Representatives:

Community Health Budget

Senators:

  • Sen. John Moolenaar, R-Midland, Vice Chair of the Senate Appropriations Committee, and Chair of the Community Health Appropriations Subcommittee. Phone #: 517/373-7946, or SenJMoolenaar@senate.michigan.gov.
  • Sen. Roger Kahn, R-Saginaw, Chair of the Senate Appropriations Committee. Phone # (toll-free): 866/305-2132, or SenRKahn@senate.michigan.gov.
  • Sen. Vincent Gregory, D-Southfield, Phone # (toll-free): 866/626-0814, or SenVGregory@senate.michigan.gov.

Representatives:

  • Rep. Matt Lori, R-Constantine, Chair of the Community Health Appropriations Subcommittee. Phone # (toll-free): 877/262-5959, or MattLori@house.mi.gov.
  • Rep. Rob VerHeulen, R-Walker, Phone # (toll-free): 800/968-2320, or RobVerHeulen@house.mi.gov.
  • Rep. Rashida Tlaib, D-Detroit, Minority Vice Chair of the House Appropriations Committee, Phone # (toll-free): 877/852-4212, or RashidaTlaib@house.mi.gov.

Corrections Budget

Senators:

  • Sen. John Proos, R-St. Joseph, Chair of the Corrections Appropriations Subcommittee. Phone # (toll-free) 866/305-2121, or SenJProos@senate.michigan.gov.
  • Sen. Roger Kahn, R-Saginaw, Chair of the Senate Appropriations Committee. Phone # (toll-free): 866/305-2132, or SenRKahn@senate.michigan.gov.
  • Sen. Glenn Anderson, R-Westland, Minority Vice Chair of the Senate Appropriations Committee. Phone # (toll-free): 866/262-7306, or SenGAnderson@senate.michigan.gov.

Representatives:

  • Rep. Joe Haveman, R-Holland, Chair of the House Appropriations Committee. Phone # (toll-free): 866/908-4347, or JosephHaveman@house.mi.gov.
  • Rep. Early Poleski, R-Jackson, Phone # (toll-free): 888/643-4786, or EarlPoleski@house.mi.gov.
  • Rep. Andrew Kandrevas, D-Southgate, Phone # (toll-free): 866/REP-1313, or AndrewKandrevas@house.mi.gov.

Department of Education

Senators:

  • Sen. Howard Walker, R-Traverse City, Chair of the Education Appropriations Subcommittee, Phone #: 517/373-2413, or SenHWalker@senate.michigan.gov.
  • Sen. Roger Kahn, R-Saginaw, Chair of the Senate Appropriations Committee. Phone # (toll-free): 866/305-2132, or SenRKahn@senate.michigan.gov.
  • Sen. Hoon-Yung Hopgood, D-Taylor, Minority Vice Chair of the Education Appropriations Subcommittee. Phone #: 517/373-7800, or SenHHopgood@senate.michigan.gov.

Representatives:

  • Rep. Bill Rogers, R-Brighton, Chair of the Education Appropriations Subcommittee. Phone # (toll-free): 866/994-2844, or BillRogers@house.mi.gov.
  • Rep. Matt Lori, R-Constantine. Phone # (toll-free): 877/262-5959, or MattLori@house.mi.gov.
  • Rep. Sam Singh, D-East Lansing. Phone #: 517/373-1786, or SamSingh@house.mi.gov.

Higher Education

Senators:

Representatives:

  • Rep. Al Pscholka, R-Stevensville, Vice Chair of the House Appropriations Committee, and Chair of the House Higher Education Appropriations Subcommittee. Phone # (toll-free): 888/656-0079, or AlPscholka@house.mi.gov.
  • Rep. John Walsh, R-Livonia. Phone #: 517/373-3920, or JohnWalsh@house.mi.gov.
  • Rep. Sam Singh, D-East Lansing. Phone #: 517/373-1786, or SamSingh@house.mi.gov.

Human Services

Senators:

Representatives:

  • Rep. Peter MacGregor, R-Rockford, Chair of the House Human Services Appropriations Subcommittee. Phone # (toll-free): 855/DIST-073, or PeterMacGregor@house.mi.gov.
  • Rep. Michael McCready, R-Bloomfield Hills. Phone # (toll-free): 855/373-8670, or MikeMcCready@house.mi.gov.
  • Rep. Rashida Tlaib, D-Detroit, Minority Vice Chair of the House Appropriations Committee, Phone # (toll-free): 877/852-4212, or RashidaTlaib@house.mi.gov.

School Aid

Senators:

Representatives:

 

Preschool Boosted, Per-Pupil Funding Increased in Education Budgets Signed by Governor

The final Fiscal Year 2015 budgets for School Aid and the Department of Education contain another $65 million increase for preschool programs for at-risk 4-year-olds, a small boost in the statutory minimum K-12 per-pupil foundation allowance and equity payments for districts and public school academies receiving the lowest state payments. Funding was also included to partially restore some educational and child care programs that were cut during the worst of the state’s decade long recession.

Despite small increases in the per-pupil allotment during the last several years, state payments to public schools and academies have failed to keep up with increased costs. Over the last decade, the minimum foundation allowance increased by 7.3%, while the Detroit Consumer Price Index increased by 19.4%.1

There are 48 Michigan school districts and public school academies operating with deficits, and many others warn that they will face financial distress if current funding trends continue. Minimum per-pupil payments peaked in Fiscal Year 2009 before being cut by a total of $470. With the increase in Fiscal Year 2015, minimum per-pupil payments will still fall below 2009 levels—without accounting for inflation.

Per-Pupil Foundation Allowance

Governor:

  • Includes $150 million for an increase in the foundation allowance of between $83 and $111 per pupil. Under the governor’s budget, the minimum per-pupil allowance would be $7,187, and the maximum guaranteed amount would be $8,132. Much of the cost of increasing the per-pupil payment next year is offset by the governor’s recommendation to shift funding for current equity payments to districts with lower foundation allowances ($36 million) to the foundation allowance, along with expected decreases in the number of students and increases in local taxable values.
  • Recommends continuation funding ($46.4 million) for districts based on their performance on four standards. Districts can currently receive up to $100 per pupil, including $30 per pupil for academic growth in math in grades 3-8, $30 per pupil for growth in reading in grades 3-8, and $40 per pupil for growth in all high school tested subjects. After release of the budget, the administration determined that full funding for eligible districts would require an additional $4.7 million for total funding of $51.1 million in Fiscal Year 2015.
  • Recommends continuation funding of $80 million for grants of up to $52 per pupil for districts that meet seven of eight best practices criteria by June 1, 2015.

House:

  • Includes $141 million to increase the per-pupil foundation allowance by between $56 and $112, with the minimum foundation allowance at $7,188 and the maximum guaranteed level (basic allowance) at $8,105. The House assumes that the expected changes in baseline costs projected by the governor—from a decline in the number of students, increases in local taxable values, and the transfer of funds from the current equity payment—would cover over $115 million of the total $141 million increase.
  • Includes new budget language reallocating up to $35 million from any funds that are determined by May 1, 2015 to be unspent due to declining enrollments to districts with at least 1.2% fewer students than the prior year, provided that the districts are not in deficit.
  • Increases funding for school district performance grants by 10% to reflect actual need, from the current level of $46.4 million to $51.1 million.
  • Reduces funding for district best practices grants by $1.3 million (1.6%) to a total of $78.7 million, and changes the best practices criteria. The House retains the requirement that districts act as policy holders for healthcare services benefits, competitively bid at least one noninstructional service, participate in schools of choice, and provide financial, achievement testing and other school data to the public through a dashboard. Deleted are criteria encouraging districts to measure student growth twice annually, provide dual enrollment and online learning opportunities, and offer physical education or health education. The House adds requirements related to school employee compensation and collective bargaining, and implementation of the Michigan Comprehensive Guidance and Counseling program.

Senate:

  • Increases the maximum (basic) per-pupil foundation allowance by $150, and the minimum by $300 per pupil. The increases are partially funded through the elimination of best practices grants to districts ($80 million) and performance grants ($46.4 million), as well as the distribution of $100 million in Michigan Public School Employees’ Retirement System (MPSERS) grants through the per-pupil allowance. Under the Senate budget, the minimum grant would be $7,376, and the maximum (basic) $8,199.
  • Includes $31 million for a minimum “hold harmless” increase for districts of $75 per pupil, reflecting the fact that the loss of best practices, performance and MPSERS grants will affect districts differently.
  • Agrees with the governor to roll $36 million in funding authorized in the current year budget for equity payments into the base funding for per-pupil payments.
  • Provides $32.4 million for a new Education Reserve Fund to pay for budget supplementals or other items in future budgets. Legislative action would be required to spend from the fund.

Final Budget:

  • Includes $177 million for increases in the K-12 per-pupil foundation allowance. Districts will receive a minimum of $50 per pupil, and those receiving less per pupil now could receive up to $125 per pupil from a new equity payment, for a total possible increase of $175 per pupil. The minimum payment in 2015 will be $7,251, with the basic allowance set at $8,099. The $50 minimum per-pupil increase fell significantly below the recommendations of the governor, as well as the House and Senate-passed bills.
  • Increases funding for school district performance grants by $4.7 million or 10% to a total of $51.1 million to reflect actual need based on student assessments. Criteria for receiving performance funding are not changed.
  • Reduces the amount of money school districts can receive for meeting best practices criteria from $52 to $50 per pupil, lowering overall funding from $80 million to $75 million. The final budget also adopts most of the changes in best practices recommended by the House, with two exceptions: (1) the final budget retains the current standard that districts provide online learning; and (2) a new standard is added to encourage districts to offer one credit of foreign language in grades K-8. To receive funding, districts must meet seven of the nine revised standards.

Funding and Intervention for School Districts in Fiscal Distress

Governor:

  • Proposes $10 million for a new fund for emergency grants to school districts in financial distress. The fund would be for districts that are either facing dissolution, or have accepted children from districts that have dissolved.
  • Revises the process for identifying and managing school districts facing deficits, including a requirement for immediate notification to the Michigan Department of Education, timelines for reporting and planning, guidelines for district or Intermediate School District financial recovery agreements with the State Treasurer, and authority for the Michigan Department of Education to withhold some or all state funding as an incentive to districts to eliminate deficits or develop acceptable deficit elimination plans.

House:

  • Agrees with the governor and appropriates $10 million for districts in fiscal distress.
  • Retains current law regarding the management of districts facing deficits.

Senate:

  • Rejects the governor’s proposed distressed school district emergency fund.
  • Agrees with the governor on changes in the management of districts facing deficits and requirements for enhanced deficit elimination plans.

Final Budget:

  • Appropriates $4 million for a new Distressed Districts Emergency Grant Fund—down from the governor’s and Senate’s recommendation of $10 million. Funds can be used by districts that are voluntarily dissolving, or those that receive students from a dissolved district.
  • Rejects the governor’s proposed changes in the process for identifying and managing school districts facing deficits. Under current law, which will be continued next year, districts or Intermediate School Districts that have deficits cannot receive payments until the Michigan Department of Education approves a deficit elimination plan that erases the deficit within two years.

At Risk Programs

Governor:

  • Recommends continuation funding of $309 million for the At Risk Program, which is available to school districts for a range of instructional and noninstructional services for at-risk students.
  • Proposes significant changes in the allocation and use of At Risk funds, including:

— Establishing two goals for the use of funds: (1) reading proficiency by the end of third grade; and (2) graduation rates, and career and college readiness. Districts that cannot show success toward those goals after three years must reallocate funds and revise their plans.

—  Allowing funds to be used to implement reforms in schools with 40% or more of pupils identified as at-risk—consistent with the local School Improvement Plan.

— Maintaining the current formula for distributing funds, which is based on the number of pupils qualifying for free or reduced meals, but redefining “at risk” students as those who meet any of the following criteria: (1) are enrolled in priority schools; (2) are enrolled in “focus schools” which are in the bottom 30% of achievement; or (3) did not achieve a proficient score on two or more state or locally administered assessments. In the absence of assessment data, the pupil must meet at least two of the following: (1) eligible for free- or reduced-price meals; (2) absent more than 10 school days during the year, or 10% of enrolled days; (3) homeless; (4) migrant; (5) English language learner; (6) immigrant; or (7) did not complete high school in four years and is still enrolled.

House:

  • Agrees with the governor and provides $309 million—continuation funding—for the At Risk Program.
  • Accepts the governor’s changes in the goals of the At Risk Program, including reading proficiency by the end of third grade, and assuring that high school graduates are career and college ready.
  • Accepts the governor’s new definition of an at-risk student.
  • Retains several current potential uses of At Risk funding, including early childhood programs, reading programs and adult education, and retains language prohibiting the use of funds to supplant other program funding.
  • Concurs with the governor in allowing At Risk funds to be used for school-wide reforms in schools where 40% or more of the students are at-risk.

Senate:

  • Agrees with the governor by providing continuation funding for the At Risk Program.
  • Rejects the governor’s proposed changes to the goals and allocation of At Risk dollars.
  • Rejects the governor’s changes in the definition of an at-risk pupil.
  • Rejects the governor’s proposal to allow districts to use the funds for school-wide reforms in high-risk schools.

Final Budget:

  • Provides continuation funding of $309 million for the At Risk Program, with the allocation of funding based on the current formula, which is 11.5% of each district’s foundation allowance times the number of pupils who qualify for free school meals.
  • Adopts the governor’s proposal that At Risk funds be used to ensure that third grade students are proficient in reading by the end of third grade, and that high school graduates are career and college ready.
  • Concurs with the governor to provide districts with greater flexibility by eliminating some specified uses of At Risk dollars, and by allowing districts to use At Risk funds for school-wide reforms consistent with their School Improvement Plans, if more than 40% of the students are at-risk.
  • Expands the definition of “at-risk pupil” to include both the governor’s proposed language and the definition in current law.
  • Adds new language that districts that do not have at least 50% of at-risk third graders reading at grade level, or have failed to show improvements over three years in the percentage of at-risk pupils who are college- and career-ready, must spend a share of half of their At Risk funds on either tutoring and third grade reading, or activities to improve college and career readiness.

Child and Adolescent Health Centers

Governor:

  • Recommends continuation funding of $3.56 million for child and adolescent health centers.

House:

  • Concurs with the governor.

Senate:

  • Concurs with the governor.

Final Budget:

  • Includes continuation funding of $3.56 million for child and adolescent health centers.

Hearing and Vision Screenings

Governor:

  • Recommends continuation funding for hearing and vision screenings at $5.2 million.

House:

  • Concurs with the governor.

Senate:

  • Concurs with the governor.

Final Budget:

  • Includes continuation funding of $5.2 million for hearing and vision screenings.

Early Childhood Education and Care

Governor:

  • Preschool Programs: The governor increases funding for the Great Start Readiness Program by another $65 million, after a $65 million increase in the current year—the largest dollar and service expansion in the United States. The governor’s proposal creates another 16,000 half-day slots for 4-year-olds, and brings total funding to $239.6 million in Fiscal Year 2015. The governor also:

— Increases the per-slot payment by $100, from $3,625 to $3,725.

— Includes budget language that allows Intermediate School Districts to enroll children from families with incomes of up to 300% of poverty if they can determine that all children at or below 250% of poverty are being served, and there is no waiting list. The highest-need children must be enrolled first. Homeless children, children in foster care, and those in special education inclusive preschool programs are eligible regardless of family income. Currently, Intermediate School Districts must ensure that 90% of the children in the program are from families earning 250% of poverty or less.

  • Early Childhood Block Grant: The governor provides continuation funding of $10.9 million for block grants to Intermediate School Districts for early childhood programs for children from birth through age 8. Funds are to be used in part to convene local Great Start Collaboratives and Parent Coalitions.
  • Child Care: The governor increases funding for child care subsidies for low-income families by $10.6 million (8%)—from $136.3 million to $146.9 million. New funds are to be used to:

— Increase the maximum allowable reimbursable hours for subsidized child care from 80 to 90 hours in a two-week period, recognizing parents need to travel to work and child care settings ($6.9 million). The increase in the number of reimbursable hours was adopted this fiscal year with the appropriation of $3.5 million in a supplemental budget bill.

— Increase reimbursement rates to higher quality child care providers, based on the state’s Great Start to Quality rating system. Providers with three, four and five star ratings would see progressively higher hourly reimbursements rates ($3.7 million). The tiered reimbursement system was also adopted in the current fiscal year with the appropriation of $1.8 million in a supplemental budget bill.

House:

  • Preschool Programs:

— Agrees with the governor and increases the Great Start Readiness Program by an additional $65 million. However, places $25 million of that increase in a GSRP reserve fund, making funding available to districts if sufficient slots are filled before Jan. 31, 2015 (a similar fund was created in the current year).

— Maintains the current requirement that at least 90% of the children enrolled in a GSRP are from families with incomes of 250% of poverty or less; but includes the new language making homeless children, or those in foster care or inclusive special education preschool settings, eligible regardless of family income.

— Rejects the governor’s recommendation to increase the per-slot grant by $100.

— Earmarks $10 million of total GSRP spending for reimbursements of up to $150 per slot for transportation costs.

— Adds budget language requiring Intermediate School Districts to report on their progress in contracting 30% of their GSRP funds to private agencies, and provides penalties for those that fail to demonstrate efforts to do so.

  • Early Childhood Block Grant:

— Concurs with the governor on funding for the Early Childhood Block Grant.

  • Child Care:

— Agrees with the governor by increasing funding for child care subsidies for low-income families by $10.6 million to a total of $146.9 million.

— Agrees with the governor to increase the maximum allowable reimbursable hours for subsidized child care from 80 to 90 hours in a two-week period.

— Agrees with the governor to increase reimbursement rates to higher quality child care providers, based on the state’s Great Start to Quality rating system.

Senate:

  • Preschool Programs:

— Agrees with the governor and increases the Great Start Readiness Program by an additional $65 million.

— Includes the governor’s budget language allowing Intermediate School Districts to enroll children from families with incomes of up to 300% of poverty if they can determine that all children at or below 250% of poverty are being served, and there is no waiting list. Also includes eligibility for homeless children, or children in foster care or preprimary special education regardless of income.

— Increases the per-slot grant by $50 to $3,675.

— Agrees with the House and earmarks $10 million of the total GSRP spending for reimbursements of up to $150 per-slot for transportation costs.

  • Early Childhood Block Grant:

— Concurs with the governor on funding for the Early Childhood Block Grant.

  • Child Care:

— Concurs with the governor and House on total child care subsidy funding of $146.9 million, including a $10.6 million increase to expand hours of care and create a tiered provider reimbursement payment system.

Final Budget:

  • Preschool Programs: For Fiscal Year 2015, an additional $65 million was approved for the Great Start Readiness Program, bringing total funding to $239.6 million. With these funds, an additional 16,000 half-day slots will be available for at-risk 4-year-olds. Because Michigan law allows districts to combine slots to create full-day programs, an estimated 10,000 new children could be enrolled. In addition, the final budget:

— Does not include the governor’s increase in the per-slot grant by $100 to $3,725.

— Allows $10 million (of the total funding) to be used for transportation costs of up to $150 per half-day slot.

— Establishes a $25 million reserve fund for GSRP, with funds made available for services for at-risk 4-year-olds if the slots can be filled and the Legislature approves the expenditure by Dec. 15, 2014.

— Includes the governor’s changes in eligibility, allowing children from families with incomes of up to 300% of poverty to be enrolled if Intermediate School Districts can demonstrate that all children at or below 250% of poverty are being served and there is no waiting list. The highest-need children must be enrolled first; and homeless children, children in foster care, and those in special education inclusive preschool programs are eligible regardless of family income.

— Includes House language requiring the Michigan Department of Education to reduce the number of preschool slots an Intermediate School District receives if it fails to submit evidence that it attempted to contract 30% of its total slots to community-based organizations. Timelines for quality assessments of community organizations through the state’s Great Start to Quality rating system are also established.

— Maintains language requiring Intermediate School Districts to establish a tuition sliding scale for the preschool program for families with incomes above 250% of poverty.

  • Early Childhood Block Grant:

— Includes continuation funding of $10.9 million for the early childhood block grant provided to Intermediate School Districts.

  • Child Care:

— Continues cuts in funding for subsidized child care, but increases funding for quality improvements and hours of care. The final budget includes $6.9 million to increase the maximum allowable reimbursable hours of subsidized child care from 80 hours to 90 hours in a two-week period, as well as $3.7 million to increase reimbursement rates to higher quality child care providers, based on the state’s Great Start to Quality rating system. Both changes were implemented through a supplemental budget bill this year. Michigan once provided child care for up to 100 hours in a two-week period, and many states have no caps if care is needed to work or train for jobs.

— Child care cases and costs are expected to continue to drop, with total funding for the child care subsidy program falling from $136.3 million to $110.3 million—a drop of 19% in just one year.

Bilingual Education

Governor:

  • Provides continuation funding of $1.2 million for bilingual education.
  • Removes current budget language prohibiting reimbursements to school districts that serve children who are not legal residents of the United States.

House:

  • Agrees with the governor to appropriate continuation funding for bilingual education.
  • Retains current budget language prohibiting payments for instruction for children who are not residing in the United States legally.

Senate:

  • Appropriates continuation funding for bilingual education.
  • Agrees with the House subcommittee to retain current budget language prohibiting payments for children who are not residing in the United States legally.

Final Budget:

  • Includes continuation funding of $1.2 million for bilingual education.
  • Includes the governor’s recommendation to remove current budget language prohibiting reimbursements to school districts that serve children who are not legal residents of the United States.

Adult Education

Governor:

  • Provides continuation funding of $22 million for adult education. Michigan has decreased state funding for adult education drastically in the past 20 years, from $185 million in 1996 to $22 million this year.
  • Proposes significant changes in the allocation method for adult education funds, including:

— Funds would be allocated to Intermediate School Districts serving as fiscal agents in each of the 10 “Prosperity Regions” identified by the Michigan Department of Education.

— In Fiscal Year 2015, 67% of the funds would be provided to Intermediate School Districts based on the proportion of total funding formerly received by the adult education providers in that region. The remaining funds (33%) would be divided based on new criteria that relate to the percentage of high school graduates and English language proficiency. By Fiscal Year 2017, all funds would be allocated based on the new formula.

House:

  • Agrees with the governor to provide continuation funding of $22 million for adult education.
  • Agrees with the governor to revise the adult education allocation method and formula.
  • Adds language prohibiting Intermediate School Districts from using the funds for administrative costs associated with serving as the fiscal agent.

Senate:

  • Agrees with the governor to provide continuation funding of $22 million for adult education.
  • Rejects the governor’s new allocation method and formula.

Final Budget:

  • Provides continuation funding of $22 million for adult education, down from $185 million in 1996.
  • Includes a new method for allocating adult education funds based on 10 “Prosperity Regions,” with Intermediate School Districts serving as fiscal agents. Funding through Prosperity Regions would be phased in, with all funds allocated through the new formula by Fiscal Year 2017. The new formula is based on criteria relating to the percentage of high school graduates and English language proficiency.
  • Allows Intermediate School Districts to retain up to 5% for administrative costs, which could reduce money going directly to programs by up to 5% in each Prosperity Region.
  • Requires the Michigan Department of Education to ensure that in Fiscal Year 2015, adult education services will be provided to at least as many persons as are served in the current fiscal year.
  • Provides up to $2,850 for each full-time adult education student, with providers receiving payments based 75% on enrollment and 25% on successful completion (currently 90% enrollment and 10% completion).

Dual Enrollment Incentives

Governor:

  • Includes $1.75 million for new incentives for school districts that support dual enrollment. Districts can receive up to $30 for each pupil enrolling in a course at an eligible postsecondary institution ($10 per credit hour), with an additional $30 provided if the pupil successfully completes the course and is awarded both high school and postsecondary credit.

House:

  • Concurs with the governor.

Senate:

  • Concurs with the governor, and makes concurrent enrollment programs eligible for funding.

Final Budget:

  • Includes $1.75 million recommended by the governor for new incentives for school districts offering dual enrollment.
  • Expands the incentives to concurrent enrollment programs.

Year-Around School Pilot Projects

Governor:

  • Includes $2 million for year-around school pilot projects in school districts that are eligible for the community eligibility option for free and reduced price lunches.

House:

  • Concurs with the governor to provide $2 million for year-around school pilot projects, but provides for a maximum award per district of $750,000.
  • Adds criteria for the selection of pilot districts.

Senate:

  • Concurs with the governor on funding, but limits any individual grant to $250,000.

Final Budget:

 Despite support by the governor, House and Senate in their 2015 budgets, the final budget does not include $2 million for year-around school pilot projects in school districts that are eligible for the community eligibility option for free and reduced price lunches.

Endnote:

  1. Jeffries, E., K-12 School Minimum Foundation Allowance, State Budget Overview, Senate Fiscal Agency (May 27, 2014).

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