How Sequestration Will Impact Michigan

  Full report in PDF

Deep cuts to programs that help many Michiganians gain economic security took effect March 1, 2013, following Congress’ inability to reach an agreement on an alternative to sequestration. Although President Obama was able to negotiate a “Fiscal Cliff Bill” in January, which lessened the severity of sequestration for the current fiscal year (which ends September 30, 2013), the automatic across-the-board cuts will severely cut federal investments in education, healthcare, employment, and other programs that lift up lowincome families and grow the middle class.

Over the past decade, Michigan’s reliance on federal funds has steadily grown, from 27.6% of the state’s total budget in 2000, to 41.3% today. As noted in the chart, that percentage was 44.3% in 2010-2011 due to temporary stimulus funds.

As full effects of the sequester continue to unfold, Michigan’s most vulnerable residents will feel the brunt of the budget cuts and the state’s economic recovery will be compromised.

HEALTH

The health of thousands of Michiganians will be affected by sequestration cuts. Particularly vulnerable are low-income children and their families. The  table to the left shows a sample of affected programs.

JOBS

As the economy continues its recovery, investment in jobs remains an important strategy for strengthening the private sector, reducing unemployment and growing the middle class. Programs that target unemployment will be subjected to sequestration cuts. Right is a sample of affected programs.

COMUNITY & FAMILY WELL-BEING

Community resources and the well-being of families affect the opportunities available to children as they grow into adults. Sequestration will cut funding for programs that keep many families out of poverty, and keep them healthy and safe. Below is a sample of affected programs.

HOUSING

Sequestration cuts will affect the housing options of many low-income Michigan families, homeless individuals, seniors and people with disabilities. A lack of affordable and safe housing puts the lives and safety of thousands of Michiganians at risk, and can have a negative impact on the academic success of low-income children. Some of the affected housing programs include:

  • The Community Development Block Grant, which will see a cut of around $5.6 million. The CDBG helps local governments provide affordable housing to low-income families, and create jobs by attracting and retaining businesses in struggling communities across the state.
  • The HOME Investment Partnership Program, which will be cut by an estimated $1.5 million. The HOME program helps Michigan cities and countries purchase and rehabilitate properties to create affordable rental housing for low-income households. This program also helps low-income families purchase or renovate non-luxury homes.
  • The Housing Choice Voucher program, which willbe cut by $2.6 million and leave an estimated 2,640 very low-income Michigan families, seniors and disabled individuals without rental vouchers to help them stay in their apartments. Affected households will likely be forced to cut back on food, medicine and other necessities in order to afford their rent. Others may be put at risk of becoming homeless.
  • The Public Housing Program, which will see a reduction of about $4.4 million. The loss of funds will impact local housing authorities’ ability to operate housing projects in Michigan, forcing them to consider furloughing staff, reduce security in housing projects, postpone or forego needed repairs to buildings, and even raise rents and utility costs for new and current residents. The end result will likely be a deterioration of public housing complexes, and decreased access to safe and affordable housing for low-income residents in the state.
  • Homeless Assistance programs, which will be cut by around $3.6 million. Lost funds for these programs will affect the state’s ability to provide emergency shelter for thousands of homeless Michiganians, and undermine efforts to end homelessness in the state.

EDUCATION

Sequestration cuts to education programs will cost the state millions of dollars in lost funds, affect thousands of children, and cause the loss of thousands of jobs. Programs that would be subjected to deep cuts are those that help low-income children succeed academically, strengthen our public school system, promote social mobility by facilitating access to higher education, and create a workforce capable of competing in an increasingly demanding global economy. Below is a sample of affected programs.