FISCAL IMPACT
The bill would increase FY 2011-12 Adjusted Gross State appropriations by $377.5 million and State GF/GP appropriations by $182.9 million. The FY 2011-12 GF/GP balance sheet established during the budget target-setting process did not include the $14.0 million in additional appropriations proposed by the Senate. However, due to the continuation of the use tax on Medicaid health plans for the first two quarters of the fiscal year, the tax generated $33.8 million in net additional GF/GP revenue, which would offset the additional appropriations.
The bill would provide funding for the following budget areas:
Community Health: As recommended by the SBO, second-year funding of $119.4 million is provided for the Medicaid Electronic Health Record Incentive Program, of which $1.4 million is GF/GP match for Federal funds; first-year funding was included in a supplemental bill for FY 2010-11.
The final negotiations on the health claims assessment were not completed until after the enactment of the FY 2011-12 Department of Community Health (DCH) budget. Due to the continuation of the use tax on Medicaid health plans for the first two quarters of the fiscal year, appropriation adjustments to increase Federal ($133.0 million) and GF/GP ($167.3 million) spending, and reduce State restricted revenue ($99.2 million), are required.
The bill also includes legislatively initiated Adjusted Gross supplemental appropriations for a second disproportionate share pool for hospitals ($10.0 million), a new uncompensated care pool ($10.0 million), graduate medical education ($8.9 million), Wayne State University's psychiatric program ($8.5 million), restoration of Medicaid chiropractic coverage ($450,000), traumatic brain injury diagnostic programs ($200,000), and donated dental services ($25,000). The GF/GP total for these appropriations would be $6.7 million.
Corrections: The bill includes a legislatively initiated appropriation of $400,000 for the cleanup of Camp Brighton correctional facility property.
Education: Executive Order 2011-8 consolidated Michigan's early childhood development programs and funding by creating the Michigan Office of Great Start within the Department of Education (DOE). This SBO supplemental request transfers $206.2 million Adjusted Gross and $42.0 million GF/GP from the Department of Human Services (DHS) to the DOE, and adds $89,000 in private foundation revenue to fund the new position of Great Start Office Director in the DOE.
Executive Office: Public Act 102 of 2011 created the Governor's Council on Educator Effectiveness. One of the charges of this Council is to provide a report by April 30, 2012, regarding a student growth and assessment tool and a State evaluation tool for teachers and school administrators. As recommended by the SBO, funding of $200,000 GF/GP is included for staffing and support for the Council.
Human Services: The bill transfers $615,000 from the foster care payments line item to create a separate $615,000 line item for Indian tribal foster care payments, and reinstates boilerplate language (Sec. 301) to allow the DHS to reimburse tribal governments for their costs associated with children under tribal court jurisdiction. As mentioned above, the bill implements Executive Order 2011-8, which consolidated Michigan's early childhood development programs, by transferring $206.2 million from the DHS to the DOE for the Michigan Office of Great Start.
The bill also includes legislatively initiated appropriations (Adjusted Gross and GF/GP) of $4.25 million for special needs adoption subsidies and $25,000 for a juvenile justice study, both of which were vetoed by the Governor for FY 2011-12.
Legislature: The bill includes legislatively initiated GF/GP appropriations of $470,000 for retirement costs for the Legislative Council and the Legislative Service Bureau, and $51,000 for the annual dues payment for the National Conference of Commissioners on Uniform State Laws (NCCUSL).
Licensing and Regulatory Affairs: As recommended by the SBO, $9.85 million in Federal funding from the U.S. Department of Health and Human Services is appropriated to expand the State's efforts to establish a State-based health benefit exchange, called MIHealth Marketplace. According to the SBO, the Federal grant awards will be announced by November 15, 2011. Another SBO recommendation that is appropriated in the bill is $1.5 million in State Restricted tax tribunal funds for the Michigan administrative hearing system for costs associated with reducing the backlog of small claims property tax evaluation appeals.
The bill also includes a legislatively initiated appropriation of $1.5 million (Adjusted Gross and GF/GP) for centers for independent living.
Treasury-Strategic Fund: The bill includes a legislatively initiated $680,100 GF/GP appropriation for precollege engineering programs that were vetoed by the Governor for FY 2011-12.
Boilerplate Language Sections
Sec. 201. Records amount of total State Spending and payments to local units of government included in the bill.
Sec. 202. Subjects appropriations and expenditures in the bill to the provisions of the Management and Budget Act.
Sec. 251. Sets criteria for $10.0 million DCH appropriation for small rural hospitals.
Sec. 252. Allocates $8.86 million DCH appropriation for graduate medical education as an across-the-board rate increase.
Sec. 253. Directs the DCH to implement the Michigan patient care transformation program only through direct agreements with eligible physicians and physician organizations.
Sec. 254. Implements the funding reduction for community substance abuse prevention, education, and treatment line-item as an across-the-board percentage reduction.
Sec. 255. Directs the DCH to restore Medicaid chiropractic services, effective January 1, 2012.
Sec. 256. Sets criteria for the $200,000 DCH appropriation for the injury control intervention project.
Sec. 271. Requires a report from the DOE regarding early childhood funding.
Sec. 301. Requires the DHS to provide 50.0% reimbursement to Indian tribal governments for foster care expenditures.
Sec. 302. Requires a report from the DHS regarding adoption subsidies and sets criteria for the $4.25 million DHS appropriation for special needs adoption subsidies.
Sec. 303. Requires the DHS to contract with the Michigan Public Health Institute to conduct a behavioral health study of juvenile justice facilities, and sets parameters for the study.
Sec. 401. Earmarks $680,100 to Treasury, Michigan Strategic Fund for precollege engineering programs for Detroit and the Grand Rapids areas.
Sec. 402. Adjusts the Economic Vitality Incentive Program (EVIP) to allow for full payments to cities, villages, and townships that completed the program requirements under transparency and accountability by October 1, but whose documentation did not reach the Department of Treasury by that date. This would allow 18 local governments to receive full payment under this category. Payments to these local governments under this portion of the program total $395,725 in FY 2011-12. The bill also would extend the time for local governments to submit documentation and certification on future due dates under this program and clarifies that if required documentation is not submitted by the first day of a payment month, then the payment for that month is forfeited.
Enacting Section 1: Repeals Sec. 951 of the FY 2011-12 General Government appropriation act which refers to State revenue sharing for cities, villages, and townships; repeals Sec. 614 of the FY 2011-12 DHS appropriation act which refers to indigent burial, and Secs. 292, 670, 673, and 680 to reflect the transfer of child development funds from DHS to the DOE pursuant to Executive Order 2011-8.
Enacting Section 2: Tie-bars this bill to House Bill 4445, an FY 2011-12 School Aid supplemental bill.
Fiscal Analysts: Ellen Jeffries and Steve Angelotti
Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent. 5014/1112 |