Funding Cut Letters Sent to Schools, Medicaid Providers

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Michigan schools are a step closer to losing some state funding for the current school year.

"I'm issuing a letter to schools across the state," Gov. Jennifer Granholm said Monday. The letter promises a $122-per-student cut in funding.

The state schools chief said again the letters should should tell local districts the cuts are real.

"I'd tell them to cut tomorrow," Flanagan said.

He made much the same statement last Thursday, suggesting cuts in busing. So what has he heard from school leaders since then?

"People have said to me directly they're going to strongly consider that," Flanagan said. "But I've had others tell me, candidly, they don't have the guts."

He says they're worried cutting busing would cause greater uproar than cutting classrooms. Now Flanagan is also suggesting cutting early childhood programs. Both, he says, are preferable to cuting core classroom services.

Granholm says the cuts can be prevented if the legislature passes a budget that includes a tax increase.

Some Republicans in the state House say it's unncessary. They point to a plan to put money in the school fund from the state's general budget. But the general fund has a deficit as well.

Republicans in the Senate last week pointed to a budget plan they passed that would have made a smaller cut to schools. Majority Leader Mike Bishop called the governor's statements late last week as political maneurving "at the worst possible time."

But the governor says she can't really consider the Senate plan since the House didn't pass it.

Cuts are also coming to Medicaid. Letters will go to hospitals and doctors office that accept the roughly 1.7 million low-income patients in the program.

The letters tell those providers the state will reduce its reimbursement for medical services by 6 percent for the remaining months of the fiscal year.

"It's certainly less likely [Medicaid providers] will take in new patients," state Medicaid Director Paul Rhinehart said.

Rhinehart says if the cuts continue some may even stop treating Medicaid patients altogether.

As the state moves forward with budget deficits for a fiscal year already halfway over, the governor says Medicaid and schools won't be the only ones targeted.

"Believe me, there's going to be cuts in other areas," she said.

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