With just 10 days to go before the deadline for approving the 2009-10 state budget, some of the key battles are beginning to shape up.

In the face of a $2.8-billion deficit, Senate Majority Leader Mike Bishop, R-Rochester, and Speaker of the House Andy Dillon, D-Redford Township, signed an agreement last week that would call for $1.2 billion in cuts. But during a Detroit Economic Club meeting Monday, Dillon said getting some of the cuts through the Democratic caucus will be a challenge. Among the most contentious proposals:

• The Department of Human Services budget, which includes Medicaid payments for health services to poor people, has cuts that many Democrats find unacceptable.

• The General Government budget includes 20% cuts in revenue sharing to communities, which already are suffering from declining property tax revenues.

• Promise Scholarships -- $4,000 grants to high school graduates who complete at least two years of post-secondary education -- got the ax, but are a pet project of Gov. Jennifer Granholm.


Hard sell ahead for legislative leaders

On the surface, Senate Majority Leader Mike Bishop and House Speaker Andy Dillon had a "Kumbaya" moment Monday, saying the state budget, including $1.2 billion in cuts, will be done by the Oct. 1 deadline and a government shutdown will be avoided.

While there may be agreement at the top, there are deep divisions among Democrats, Republicans and the groups that stand to have their slice of the pie devoured.

State Rep. Fred Miller, D-Mt. Clemens, said there is not support among the House Democratic caucus for the Dillon-Bishop agreement to cut at least $1.2 billion in state spending by Oct. 1 with the intention of seeking more revenue later to restore some cuts.

Asked if he trusted Dillon on that strategy, Miller said, "The Andy Dillon I know, I do trust. This strategy I don't trust."

Miller said the proposed cuts are "literally a matter of life and death," because they would reduce Medicaid payments to hospitals and nursing homes enough to put some on the brink of closure.

Gov. Jennifer Granholm has said the proposed cuts go too far, but has not said she will veto bills if both the House and Senate pass the budgets.

Even Dillon admitted during a meeting Monday of the Detroit Economic Club that he's not sure if the target numbers in some of the budgets would fly. He held out the possibility that targeted tax increases may have to be considered before Oct. 1.

"I don't think I can get the DHS budget out of the House," said Dillon, referring to the Department of Human Services budget that provides Medicaid funding.

He said he's worried about the 20% proposed cuts in revenue sharing to communities.

City managers from across the state are to meet with some key legislators Wednesday morning to make the case that they've already taken their fair share of cuts.

"We've already lost $25 million since 2002," said Sterling Heights City Manager Mark Vanderpool, noting the proposed cuts would cost the city an additional $1.2 million. "We've been able to avoid any significant reductions in public safety, but that is becoming very difficult to continue."

The Michigan Townships Association is urging its members to call lawmakers to deliver the same message.

"These cuts are going to mean more layoffs, no money for roads and possibly not being able to maintain the parks," said David Bertram, legislative manager for the association.

The $140-million cut for the Michigan Promise scholarship translates into a betrayal of the state's students, said Mike Boulus, executive director of the Presidents Council, State Universities of Michigan.

"Lawmakers have said loud and clear to our students: 'Don't bother trusting government,' " he said. "This is a countdown to chaos."

The problem and solution are clear, Bishop said during the meeting.

"Every level of state government is going to have to be trimmed back," he said. "We're going to see a massive contraction in state government that all of you are seeing in the private sector."

Even with the disagreements, everyone agrees they don't want a repeat of 2007, when state government was shut down for a few hours until a budget deal was reached.

Dillon said he expects the conference committees to complete their work by 5 p.m. today with lawmakers starting to vote on budgets Wednesday.