Will We Let Michigan Fall Off the Next Cliff?

Folks in Michigan are anxiously awaiting the release of the Governor’s budget on Thursday, with many hot issues already making the news in anticipation of the its release – a sizable increase in early childhood education funding, expansion of Medicaid to cover more low-income children and families, or continued efforts around education reform.  While the buzz in Lansing is all about the Governor’s upcoming budget, it’s important to realize that everything that will be determined by the Governor and Legislature regarding state priorities is completely dependent on the federal budget.

Michigan’s Children’s latest Budget Basics publication takes a closer look at just how reliant critical programs in Michigan are on federal funding.  In the current state fiscal year, which began on October 1, 2012 and goes to September 30, 2013, over 40 percent of Michigan’s entire state budget is supported by federal sources.  However, a significantly higher reliance on federal funding supports budgets that serve Michigan children, youth and families – particularly those most challenged by their circumstances.  Specifically, federal funds support:

  • two-thirds of the Michigan Department of Community Health (DCH) budget,
  • three-quarters of the Michigan Department of Education (MDE) budget (note: this does not include the School Aid budget), and
  • four-fifths of the Michigan Department of Human Services (DHS) budget.

Even more important to note is that these federal resources support Michigan’s efforts to address huge disparities in child and family outcomes – disparities that begin early in a child’s life and can continue to grow if not recognized and addressed.  Federal funds pay for equity promoting programs like Medicaid and school and community-based health services through DCH, nutrition programs and child abuse and neglect prevention efforts through DHS, and child care assistance and support for low-income and special needs students through MDE.  All of these programs work to reduce disparities in outcomes, and many could have an even greater impact if funded at levels that ensure program fidelity.

Unfortunately, the federal budget, like Michigan’s budget, doesn’t provide enough resource to ensure access to high quality programs for the most struggling children and families who would benefit from them.  This is evident by the latest Kids Count Data that show that our children continue to struggle and that disparities persist.  At the same time that we will be attempting to address our growing child poverty, increases in child maltreatment, and lack of progress on educational achievement; Michigan will surely be facing some cuts in federal support as a result of the second pending federal fiscal cliff.  The only question is, by how much?

Perhaps as we in Michigan prepare for the exciting budget debates that will soon begin in Lansing, we should also consider the implications of the federal budget and how deficit-reducing efforts may further increase the disparities that we already see in child and family outcomes.  And while we’re considering those implications, we may want to pass on our best thoughts on how to address the federal budget to Congress in a balanced way.

-Mina Hong

* The next fiscal cliff is a combination of the pending sequester as well as the expiration of the continuing resolution that is currently funding the federal government through March 27, 2013.  Congress still must address a balanced approach to offset sequestration and pass a federal budget through the remainder of the federal fiscal year (which happens to be the same fiscal year as Michigan’s).  More information about the federal budget is available on our website.