The Real Cost of Prisons Weblog

The news was an economic gut punch to Coldwater and Ionia, where prisons have been a steady enterprise that helps pay the bills.

"When we lose a prison, it's a very big deal," said Ionia Mayor Dan Balice.

Balice said it's hoped that most of the 221 employees from the Deerfield Correctional Facility can be transferred to other prison jobs locally or within commuting distance.

Closing the Deerfield Correctional Facility will still leave Ionia with four prisons.

Balice, who has been mayor for 20 years, said Ionia has welcomed prisons as a steady employer with good wages and benefits. He said losing Deerfield could cost the city more than $200,000 in revenue from income taxes, water payments and state revenue sharing.

Revenue sharing is based on population, and the state counts prison inmates as half a person. Losing nearly 1,200 inmates will cost Coldwater 600 people in its revenue-sharing count.

In Coldwater, where Camp Branch prison will close, Mayor Eugene Wallace said he understands the need for the state to scale back, but said, "the cuts are hard to handle. Your concern is for the people."

Camp Branch employs 113 people and can house up to 710 inmates.

"I always figured prisons are a recession-proof industry. I guess I've been proven wrong," Wallace said.

The prison closings set the stage for a battle in 2009 over prison spending. Granholm has pressed for reducing the number of prisoners through alternative sentencing and, ultimately, changes in the way criminal sentences are structured.

In the past two years, paroles and other changes in release policies have cut the number of inmates in state prisons from around 51,000 to 49,000. It's the first time in seven years that fewer than 50,000 inmates are in prisons.

Pat Caruso, director of the Michigan Department of Corrections, said the roughly 1,760 inmates from the prisons closing in Ionia and Coldwater will be transferred to other prisons with available beds. In all, the state has about 2,500 more prison beds than expected.

"There's not going to be anybody released as a result of closing these prisons," she said. "We have beds available."

But Sen. Alan Cropsey, R-DeWitt, chairman of the Senate subcommittee on prison spending, wasn't buying it.

Cropsey opposes the closures, and said they are part of a dangerous trend of putting potentially dangerous people on the street.

"I really believe we are having a bad impact on the public safety in Michigan," Cropsey said. "How many more people are going to be victimized? ... The governor is going to have to answer to that."

Corrections department spokesman Russ Marlan dismissed Cropsey's comments as fear-mongering.

"I don't think you can scare citizens into spending money they don't need to spend," Marlan said.

State Budget Director Bob Emerson called Granholm's cuts a modest step to balance a budget that he said will surely slide again into red ink in 2009 without a hoped-for federal stimulus plan promised by President-elect Barack Obama.

The plan cuts $134 million and shifts another $11.8 million out of the state general fund to balance it, $10 million of that from unused college grants.

http://www.detnews.com/apps/pbcs.dll/article?AID=/20081211/POLITICS/81211037 0/1409/METRO

Detroit News

Thursday, December 11, 2008

Prison closings begin state budget cuts

Granholm could issue a new round of reductions after officials meet Jan. 9to review state revenue.

Gary Heinlein and Mark Hornbeck / Detroit News Lansing Bureau

LANSING -- State officials and lawmakers who approved closing two prisons and a girls' juvenile reform school as part of $134 million in state budget cuts Wednesday agree it's only the beginning.

Because of the year-old national recession and the nearly bankrupt autoindustry, additional spending cuts are coming as early as next month.

"We recognize the numbers every day get worse," said Robert Emerson, statebudget director. He called Wednesday's reductions -- proposed by Gov. Jennifer Granholm and approved by the House and Senate appropriations committees hours later -- "a moderate step to prepare for whatever comes next."

"There's going to be more that needs to be done," Emerson said. "How much,we can't say today. You'd have to be blind not to see we have a structural problem we'll have to address over the next two years."

Treasurer Robert Kleine added: "It's pretty obvious to everybody the worst is yet to come. We're in a very serious recession that could be as bad as in the early '80s."

The state budget for this year still has a $265 million hole even after Wednesday's reductions, the Senate Fiscal Agency estimates.

Republicans called for deeper cuts to erase the looming deficit, but most on the appropriations committees voted in favor of the executive order reductions. The full Legislature does not vote on them.

Numbers crunchers will huddle Jan. 9 to get a better grip on expected taxreceipts. Granholm could issue another round of cuts then.

The only chance the state has to get some relief is a proposed federal stimulus package early next year that would fund up to $1 trillion nationwide for road projects, Medicaid health care for the poor, food stamps, school buildings and other projects and services. It's not known what Michigan's share of that would be, and Republicans warned not to rely on this one-time windfall to make ends meet.

Wednesday's cuts will shutter on April 1 a 1,200-bed prison in Ionia and a 700-bed prison camp in Coldwater, saving $26 million. The girls' training facility in Adrian also will be closed.

No inmates will be released because the prison population, which once topped 51,000, is now about 49,000. Prisoners will be moved to empty beds elsewhere.

Most of the 333 employees at the prison and camp will be transferred to other corrections facilities that have vacancies, but some workers will lose their jobs, officials said. Sen. Alan Cropsey, R-DeWitt, said the prison closings eventually will threaten public safety.

"The focus of these cuts is on depopulating the prisons and will have an impact on crime victimization in this state," he said. Other cuts include $63 million from the human services department. Officials say the welfare caseload has been reduced because new rules restrict eligibility, and there is less need for day care programs when the high unemployment rate means more parents are at home. The Adrian reform school also is included in this budget.

Also cut: $632,000 from military and veterans' affairs, half of it from the Grand Rapids Veterans' Home.

The cuts were needed because revenues will come up short of May projections by $540 million.

The governor intends to make up the remainder of the shortfall with $440 million left over from the previous budget year -- $300 million more than expected.

Spared from cuts were aid to public schools and colleges and revenue sharing to municipalities.

You can reach Gary Heinlein at (517) 371-3660 or gheinlein@detnews.com.

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http://www.detnews.com/apps/pbcs.dll/article?AID=/20081210/OPINION01/8121003
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Detroit News

Wednesday, December 10, 2008

Editorial: Today's state budget cuts aren't nearly big enough

The $120 million to $150 million in budget cuts Gov. Jennifer Granholm is expected to present to lawmakers today do not begin to address state government's financial problems.

As her aides note, they aren't even intended to fully handle the projected revenue shortfall in the current budget. If they are a prelude to a more serious and thorough review of state spending, OK. But they look like merely another stopgap move in a long series of efforts to paper over Michigan's structural spending problem.

The budget cuts that were to be outlined today are in response to a
projected $540 million shortage in anticipated state revenues for the
current budget.

A surplus from the last budget year of about $300 million is being used to cover a portion of the shortfall, and the executive order cuts are planned to cover about half of the remaining $240 million shortage.

Administration aides say other cuts may be forthcoming, depending on how much the state receives from an anticipated federal economic stimulus program.

But this is still chewing-gum and bailing-wire budgeting -- the same type that led the state to use accounting gimmicks and one-time revenue boosts to the tune of $7 billion from 2001 through 2006. Ultimately taxes were hiked $1.2 billion to cover the hole.

And now the process of avoidance budgeting is beginning anew.

The Detroit-based auto industry is imploding -- Chrysler and General Motors have said they may not survive the end of the year without a federal bailout.

Even if federal assistance allows the automakers to move forward, their survival plans call for a dramatically smaller work force, fewer product offerings and a huge reduction in the number of their dealers. Michigan's economy will never be the same.

Last month's University of Michigan economic forecast for the state shows nothing but bad news until at least 2011.

And other analysts think both the state Budget Office and the U-M economists are too optimistic. Gary Olson, head of the state Senate's Fiscal Agency, has said the revenue shortfall could amount to $900 million.

Robert Daddow, deputy Oakland County executive, has long been critical of the state's budgeting assumptions. He notes that taxable value, the base for property tax revenues, is down 4.5 percent for Oakland County and could get worse. Oakland amounts to about one-fifth of the state's total property value.

The picture is similar in the rest of Metro Detroit. Daddow contends this will present serious problems for the state School Aid Fund. Daddow is also projecting a shortfall of $1 billion or more in state revenues for the 2010 state budget.

The state administration and lawmakers can't wait to get serious about restructuring government and trimming spending. With declining personal incomes and business costs that are already uncompetitive, another tax hike is out of the question.

The longer serious spending cuts are delayed, the more drastic they will have to be -- making strategic reforms to the way business is done in state government much more difficult.

Today's cuts have to be seen as a mere down payment on the serious work yet to be done.

http://www.freep.com/article/20081211/NEWS06/812110347/1008