Contrary to Gov. Jennifer Granholm’s wishes, Republicans in the state House of Representatives passed a bill seeking to maintain the Michigan Merit Award scholarships at the expense of $60 million to the state’s General Fund. The scholarships would be in danger of being cut from $2,500 per person to $500 under Granholm’s proposal.

The measure proposed diverting $60 million in tobacco settlement money from Granholm’s $162.5 million Medicaid expansion plan, replacing the missing Medicaid funding with money from the depleted General Fund. The vote was split almost entirely down party lines, with only one Democrat voting with the Republican majority.

The governor is openly opposed to the change in her budget proposal and said that the measure now shifts the responsibility for balancing the budget to Republican shoulders.

“The budget’s now out of balance. The Republicans are going to have to show us where they’re going to get the $60 million,” Granholm spokeswoman Mary Detloff said.

But House Appropriations Committee Chairman Marc Shulman (R-West Bloomfield) said finding alternative sources of funding will not pose a problem.

“Basically we found some money in the General Fund to fund one of the top priorities we had in this budget,” Shulman said. “The Democrats maybe don’t view the Merit Award as one of their top priorities.”

Shulman added that the Republican plan preserves all of Granholm’s health care proposals, including prescription drugs and community health care programs for low-income residents.

Rep. Chris Kolb (D-Ann Arbor) said the awards were not a partisan issue, but added that Democratic criticism of the proposal stems from the procedural steps the Republicans took to pass it.

“People should not look at this as we either do or do not support Merit. The Merit scholarships are not going to be a partisan issue,” Kolb said. “There was a virtual agreement on the budget and 12 hours or so before the vote, the Republicans decided to withdraw the tobacco settlement money without any real discussion. It’s just not fiscally

responsible to do it this way.”

Republican House members have not yet proposed specific cuts to replace the $60 million taken from the general fund, but Emily Gerkin, spokeswoman for Speaker Rick Johnson (R-LeRoy) said they will “find the money.” But, Democrats are not satisfied with this answer, saying the size of the budget gap is too sizable to be corrected easily, Kolb said.

“There’s a gaping hole in the budget. Sixty million dollars in a balanced budget is a big problem,” Kolb said. “You can’t just take a little bit here and a little bit there.”

Both parties agree that the issue has not been settled permanently and Shulman calls the vote the first step in the process. The bill needs to pass in the Senate before seeking final approval from the governor.

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