LANSING (AP) – With little time left, lawmakers and Gov. Jennifer Granholm were still divided yesterday over whether more private providers should handle adoption, foster care and juvenile justice services – the big sticking point in resolving the state budget.

But other signs of progress emerged as the Senate passed spending plans for the state police and other state departments. The House also began passing some department budgets yesterday night, and more voting was expected tomorrow in the Legislature.

Final action could depend on reaching an agreement over whether more functions in the Department of Human Services should be handed to private agencies.

The Legislature has until tomorrow to pass the budget bills to avoid another partial government shutdown such as the one that occurred in the early hours of Oct. 1.

Sen. Bill Hardiman, (R-Kentwood), is among those pushing to put more DHS services into private hands.

He said it costs the state $550 a day to house each youthful offender at the W.J. Maxey Boys Training School in Whitmore Lake, but it would cost only $225 to $250 a day if the youths were dealt with through private companies.

“We need to move forward in this area. The money we save, we can spend in other needed areas,” Hardiman said. “To ignore this, I think, is absolutely wrong.”

Granholm, a Democrat, opposes giving more DHS services to private providers. So do labor unions representing state workers who would lose their jobs if their work is taken over by private agencies.

Democrats have argued that handing more responsibility for adoptions, foster care and juvenile justice over to private agencies is risky and would not necessarily save money. They have said it could endanger children at a time the state is under scrutiny for the deaths of some foster children.

But Hardiman points out that private agencies already provide 40 percent of such services to Michigan children. He wants to partially close Maxey and send some offenders to less expensive facilities.

Negotiators from the Republican-led Senate and Democratic-controlled House have mostly agreed on handing more services over to private agencies, despite Granholm’s objections, Hardiman said. But because the governor could veto the bill if she doesn’t like it, negotiations continue.

Lawmakers avoided disagreements over whether to increase hunting and fishing fees and environmental permit fees by delaying the decisions until later. Budget bills for the departments of Environmental Quality and Natural Resources assume that fees would rise but give the Legislature until Jan. 15 to vote on specific increases.

Republicans and some Democrats have been reluctant to embrace higher fees, even though both departments have said staff and services will have to be reduced if the fees aren’t raised.

DEQ officials have warned that they might have to lay off 200 to 300 workers and turn some permitting functions over to the federal government, while the DNR – which has not raised hunting and fishing fees since 1996 – could lay off 79 workers. Other cutbacks include closing two state forest campgrounds, two fish hatcheries and some DNR field offices.

Rep. Doug Bennet (D-Muskegon) said some of the environmental fees have not been raised in 10 or 15 years and cited concerns within the business community about permitting delays if funding is not increased.

“It’s a serious, significant problem,” he said, arguing that the delays could hurt economic development. Others say the fee hikes would hurt businesses.

Sen. Michelle McManus (R-Lake Leelanau) said legislative leaders have told her they intend to fully fund the DNR, whether through fee increases or other options.

She said she personally hasn’t take a position on higher fees proposed by Granholm.

“It certainly is a problem that requires a legislative solution, rather than a department solution,” McManus said.

Counting other forms of funding, including compensation to help cover unfunded payments in a tuition waiver program for American Indians, some of the state’s 12 smaller universities will get a bit more than a 1 percent increase. Lake Superior State University would get a 2.4-percent boost.

The Legislature’s bill retains about $56 million in tuition grants for students at private schools.

The House also passed a bill that would provide an average 1 percent funding increase for community college operations.

The House also adopted a Department of Community Health budget that doesn’t kick any groups off of Medicaid coverage. The chamber also passed a spending bill for the state’s prison system that would reflect some previously agreed to housing unit reductions and include more use of Global Positioning System units to track parolees.

The Senate could also vote on those bills today.

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