Mackinac Center Offers Granholm, Legislature Specifics for More than $2 Billion in Budget Savings

For Immediate Release

MIDLAND — If Gov. Jennifer Granholm and the Michigan Legislature need specifics on how to close Michigan’s looming $1.7 billion budget deficit, they need look no further than the Mackinac Center for Public Policy’s new report on balancing the state budget, released today.

Center researchers examined the fiscal year 2003 state budget department by department and line item by line item to come up with a grand total of $2,029,715,677 in recommended spending reductions and revenue enhancements for fiscal year 2004 — more than enough to erase the projected deficit. More than $1.5 billion of that total can be achieved through reductions in General Fund/General Purpose spending; almost $345 million can be achieved through decreases in state revenue sharing; the rest comes from ideas such as the sale of the state fairgrounds and conference centers, which could produce a one-time income of $59.6 million. If all 200-plus recommendations in the Mackinac Center study were adopted — including those with regard to federal funds passed through the state budget — the state budget would be reduced by 14.2 percent, or a total of $3.7 billion.

"Some savings would result from scaling back current programs, others from contracting with more efficient service providers, still others from outright elimination of programs the private sector is more suitably equipped to handle," said Michael LaFaive, director of fiscal policy and author of the study. "Gov. Granholm seems very serious about her pledge that ‘everything is on the table’ with regard to where the state budget can be cut. She and other lawmakers now have a document that shows how to balance the budget," LaFaive said.

Among the Mackinac Center’s recommendations to Gov. Granholm and the new Legislature:

  • Ending the Michigan Department of Career Development, eliminating nearly $460 million;

  • Elimination of the Michigan Council for Arts and Cultural Affairs, saving more than $24 million;

  • Selling three state-owned properties: the state fairgrounds in Detroit and Escanaba, plus the MacMullan Conference Center for a total one-time income of almost $70 million;

  • Hiking fees to state parks to the levels at which they would pay the total bill for park operations, for annual income of more than $25 million;

  • Contracting out for management of the state prison system for savings of $253 million;

  • Rolling back spending on community colleges and higher education for total savings of more than $320 million;

  • Outsourcing management of Michigan’s two veterans’ hospitals for savings of more than $22 million;

  • Reducing by 50 percent the revenue sharing to local units of government that is not constitutionally mandated, for savings of nearly $345 million;

  • Devolving State Police road patrols to counties for savings of $65 million.

"Over 12 years, the Engler administration took steps to limit the size of state government, " LaFaive said. "But there is far more work to be done. It is the Mackinac Center for Public Policy’s hope that Gov. Granholm will take much of Lansing’s power and return it to where it rightfully belongs: the homes and families and individuals of the Great Lakes State."

All $3.7 billion-worth of recommended budget savings may be viewed in a PDF document at (157 pages), or by contacting the Mackinac Center at (989) 631-0900. Upcoming state appropriations bills may be monitored at, a legislative database operated by the Mackinac Center.

The Mackinac Center for Public Policy is a 15-year-old, nonprofit, nonpartisan research and educational institute based in Midland.

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Contact: Michael LaFaive, Director of Fiscal Policy at (989) 631-0900