LANSING – The Legislature began Tuesday to put its stamp on the 2015-16 fiscal year budget as 15 budget bills for departments and major budget areas cleared Appropriations subcommittees, and it became clear the Republican majorities in the House and Senate are moving in a much different direction than Governor Rick Snyder.

The first, most significant difference in spending priorities came from subcommittees in both the House and Senate that handle the Department of Community Health budget. Both rejected Snyder’s call to increase the tax on all health insurance claims, known as the Health Insurance Claims Assessment, from 0.75 percent to 1.3 percent and lift the cap on what the HICA can collect.

Snyder used the increase to replace $180.1 million in General Fund, easing pressure on the entire budget that relies on the General Fund. Based on the legislative rejection of a HICA increase, legislators will now have to find a big chunk of General Fund through savings or cuts from other programs ($127.85 million in the House, $130.1 million in the Senate).

At this point, it is unclear how the House and Senate will pay for putting much more General Fund into the Community Health budget than Snyder. Rep. Al Pscholka (R-Stevensville), the House Appropriations chair, and Sen. Dave Hildenbrand (R-Lowell), the Senate Appropriations chair, both said those details would emerge as subcommittees continue to approve budget bills.

“It’s going to come from just about every part of the budget,” Pscholka said. “It will depend. We’re going to see some reductions in general government, we are not big on film credits … so that’s 50 million right off the top. It will be sprinkled throughout the budget. And we will have a balanced budget.”

Hildenbrand said that while negotiations are ongoing, “we’re comfortable to realize savings in other areas to not have to go down this road” of a HICA increase.

“We’re not pursuing the HICA tax increase the governor proposed so we looked throughout state government where we could realize those savings,” he said. “You’ll see, as the subcommittees are reporting, some shifting of monies around (and General Fund reductions).”

He said there would be a reduction in the amount of money going into the Budget Stabilization Fund, but would not detail further how or where his members were making such General Fund reductions.

“We’re still uneasy about the revenue projections. This is our third shot at this whole HICA proposal and effort, so there’s a lot of skepticism by members about what this is generating and would generate,” Hildenbrand said. “Until we get a better handle on the numbers, we don’t see it as necessary to pursue this.”

Every subcommittee that has yet to report a budget is scheduled to meet this week and all are expected to approve their budget bills.

Many points of differences came Tuesday with the DCH budget proposals. The Senate subcommittee opposed Snyder’s plan to fund Graduate Medical Education out of a new tax on hospitals while the House subcommittee supports Snyder’s proposal. And both the House and Senate subcommittees are balking at Snyder’s proposal to remove the pharmaceutical program for Medicaid from the health plans that insure Medicaid patients and instead have the state run it.

A gulf is also emerging between Snyder and the House on K-12 spending, where the House prefers to put money into the foundation grant for operations instead of allocating increases through categoricals.

And the subcommittees are presuming the Legislature will not support many of the fee increases Snyder has proposed to help fund some programs like retail food inspections and liquor control.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com