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Welfare limits, education cuts kick in Saturday

Michigan's new state government spending plan kicks in Saturday, with lost welfare benefits for some families and education funding cuts among the repercussions.

Republican Gov. Rick Snyder acknowledges there's some short-term pain ahead in the state's new fiscal year, but says the plan puts Michigan on more stable financial footing for the future.

"These are difficult decisions ... (but) we're going to be well positioned for the long term," Snyder told The Associated Press in a phone call during his trade trip to Asia. "We're doing things in a structurally balanced way."

New spending plans for state departments and programs begin this weekend, but tax policy changes connected to the new fiscal year -- including business tax cuts and income taxes on some retirement income -- don't begin until Jan. 1.

The $47.4 billion budget, signed into law in June, resolves a projected $1.5 billion revenue shortfall and partially addresses long-term pension and health care liabilities for public employees. The 2011-12 budget also had to make up for $1 billion in revenue lost through the business tax cuts.

A stricter four-year, lifetime limit on welfare benefits could kick up to 14,000 families -- about 41,000 people -- off cash assistance during the fiscal year. Many would lose the help right away. A lawsuit was filed Friday in federal court seeking to stop the limits from taking effect and a court hearing was set for Tuesday.

Michigan also will measure certain financial assets to help determine eligibility for food assistance. People with more than $5,000 in regular savings or checking accounts, for example, will no longer be eligible for food stamps under rules adopted by the Michigan Department of Human Services.

Social service agencies say it's a bad move, particularly with the state's sluggish economy pushing more families into poverty.

"With the number of children living in poverty in Michigan rising every day, putting more roadblocks in the way of families that need help now makes absolutely no sense," Jack Kresnak, president and CEO of Michigan's Children, said in a statement this week.

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Welfare limits, education cuts kick in Saturday

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