Summary: Senate Passed

MILITARY AND VETERANS AFFAIRS

FY 2004-05 House Bill 5522 (H-1)

Analyst: Hannah Lee

	FY 2003-04 YTD (as of 2/12/04)		House			*Difference: Senate from FY 2003-04 YTD*
	FY 2003-04 YTD (as of 2/12/04)	Executive	House	Senate	Enacted	*Amount*	%
IDG/IDT	$300,000	$603,000	$642,500	$1,042,500		$742,500	247.5
Federal	40,627,900	45,418,100	45,418,100	45,418,100		4,790,200	11.8
Local	0	0	0	0		0	0.0
Private	1,270,700	1,282,300	1,282,300	1,282,300		11,600	0.9
Restricted	24,570,100	25,599,800	25,599,800	25,599,800		1,029,700	4.2
GF/GP	36,328,800	37,377,900	38,563,000	37,563,100		1,234,300	3.4
Gross	$103,097,500	$110,281,100	$111,505,700	$110,905,800		*$7,808,300*	*7.6*
FTEs	1,079.0	1,023.0	1,023.0	1,023.0		(56.0)	(5.2)

Overview

The Department of Military and Veterans Affairs is charged with the training and administration of Army and Air National Guard forces, providing combat-ready military forces during times of national emergency, and performing civil relief operations under the command of the governor during state emergencies. The Department’s budget includes administrative and maintenance costs associated with these responsibilities, as well as several National Guard-related programs, such as the Challenge Program and the National Guard Education Assistance Program. The Department has oversight over the following veterans-related programs: state-licensed nursing care at veterans homes in Grand Rapids and Marquette, grant funding to veterans service organizations, and the Michigan Veterans Trust Fund.

Major Budget Changes from FY 2003-04 YTD Appropriations:	FY 2003-04 YTD (as of 2/12/04)	Senate Passed
*1. Challenge Program* Exec. Rec., House and Senate: Increased $125,000 GF/GP to help fund two 50-pupil Challenge classes ─ a voluntary boot camp-style program for high school dropouts funded by the federal National Guard Bureau on a 60/40 federal/state basis. House: Added $39,500 IDG above Exec. Rec. to reflect the actual IDG received in FY 2003-04. Senate:Included additional $439,500 IDG above Exec. Rec. from FIA to fund more than two 50-pupil classes	Gross IDG Federal Private GF/GP	$3,296,900 200,000 1,651,200 845,700 $600,000	$564,500 439,500 0 0 $125,000
*2. D.J. Jacobetti Veterans’ Home – Medicare and Medicaid* Exec. Rec., House and Senate: Increased federal revenue at the D.J. Jacobetti Veterans’ Home due to tightening criteria for providing free prescription drugs to a portion of the Veterans at the home. As a result, there has been an increase in billing to the Veterans’ insurance companies resulting in increased Medicare and Medicaid revenues. Also reflects increase in Medicare revenue due to a change in Medicare policy allowing the Home to bill for blood-sugar testing supplies.	Gross Federal Restricted GF/GP	$12,945,600 4,073,700 4,391,500 $4,480,400	$87,000 87,000 0 $0
*3. Veterans Trust Fund Tuition Grant* House: Increased $1.0 million GF/GP to fund tuition grant program completely funded by the Michigan Veterans Trust Fund. Senate:Did not include $1.0 million GF/GP.	Gross Restricted GF/GP	$3,746,500 3,746,500 $0	$0 0 $0
*4. Headquarters and Armories* Exec. Rec., House and Senate: Included federal revenue available for security contracts, personnel costs, and maintenance costs.	Gross Federal Restricted GF/GP	$9,041,200 1,891,300 350,000 $6,799,900	$300,000 300,000 0 $0
*5. Military Training Sites* Exec. Rec., House and Senate: Included federal revenue available for security contracts, personnel costs, and maintenance costs.	Gross Federal GF/GP	$14,860,200 12,140,400 $2,719,800	$2,000,000 2,000,000 $0
*6. Special Maintenance– Federal* Exec. Rec., House and Senate: Included federal revenue available for construction, maintenance and upkeep at the training sites and logistical facilities used as training areas for the Michigan National Guard.	Gross Federal	$4,300,000 4,300,000	$1,000,000 $1,000,000
*7. Information Technology – Base Reduction and Budgetary Savings* Exec. Rec., House and Senate: Included reduction of operating costs and employee-related savings in information technology.	Gross Federal Restricted GF/GP	$1,170,300 560,400 160,500 $449,400	($78,900) (12,000) (8,500) ($58,400)
*8. Economic Adjustments* Exec. Rec., House and Senate: Included economic adjustments for salary and wage costs (positive $2,922,600), retirement costs (positive 1,757,000), insurance costs (positive $1,051,500), workers compensation (negative $44,000), and DIT Economics (positive $90,600).	Gross IDG Federal Private Restricted GF/GP	N/A N/A N/A N/A N/A N/A	$5,687,100 7,600 2,378,100 31,900 1,413,000 $1,856,500
*9. Homeland Security* Exec. Rec., House and Senate: Included pass-through grant funding received from the Department of State Police for activities related to the Homeland Security program.	Gross IDG	$100,000 100,000	$300,000 300,000
*10. Headquarters and Armories – GF Adjustment* Exec. Rec., House and Senate: Included adjustment for one-time cost to bring home troops for the 2003 holiday.	Gross Federal Restricted GF/GP	$9,041,200 1,891,300 350,000 $6,799,900	($100,000) 0 0 ($100,000)
*11. Military Retirement Payments* Exec. Rec., House and Senate: Included increase in the annual annuity paid to retired Michigan Army and Air national Guard personnel per the Michigan Military Act, PA 150 of 1967.	Gross GF/GP	$2,500,000 $2,500,000	$176,000 $176,000
*12. Employee-related savings* Exec. Rec., House and Senate: Included 5% employee-related savings to help fund FY 2004-05 economic costs.	Gross IDG Federal Private Restricted GF/GP	$103,097,500 300,000 40,627,900 1,270,700 24,570,100 $36,328,800	($2,198,500) (4,600) (858,100) (20,300) (537,700) ($777,800)
*13. Human Resources Optimization* Exec. Rec., House and Senate: Included savings through increased efficiency in performing human resources.	Gross Federal Restricted GF/GP	$9,041,200 1,891,300 350,000 $6,799,900	($19,600) 0 0 ($19,600)
*14. FTE Adjustments* Exec. Rec., House and Senate: Reduced full-time equated positions (FTEs) throughout budget to correctly align staffing and to optimize human resources.	FTEs	1,079.0	(56.0)
*15. Executive Budget Revision* Exec. Rec.: Reduced GF/GP to reflect the change in methodology for allocating year-end salary and fringe benefit costs between fiscal years and to reflect the savings from the recent actuarial experience study for the State Employees Retirement System.	Gross GF/GP	N/A N/A	($185,100) ($185,100)
*16. Items of Difference* Senate: Included $100 items of difference from House-passed bill for all line items containing GF/GP.	Gross GF/GP	N/A N/A	$100 $100

Major Budget Changes from

FY 2003-04 YTD Appropriations:

FY 2003-04 YTD

(as of 2/12/04)

Senate

Passed

1. Challenge Program

Exec. Rec., House and Senate: Increased $125,000 GF/GP to help fund two 50-pupil Challenge classes ─ a voluntary boot camp-style program for high school dropouts funded by the federal National Guard Bureau on a 60/40 federal/state basis.

House: Added $39,500 IDG above Exec. Rec. to reflect the actual IDG received in FY 2003-04.

Senate:Included additional $439,500 IDG above Exec. Rec. from FIA to fund more than two 50-pupil classes

Gross

IDG

Federal

Private

GF/GP

$3,296,900

200,000

1,651,200

845,700

$600,000

$564,500

439,500

$125,000

2. D.J. Jacobetti Veterans’ Home – Medicare and Medicaid

Exec. Rec., House and Senate: Increased federal revenue at the D.J. Jacobetti Veterans’ Home due to tightening criteria for providing free prescription drugs to a portion of the Veterans at the home. As a result, there has been an increase in billing to the Veterans’ insurance companies resulting in increased Medicare and Medicaid revenues. Also reflects increase in Medicare revenue due to a change in Medicare policy allowing the Home to bill for blood-sugar testing supplies.

Gross

Federal

Restricted

GF/GP

$12,945,600

4,073,700

4,391,500

$4,480,400

$87,000

87,000

3. Veterans Trust Fund Tuition Grant

House: Increased $1.0 million GF/GP to fund tuition

grant program completely funded by the Michigan Veterans Trust Fund.

Senate:Did not include $1.0 million GF/GP.

Gross

Restricted

GF/GP

$3,746,500

3,746,500

4. Headquarters and Armories

Exec. Rec., House and Senate: Included federal revenue available for security contracts, personnel costs, and maintenance costs.

Gross

Federal

Restricted

GF/GP

$9,041,200

1,891,300

350,000

$6,799,900

$300,000

300,000

5. Military Training Sites

Exec. Rec., House and Senate: Included federal revenue available for security contracts, personnel costs, and maintenance costs.

Gross

Federal

GF/GP

$14,860,200

12,140,400

$2,719,800

$2,000,000

2,000,000

6. Special Maintenance– Federal

Exec. Rec., House and Senate: Included federal revenue available for construction, maintenance and upkeep at the training sites and logistical facilities used as training areas for the Michigan National Guard.

Gross

Federal

$4,300,000

4,300,000

$1,000,000

$1,000,000

7. Information Technology – Base Reduction and Budgetary Savings

Exec. Rec., House and Senate: Included reduction of operating costs and employee-related savings in information technology.

Gross

Federal

Restricted

GF/GP

$1,170,300

560,400

160,500

$449,400

($78,900)

(12,000)

(8,500)

($58,400)

8. Economic Adjustments

Exec. Rec., House and Senate: Included economic adjustments for salary and wage costs (positive $2,922,600), retirement costs (positive 1,757,000), insurance costs (positive $1,051,500), workers compensation (negative $44,000), and DIT Economics (positive $90,600).

Gross

IDG

Federal

Private

Restricted

GF/GP

N/A

N/A

$5,687,100

7,600

2,378,100

31,900

1,413,000

$1,856,500

9. Homeland Security

Exec. Rec., House and Senate: Included pass-through grant funding received from the Department of State Police for activities related to the Homeland Security program.

Gross

IDG

$100,000

100,000

$300,000

300,000

10. Headquarters and Armories – GF Adjustment

Exec. Rec., House and Senate: Included adjustment for one-time cost to bring home troops for the 2003 holiday.

Gross

Federal

Restricted

GF/GP

$9,041,200

1,891,300

350,000

$6,799,900

($100,000)

($100,000)

11. Military Retirement Payments

Exec. Rec., House and Senate: Included increase in the annual annuity paid to retired Michigan Army and Air national Guard personnel per the Michigan Military Act, PA 150 of 1967.

Gross

GF/GP

$2,500,000

$2,500,000

$176,000

$176,000

12. Employee-related savings

Exec. Rec., House and Senate: Included 5% employee-related savings to help fund FY 2004-05 economic costs.

Gross

IDG

Federal

Private

Restricted

GF/GP

$103,097,500

300,000

40,627,900

1,270,700

24,570,100

$36,328,800

($2,198,500)

(4,600)

(858,100)

(20,300)

(537,700)

($777,800)

13. Human Resources Optimization

Exec. Rec., House and Senate: Included savings through increased efficiency in performing human resources.

Gross

Federal

Restricted

GF/GP

$9,041,200

1,891,300

350,000

$6,799,900

($19,600)

($19,600)

14. FTE Adjustments

Exec. Rec., House and Senate: Reduced full-time equated positions (FTEs) throughout budget to correctly align staffing and to optimize human resources.

FTEs

1,079.0

(56.0)

15. Executive Budget Revision

Exec. Rec.: Reduced GF/GP to reflect the change in methodology for allocating year-end salary and fringe benefit costs between fiscal years and to reflect the savings from the recent actuarial experience study for the State Employees Retirement System.

Gross

GF/GP

N/A

N/A

($185,100)

($185,100)

16. Items of Difference

Senate: Included $100 items of difference from House-passed

bill for all line items containing GF/GP.

Gross

GF/GP

N/A

N/A

$100

$100

Major Boilerplate Changes from FY 2003-04:
*Sec. 205. Hiring Freeze* Imposes hiring freeze on the state classified civil service; exempts internal transfers and provides for other exceptions. Exec. Rec.: deleted. House: retained. Senate: updated language on criteria for exceptions.
*Sec. 207. Privatization Plans* Requires the department to submit a complete project plan to Legislature 60 days before beginning any effort to privatize. Exec. Rec.: deleted. House: retained. Senate: concurred with House.
*Sec. 213. Armory Closure or Consolidation* Requires the department to consult with the house and senate appropriations subcommittees regarding the projected closing or consolidation of any national guard armories. Exec. Rec.: deleted. House: retained. Senate: concurred with House.
*Sec. 214. Military Cemeteries* States legislative intent that, should necessary legislation be enacted and funds become available, funds be appropriated for state military cemeteries in Crawford and Dickinson Counties. Exec. Rec.:deleted. House: concurred with Exec. Rec. Senate: retained.
*Sec. 224. Contingency Funds* Appropriates federal, restricted, local, and private contingency funds that can be expended upon legislative transfer to a specific line item. Exec. Rec.: added new section. House: concurred with Exec. Rec. Senate: deleted.
*Sec. 302(4). Challenge Program Participants* Requires the department to take steps to insure that at least 75% of the participants in the Challenge program are members of families with incomes at or below 200% of the federal poverty level. Exec. Rec.: added new section. House: deleted. Senate: concurred with House.
*Sec. 601. Veterans’ Homes* Requires appropriations for the Grand Rapids veterans’ home and the D.J. Jacobetti veterans’ home not to be used for any purpose other than for veterans and veterans’ families. Exec. Rec.: deleted. House: retained. Senate: concurred with House.
*Sec. 602. Veterans’ Homes Annual Written Report* Requires the Grand Rapids veterans’ home and the D.J. Jacobetti veterans’ home, together with the department and the department of management and budget, to produce and deliver an annual written report including an accounting of member populations and bed space available; a description and accounting of services and activities provided to members; financial information; current state nursing home licensure status; the steps required for Medicaid certification; and whether or not steps are being taken toward Medicaid certification, to the senate and house of representatives appropriations subcommittees on state police and military affairs no later than February 1, 2005. Exec. Rec.: deleted. House: retained. Senate: concurred with House.
*Sec. 704. County Veterans Counselors* Requires the Michigan veterans affairs directorate administration and the Michigan veterans’ trust fund administration to take steps to assist the county veterans counselors to obtain training necessary for the execution of their duties. Exec. Rec.: deleted. House: retained. Senate: concurred with House.
*Sec. 705. Veterans Trust Fund* States the legislative intent to only expend interest earned by the Michigan Veterans Trust Fund. Exec. Rec.:did not include this section. House: did not include this section. Senate: added new language.

Major Boilerplate Changes from FY 2003-04:

Sec. 205. Hiring Freeze

Imposes hiring freeze on the state classified civil service; exempts internal transfers and provides for other exceptions.

Exec. Rec.: deleted. House: retained. Senate: updated language on criteria for exceptions.

Sec. 207. Privatization Plans

Requires the department to submit a complete project plan to Legislature 60 days before beginning any effort to privatize.

Exec. Rec.: deleted. House: retained. Senate: concurred with House.

Sec. 213. Armory Closure or Consolidation

Requires the department to consult with the house and senate appropriations subcommittees regarding the projected closing or consolidation of any national guard armories.

Exec. Rec.: deleted. House: retained. Senate: concurred with House.

Sec. 214. Military Cemeteries

States legislative intent that, should necessary legislation be enacted and funds become available, funds be appropriated for state military cemeteries in Crawford and Dickinson Counties.

Exec. Rec.:deleted. House: concurred with Exec. Rec. Senate: retained.

Sec. 224. Contingency Funds

Appropriates federal, restricted, local, and private contingency funds that can be expended upon legislative transfer to a specific line item.

Exec. Rec.: added new section. House: concurred with Exec. Rec. Senate: deleted.

Sec. 302(4). Challenge Program Participants

Requires the department to take steps to insure that at least 75% of the participants in the Challenge program are members of families with incomes at or below 200% of the federal poverty level.

Exec. Rec.: added new section. House: deleted. Senate: concurred with House.

Sec. 601. Veterans’ Homes

Requires appropriations for the Grand Rapids veterans’ home and the D.J. Jacobetti veterans’ home not to be used for any purpose other than for veterans and veterans’ families.

Exec. Rec.: deleted. House: retained. Senate: concurred with House.

Sec. 602. Veterans’ Homes Annual Written Report

Requires the Grand Rapids veterans’ home and the D.J. Jacobetti veterans’ home, together with the department and the department of management and budget, to produce and deliver an annual written report including an accounting of member populations and bed space available; a description and accounting of services and activities provided to members; financial information; current state nursing home licensure status; the steps required for Medicaid certification; and whether or not steps are being taken toward Medicaid certification, to the senate and house of representatives appropriations subcommittees on state police and military affairs no later than February 1, 2005.

Exec. Rec.: deleted. House: retained. Senate: concurred with House.

Sec. 704. County Veterans Counselors

Requires the Michigan veterans affairs directorate administration and the Michigan veterans’ trust fund administration to take steps to assist the county veterans counselors to obtain training necessary for the execution of their duties.

Exec. Rec.: deleted. House: retained. Senate: concurred with House.

Sec. 705. Veterans Trust Fund

States the legislative intent to only expend interest earned by the Michigan Veterans Trust Fund.

Exec. Rec.:did not include this section. House: did not include this section. Senate: added new language.