Summary: House Recommendation

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: House* *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			$342,500	114.2
Federal	40,627,900	45,418,100	45,418,100			4,790,200	11.8
Local	0	0	0			0	0.0
Private	1,270,700	1,282,300	1,282,300			11,600	0.9
Restricted	24,570,100	25,599,800	25,599,800			1,029,700	4.2
GF/GP	36,328,800	37,563,000	38,563,000			2,234,200	6.1
Gross	$103,097,500	$110,466,200	$111,505,700			*$8,408,200*	*8.2*
FTEs	1,079.0	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)	House Change
*1. Challenge Program* House: Per Executive Recommendation, 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 increased $39,500 IDG to reflect the actual IDG received in FY 2003-04. Executive change: $125,000	Gross IDG Federal Private GF/GP	$3,296,900 200,000 1,651,200 845,700 $600,000	$164,500 39,500 0 0 $125,000
*2. D.J. Jacobetti Veterans’ Home – Medicare and Medicaid* House: Per Executive Recommendation, 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. Executive change: $87,000	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 million GF/GP to fund tuition grant program completely funded by the Michigan Veterans Trust Fund. Executive change: $0	Gross Restricted GF/GP	$3,746,500 $3,746,500 $0	$1,000,000 0 $1,000,000
*4. Headquarters and Armories* House: Per Executive Recommendation, included federal revenue available for security contracts, personnel costs, and maintenance costs. Executive change:$300,000	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* House: Per Executive Recommendation, included federal revenue available for security contracts, personnel costs, and maintenance costs. Executive change: $2,000,000	Gross Federal GF/GP	$14,860,200 12,140,400 $2,719,800	$2,000,000 2,000,000 $0
*6. Special Maintenance– Federal* House: Per Executive Recommendation, 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. Executive change:$1,000,000	Gross Federal	$4,300,000 4,300,000	$1,000,000 $1,000,000
*7. Information Technology – Base Reduction and Budgetary Savings* House: Per Executive Recommendation, included reduction of operating costs and employee-related savings in information technology. Executive change: ($78,900)	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* House: Per Executive Recommendation, 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). Executive change: $5,687,100	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* House: Per Executive Recommendation, included pass-through grant funding received from the Department of State Police for activities related to the Homeland Security program. Executive change: $300,000	Gross IDG	$100,000 100,000	$300,000 300,000
*10. Headquarters and Armories – GF Adjustment* House: Per Executive Recommendation, included adjustment for one-time cost to bring home troops for the 2003 holiday. Executive change:($100,000)	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* House: Per Executive Recommendation, 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. Executive change: $176,000	Gross GF/GP	$2,500,000 $2,500,000	$176,000 $176,000
*12. Employee-related savings* House: Per Executive Recommendation, included 5% employee-related savings to help fund FY 2004-05 economic costs. Executive change: ($2,198,500)	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* House: Per Executive Recommendation, included savings through increased efficiency in performing human resources. Executive: ($19,600)	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* House: Per Executive Recommendation, reduced full-time equated positions (FTEs) throughout budget to correctly align staffing and to optimize human resources. Executive change: (56.0) FTEs	FTEs	1,079.0	(56.0)

Major Budget Changes from FY 2003-04 YTD Appropriations:

FY 2003-04 YTD

(as of 2/12/04)

House

Change

1. Challenge Program

House: Per Executive Recommendation, 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 increased $39,500 IDG to reflect the actual IDG received in FY 2003-04.

Executive change: $125,000

Gross

IDG

Federal

Private

GF/GP

$3,296,900

200,000

1,651,200

845,700

$600,000

$164,500

39,500

$125,000

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

House: Per Executive Recommendation, 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.

Executive change: $87,000

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 million GF/GP to fund tuition

grant program completely funded by the Michigan Veterans Trust Fund.

Executive change: $0

Gross

Restricted

GF/GP

$3,746,500

$3,746,500

$1,000,000

$1,000,000

4. Headquarters and Armories

House: Per Executive Recommendation, included federal revenue available for security contracts, personnel costs, and maintenance costs.

Executive change:$300,000

Gross

Federal

Restricted

GF/GP

$9,041,200

1,891,300

350,000

$6,799,900

$300,000

300,000

5. Military Training Sites

House: Per Executive Recommendation, included federal revenue available for security contracts, personnel costs, and maintenance costs.

Executive change: $2,000,000

Gross

Federal

GF/GP

$14,860,200

12,140,400

$2,719,800

$2,000,000

2,000,000

6. Special Maintenance– Federal

House: Per Executive Recommendation, 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.

Executive change:$1,000,000

Gross

Federal

$4,300,000

4,300,000

$1,000,000

$1,000,000

7. Information Technology – Base Reduction and Budgetary Savings

House: Per Executive Recommendation, included reduction of operating costs and employee-related savings in information technology.

Executive change: ($78,900)

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

House: Per Executive Recommendation, 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).

Executive change: $5,687,100

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

House: Per Executive Recommendation, included pass-through grant funding received from the Department of State Police for activities related to the Homeland Security program.

Executive change: $300,000

Gross

IDG

$100,000

100,000

$300,000

300,000

10. Headquarters and Armories – GF Adjustment

House: Per Executive Recommendation, included adjustment for one-time cost to bring home troops for the 2003 holiday.

Executive change:($100,000)

Gross

Federal

Restricted

GF/GP

$9,041,200

1,891,300

350,000

$6,799,900

($100,000)

($100,000)

11. Military Retirement Payments

House: Per Executive Recommendation, 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.

Executive change: $176,000

Gross

GF/GP

$2,500,000

$2,500,000

$176,000

$176,000

12. Employee-related savings

House: Per Executive Recommendation, included 5% employee-related savings to help fund FY 2004-05 economic costs.

Executive change: ($2,198,500)

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

House: Per Executive Recommendation, included savings through increased efficiency in performing human resources.

Executive: ($19,600)

Gross

Federal

Restricted

GF/GP

$9,041,200

1,891,300

350,000

$6,799,900

($19,600)

($19,600)

14. FTE Adjustments

House: Per Executive Recommendation, reduced full-time equated positions (FTEs) throughout budget to correctly align staffing and to optimize human resources.

Executive change: (56.0) FTEs

FTEs

1,079.0

(56.0)

Major Boilerplate Changes from FY 2003-04:
**Sec. 205. Hiring Freeze –RETAINED Imposes hiring freeze on the state classified civil service; exempts internal transfers and provides for other exceptions. Executive: deleted. House:** retained.
**Sec. 207. Privatization Plans –RETAINED Requires the department to submit a complete project plan to Legislature 60 days before beginning any effort to privatize. Executive: deleted. House**: retained.
**Sec. 213. Armory Closure or Consolidation –RETAINED Requires the department to consult with the house and senate appropriations subcommittees regarding the projected closing or consolidation of any national guard armories. Executive: deleted. House**: retained.
**Sec. 224. Contingency Funds –NEW Appropriates federal, restricted, local, and private contingency funds that can be expended upon legislative transfer to a specific line item. Executive: added new section. House**: concurred with Executive.
**Sec. 301(4). Challenge Program Participants –NEW/DELETED 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. Executive: added new section. House**: deleted.
**Sec. 303. Prepaid Phone Cards –DELETED Requires the state family program office to promote and inform private individuals, businesses, and organizations regarding the distribution of prepaid phone cards and other services to national guard members and military reservists deployed overseas on active duty. Executive: deleted. House**: concurred with Executive.
**Sec. 601. Veterans’ Homes –RETAINED 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. Executive: deleted. House**: retained.
**Sec. 602. Veterans’ Homes Annual Written Report –RETAINED 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. Executive: deleted. House**: retained.
**Sec. 703. Veterans Trust Fund Annual Written Report –DELETED Requires annual report on emergency and tuition grants provided from Veterans Trust Fund and other fund-related information. Subsection (2) requires the department to submit detailed information on the number of emergency grant applications, including an accounting of the reasons for denial. Executive: deleted subsection (2). House**: concurred with Executive.
**Sec. 704. County Veterans Counselors –RETAINED Requires theMichigan veterans affairs directorate administration and theMichigan veterans’ trust fund administration to take steps to assist the county veterans counselors to obtain training necessary for the execution of their duties. Executive: deleted. House**: retained.

Major Boilerplate Changes from FY 2003-04:

Sec. 205. Hiring Freeze –RETAINED

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

Executive: deleted. House: retained.

Sec. 207. Privatization Plans –RETAINED

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

Executive: deleted. House: retained.

Sec. 213. Armory Closure or Consolidation –RETAINED

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

Executive: deleted. House: retained.

Sec. 224. Contingency Funds –NEW

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

Executive: added new section. House: concurred with Executive.

Sec. 301(4). Challenge Program Participants –NEW/DELETED

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.

Executive: added new section. House: deleted.

Sec. 303. Prepaid Phone Cards –DELETED

Requires the state family program office to promote and inform private individuals, businesses, and organizations regarding the distribution of prepaid phone cards and other services to national guard members and military reservists deployed overseas on active duty.

Executive: deleted. House: concurred with Executive.

Sec. 601. Veterans’ Homes –RETAINED

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.

Executive: deleted. House: retained.

Sec. 602. Veterans’ Homes Annual Written Report –RETAINED

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.

Executive: deleted. House: retained.

Sec. 703. Veterans Trust Fund Annual Written Report –DELETED

Requires annual report on emergency and tuition grants provided from Veterans Trust Fund and other fund-related information. Subsection (2) requires the department to submit detailed information on the number of emergency grant applications, including an accounting of the reasons for denial.

Executive: deleted subsection (2). House: concurred with Executive.

Sec. 704. County Veterans Counselors –RETAINED

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

Executive: deleted. House: retained.