ENERGY, LABOR,AND ECONOMIC GROWTH

Summary: FY 2009-10 Executive Budget Recommendation

Analyst: Mark Wolf

		FY 2009-10	*Difference: Enacted* *From FY 2008-09 YTD*
	FY 2008-09 YTD	Executive	*Amount*	%
IDG/IDT	$30,774,200	$29,117,100	($1,657,100)	(5.4)
Federal	874,942,400	918,286,200	43,343,800	5.0
Local	15,889,200	15,921,000	31,800	0.2
Private	5,314,300	5,314,300	0	0.0
Restricted	402,614,000	399,903,500	(2,710,500)	(0.7)
GF/GP	72,704,200	74,118,200	1,414,000	1.9
Gross	$1,402,238,300	$1,442,660,300	*$40,422,000*	*2.9*
FTEs	4,383.5	4,723.0	339.5	7.7

Note: FY 2008-09 figures reflect supplementals and Executive Order (EO) actions through January 31, 2009.

Overview

The Department of Energy, Labor, and Economic Growth (DLEG) has primary responsibility for the regulatory functions that relate specifically to commercial, business, and workers’ issues. It also includes various employment training-related programs for displaced workers, adults, and youth, as well as unemployment and workers compensation administration. Executive Order 2008-20 transferred certain energy-related functions from the Department of Environmental Quality in order to consolidate energy-related programs within the department.

Major Budget Issues

Major Budget Changes From FY 2008-09 YTD Appropriations	FY 2008-09 YTD	Enacted Change From YTD
1. Energy Program Consolidation (EO 2008-20) Adds 1.0FTE position and $1.9 million (Retired Engineers Technical Assistance Program Fund) for the consolidation of energy programs, mostly transferred from DEQ, within DELEG.	FTEs Gross Restricted GF/GP	N/A N/A N/A N/A	1.0 $1,957,200 1,957,200 $0
*2. Unemployment Insurance Agency* Adds 300.0FTE positions and $18.0 million (Federal) to respond to the increased number of UI benefit claims. Also recognizes $4.6 million (Federal) for postage costs, which were previously paid directly byDOL but are now provided to states (including UIA) to pay postage costs.	FTEs Gross Federal Restricted	1,002.7 $103,928,000 90,870,300 13,057,700	300.0 $22,587,800 22,587,800 $0
*3. Office of Financial and Insurance Regulation (OFIR)* Adds 1.0FTE position and $59,900 (Securities Fees) to implement increased responsibilities of 2008 PA 551 (updated Uniform Securities Act).	FTEs Gross Federal Restricted	348.0 $52,670,200 50,400 52,169,800	1.0 $59,900 0 59,900
*4. Liquor Revenue Fund Shift* Replaces $19.7 million in Liquor Purchase Revolving Funds used in several LCC-related administrative lines with an anticipated increase in Liquor License Revenue generated from proposed doubling liquor license fees, providing a2am-4am license, and a Sunday morning license.	Gross Federal Restricted GF/GP	N/A N/A N/A N/A	$0 0 0 $0
*5. Centers for Independent Living* .Removes $500,000 (Corporations Fees) added in FY 2008 to support the 15 Centers for Independent Living within the state.	Gross Federal Private Restricted GF/GP	$3,579,700 420,000 100,000 500,000 $2,109,500	($500,000) 0 0 (500,000) $0
*6. State Office of Administrative Hearings and Rules* Adds 11.0FTE positions and $1.3 million (IDG-DHS) to support increased hearing caseloads from the Department of Human Services; transfers 3.0FTE positions and $263,600 (L&R Fees) to the Bureau of Commercial Services, and aligns funding andFTE positions with support and activities from Corrections, Education, and Human Services.	FTEs Gross IDG Federal Restricted	170.5 $23,051,200 11,254,200 6,978,800 4,818,200	5.5 $818,100 1,081,700 0 (263,600)
*7. Jobs, Education, and Training (JET) Program* Reduces $3.0 million in administrative costs, based on anticipated program efficiencies.	FTEs Gross IDG	57.0 $18,410,200 18,410,200	0.0 ($3,000,000) (3,000,000)
*8. MSHDA Payments on Behalf of Tenants* Increases funding for Section 8 Rental Assistance based on anticipated revenue from the U.S. Department of Housing and Urban Development.	Gross Federal	$145,000,000 145,000,000	$11,000,000 11,000,000
*9. Remonumentation Grants* Decreases authorization for grants to counties based on estimated revenue.	Gross Restricted	$11,000,000 11,000,000	($5,700,000) (5,700,000)
*10.* *Michigan* *Tax Tribunal* Increases appropriation by $550,000 to work through backlog of cases.	FTEs Gross Restricted	11.0 $2,028,300 2,028,300	0.0 $550,000 550,000
*11. Low Income Energy Efficiency Fund* Reduces authorization by $3.2 million to align with annual revenue and provide sufficient authorization to re-appropriate prior-year awards not fully expended. From FY 2009 enacted, this represents an increase of $10.0 million. Annual revenue is $84.0 million.	Gross Restricted	$93,200,000 93,200,000	($3,200,000) (3,200,000)
*12.* *HAL* *Transfer: Historic Preservation and Archaeology Programs* With the elimination ofHAL, the State Historic Preservation Office and archaeology programs are transferred to MSHDA.	FTEs Gross Federal GF/GP	N/A N/A N/A N/A	20.0 $2,137,500 950,000 $1,187,500
*13. Information Technology* Increases funding ($618,900) to provide DELEG's share of the costs for the Michigan Business Services improvement initiative (MBSii) - a one-stop web portal designed to improve the business-state interface as it relates to starting and operating a business in the state; adds $655,600 for Microsoft license upgrade; includes $101,000 in efficiencies.	Gross Federal Restricted	$42,853,200 27,479,400 15,373,800	$1,173,500 301,200 872,300
*14. Commission for the Blind* Increases authorization based on federal revenue available.	Gross Federal Local Private Restricted GF/GP	$19,684,900 14,246,100 521,000 110,300 545,200 $4,262,300	$4,575,000 4,575,000 0 0 0 $0
*15. Annualize EO 2008-21 Reductions* Annualizes GF/GP reductions from EO 2008-21 for Fire Marshal ($5,000), Fire Safety ($10,000), Fire Fighters Training Council ($10,000), Workers Compensation Agency ($200,000), Workers Compensation Board of Magistrates and Appellate Commission ($10,500), and Workforce Programs Administration ($50,000)	Gross GF/GP	N/A N/A	($285,500) ($285,500)
*16. FY 2008-09 Economic Increases*	Gross IDG Federal Local Restricted GF/GP	N/A N/A N/A N/A N/A N/A	$9,344,000 261,200 4,277,500 31,800 4,261,500 512,000

Major Budget Changes From FY 2008-09 YTD Appropriations

FY 2008-09 YTD

Enacted Change

From YTD

1. Energy Program Consolidation (EO 2008-20)

Adds 1.0FTE position and $1.9 million (Retired Engineers Technical Assistance Program Fund) for the consolidation of energy programs, mostly transferred from DEQ, within DELEG.

FTEs

Gross

Restricted

GF/GP

N/A

1.0

$1,957,200

1,957,200

2. Unemployment Insurance Agency

Adds 300.0FTE positions and $18.0 million (Federal) to respond to the increased number of UI benefit claims. Also recognizes $4.6 million (Federal) for postage costs, which were previously paid directly byDOL but are now provided to states (including UIA) to pay postage costs.

FTEs

Gross

Federal

Restricted

1,002.7

$103,928,000

90,870,300

13,057,700

300.0

$22,587,800

22,587,800

3. Office of Financial and Insurance Regulation (OFIR)

Adds 1.0FTE position and $59,900 (Securities Fees) to implement increased responsibilities of 2008 PA 551 (updated Uniform Securities Act).

FTEs

Gross

Federal

Restricted

348.0

$52,670,200

50,400

52,169,800

1.0

$59,900

59,900

4. Liquor Revenue Fund Shift

Replaces $19.7 million in Liquor Purchase Revolving Funds used in several LCC-related administrative lines with an anticipated increase in Liquor License Revenue generated from proposed doubling liquor license fees, providing a2am-4am license, and a Sunday morning license.

Gross

Federal

Restricted

GF/GP

N/A

5. Centers for Independent Living

.Removes $500,000 (Corporations Fees) added in FY 2008 to support the 15 Centers for Independent Living within the state.

Gross

Federal

Private

Restricted

GF/GP

$3,579,700

420,000

100,000

500,000

$2,109,500

($500,000)

(500,000)

6. State Office of Administrative Hearings and Rules

Adds 11.0FTE positions and $1.3 million (IDG-DHS) to support increased hearing caseloads from the Department of Human Services; transfers 3.0FTE positions and $263,600 (L&R Fees) to the Bureau of Commercial Services, and aligns funding andFTE positions with support and activities from Corrections, Education, and Human Services.

FTEs

Gross

IDG

Federal

Restricted

170.5

$23,051,200

11,254,200

6,978,800

4,818,200

5.5

$818,100

1,081,700

(263,600)

7. Jobs, Education, and Training (JET) Program

Reduces $3.0 million in administrative costs, based on anticipated program efficiencies.

FTEs

Gross

IDG

57.0

$18,410,200

18,410,200

0.0

($3,000,000)

(3,000,000)

8. MSHDA Payments on Behalf of Tenants

Increases funding for Section 8 Rental Assistance based on anticipated revenue from the U.S. Department of Housing and Urban Development.

Gross

Federal

$145,000,000

145,000,000

$11,000,000

11,000,000

9. Remonumentation Grants

Decreases authorization for grants to counties based on estimated revenue.

Gross

Restricted

$11,000,000

11,000,000

($5,700,000)

(5,700,000)

10. Michigan Tax Tribunal

Increases appropriation by $550,000 to work through backlog of cases.

FTEs

Gross

Restricted

11.0

$2,028,300

2,028,300

0.0

$550,000

550,000

11. Low Income Energy Efficiency Fund

Reduces authorization by $3.2 million to align with annual revenue and provide sufficient authorization to re-appropriate prior-year awards not fully expended. From FY 2009 enacted, this represents an increase of $10.0 million. Annual revenue is $84.0 million.

Gross

Restricted

$93,200,000

93,200,000

($3,200,000)

(3,200,000)

12. HAL Transfer: Historic Preservation and Archaeology Programs

With the elimination ofHAL, the State Historic Preservation Office and archaeology programs are transferred to MSHDA.

FTEs

Gross

Federal

GF/GP

N/A

20.0

$2,137,500

950,000

$1,187,500

13. Information Technology

Increases funding ($618,900) to provide DELEG's share of the costs for the Michigan Business Services improvement initiative (MBSii) - a one-stop web portal designed to improve the business-state interface as it relates to starting and operating a business in the state; adds $655,600 for Microsoft license upgrade; includes $101,000 in efficiencies.

Gross

Federal

Restricted

$42,853,200

27,479,400

15,373,800

$1,173,500

301,200

872,300

14. Commission for the Blind

Increases authorization based on federal revenue available.

Gross

Federal

Local

Private

Restricted

GF/GP

$19,684,900

14,246,100

521,000

110,300

545,200

$4,262,300

$4,575,000

4,575,000

15. Annualize EO 2008-21 Reductions

Annualizes GF/GP reductions from EO 2008-21 for Fire Marshal ($5,000), Fire Safety ($10,000), Fire Fighters Training Council ($10,000), Workers Compensation Agency ($200,000), Workers Compensation Board of Magistrates and Appellate Commission ($10,500), and Workforce Programs Administration ($50,000)

Gross

GF/GP

N/A

($285,500)

($285,500)

16. FY 2008-09 Economic Increases

Gross

IDG

Federal

Local

Restricted

GF/GP

N/A

N/A

$9,344,000

261,200

4,277,500

31,800

4,261,500

512,000

Major Boilerplate Changes From FY 2008-09
The boilerplate sections are re-organized into 8 categories to improve readability: (1) General Sections; (2) Occupational and Industry Regulation, and Employment Services; (3) Office of Financial and Insurance Regulation; (4) Housing and Community Development; (5) Michigan Rehabilitation Services; (6) Michigan Commission for the Blind; (7) Career Education; (8) Workforce Development.
**Sec. 205. Hiring Freeze -DELETED** Prohibits DELEG from hiring new full-time classified civil service employees and from filling vacant state classified civil service positions unless exceptions to the freeze is granted by the state budget director.
*Sec. 213. (Former Sec. 223) Contingency Appropriations* The Executive increases authorization for contingency appropriations. Total contingency appropriations are $31.0 million Federal, $26.2 million Restricted; $8.2 million Local; and $600,000 Private.
**Sec. 214. IT Projects -DELETED** Designates IT services and projects appropriation as a work project.
**Sec. 215. Policy Changes -DELETED** Requires DELEG to report on policy changes made to implement public acts; prohibits adopt of rules that have a disproportionate impact on small businesses.
**Sec. 216. Appropriated Funds De-Aggregation -DELETED** States intent that all part 1 funds sources not be aggregated into general categories, but be specifically identified as much as possible.
**Sec. 219. Executive Branch Employee Communications with Legislature -DELETED** Prohibits disciplinary action against Executive employees that communicate with a legislator or legislative staff.
**Sec. 222. Government Efficiency Commission Recommendations- DELETED** Requires DELEG to review recommendations of the Commission on Governmental Efficiency
**Sec. 224. Restrictions on Out-of-State Travel to Training Seminars -DELETED** Prohibits more than one DELEG employee traveling out-of-state for training conferences unless funded by federal or private funds.
**Sec. 311. Transfer to Construction Code Fund -DELETED** Transfers $3.0 million in surplus corporation fees (copy and certification fees) to the State Construction Code Fund.
**Sec. 335. Low-Income Energy Efficiency Assistance Program -DELETED** Establishes deadlines for application and award announcements; requires the Public Service Commission to report to the Legislature and state budget office on the distribution of funds.
**Sec. 336. OFIR Expenditures -DELETED** Requires report of actual expenditures for last completed fiscal year for each division within OFIR
**Sec. 337. OFIR Credit Scoring -DELETED** Prohibits expending funds to implement a ban on credit scoring in insurance rate setting until the Legislature has authorized such a prohibition.
**Sec. 340. Health Maintenance Organization (HMO) Financial Filings -DELETED** Requires that OFIR provide copies of HMO quarterly and annual financial filings to the fiscal agencies.
**Sec. 352. Workers Compensation Board of Magistrates and Appellate Commission -DELETED** Requires expenditures in part 1 be used to that cases are decided in a timely manner; funds from unclassified salaries appropriation line to support five appellate commissioners and 26 magistrates.
**Sec. 355. Ergonomics Rules Prohibited -DELETED** Prohibits promulgate of ergonomics rules that are more stringent than voluntary federal guidelines.
**Sec. 358. Real Estate Education Fund -DELETED** Allows real estate pre- and post-licensure education to be delivered through on-line courses by a community college, university, or private school; allows Real Estate Education Fund to be used for grants to educational providers to establish on-line courses available to students.
**Sec. 365. Training Grant to Aggregate industry -DELETED** Requires allocation not less than $40,000 for training grants to non-profit organizations representing the aggregate industry inMichigan.
**Sec. 378. SOAHR Decisions in Public Assistance Cases -DELETED** States legislative intent that the State Office of Administrative Hearings and Rules (SOAHR) develop a system to post administrative hearing decisions regarding public assistance on the Internet.
**Sec. 379. Teacher Tenure Cases -DELETED** Requires SOAHR to report on the status of pending teacher tenure cases.
**Sec. 403. Local Match Requirements for Facilities Establishment Grants -DELETED** Requires that local match for vocational rehabilitation facilities establishment grants not exceed 21.3% for the fiscal year ending September 30.
**Sec. 415. Private Occupational School License Fees -DELETED** Requires that these appropriated fees be applied to administrative cost of Proprietary Schools Oversight Unit.
**Sec. 418. Employment Outcomes for Future Faculty Program Participants -DELETED** Requires participating universities to provide DELEG with information on employment outcomes of program participants; requires report on this data.
**Sec. 421. Marketing of King-Chavez-Parks Program -DELETED** Direct DELET to mark the program to parents and students, and report to the Legislature electronically on these marketing efforts; requires program be administered as it was when in the Department of Education.
**Sec. 429. Focus: HOPE Reporting -DELETED** Requires Focus: HOPE to report on its use of funds appropriated in the budget act.
**Sec. 437. Welfare-to-Work Funds Allocation -DELETED** Allocates $200,000 to public-private welfare-to-work partnership involving an imbedded DHS caseworker at the job site of an employer to work with employees receiving public assistance.
**Sec. 439. Focus: HOPE Career Prep Pilot Program -DELETED** Establishes legislative intent that DELEG work with Career Alliance (Genesee-Shiawassee Michigan Works! Agency) and other interested MWAs in implementing the career prep pilot program developed by Focus: HOPE.
**Sec. 440. Gang Diversion -DELETED** States legislative intent to set aside some Workforce Investment Act (statewide activities) funds to support gang diversion activities and support services of local law enforcement and MWAs inWyoming,Detroit, andBentonHarbor.
**Sec. 442. Temporary Assistance for Needy Families (TANF) Contingency Funds -DELETED** Appropriates up to $30.0 million in TANF funds, upon receipt of TANF Contingency Funds in FY 2007-08, and subsequent carryforward of TANF block grant funds in FY 2008-09.
**Sec. 503 - State Historic Preservation -NEW** Incorporated from theHAL appropriations act, this section appropriates funds received by the State Historic Preservation Office (MSHDA) from document reproduction and services, and application fees.
**Sec. 907 - Nursing Education Report -New** Incorporated from the Higher Education appropriations act, this section requires DELEG to report on the status of nursing education programs in the state.
*Sec. 909. (Former Sec. 432) No Worker Left Behind (NWLB) Report* The Executive removes fund source detail from the required NWLB report, and adds to the reporting requirements, the number of participants securing employment within one year, the number securing employment in an occupation related to the training, and average wage of those securing employment within one year.
*Sec. 910. (Former Sec. 432) No Worker Left Behind* GF/GP Funding Deletes a requirement that $2.5 million-$5.0 million of the $15.0 million GF/GP appropriated for NWLB be expended for capacity building at community colleges.

Major Boilerplate Changes From FY 2008-09

The boilerplate sections are re-organized into 8 categories to improve readability: (1) General Sections; (2) Occupational and Industry Regulation, and Employment Services; (3) Office of Financial and Insurance Regulation; (4) Housing and Community Development; (5) Michigan Rehabilitation Services; (6) Michigan Commission for the Blind; (7) Career Education; (8) Workforce Development.

Sec. 205. Hiring Freeze -DELETED

Prohibits DELEG from hiring new full-time classified civil service employees and from filling vacant state classified civil service positions unless exceptions to the freeze is granted by the state budget director.

Sec. 213. (Former Sec. 223) Contingency Appropriations

The Executive increases authorization for contingency appropriations. Total contingency appropriations are $31.0 million Federal, $26.2 million Restricted; $8.2 million Local; and $600,000 Private.

Sec. 214. IT Projects -DELETED

Designates IT services and projects appropriation as a work project.

Sec. 215. Policy Changes -DELETED

Requires DELEG to report on policy changes made to implement public acts; prohibits adopt of rules that have a disproportionate impact on small businesses.

Sec. 216. Appropriated Funds De-Aggregation -DELETED

States intent that all part 1 funds sources not be aggregated into general categories, but be specifically identified as much as possible.

Sec. 219. Executive Branch Employee Communications with Legislature -DELETED

Prohibits disciplinary action against Executive employees that communicate with a legislator or legislative staff.

Sec. 222. Government Efficiency Commission Recommendations- DELETED

Requires DELEG to review recommendations of the Commission on Governmental Efficiency

Sec. 224. Restrictions on Out-of-State Travel to Training Seminars -DELETED

Prohibits more than one DELEG employee traveling out-of-state for training conferences unless funded by federal or private funds.

Sec. 311. Transfer to Construction Code Fund -DELETED

Transfers $3.0 million in surplus corporation fees (copy and certification fees) to the State Construction Code Fund.

Sec. 335. Low-Income Energy Efficiency Assistance Program -DELETED

Establishes deadlines for application and award announcements; requires the Public Service Commission to report to the Legislature and state budget office on the distribution of funds.

Sec. 336. OFIR Expenditures -DELETED

Requires report of actual expenditures for last completed fiscal year for each division within OFIR

Sec. 337. OFIR Credit Scoring -DELETED

Prohibits expending funds to implement a ban on credit scoring in insurance rate setting until the Legislature has authorized such a prohibition.

Sec. 340. Health Maintenance Organization (HMO) Financial Filings -DELETED

Requires that OFIR provide copies of HMO quarterly and annual financial filings to the fiscal agencies.

Sec. 352. Workers Compensation Board of Magistrates and Appellate Commission -DELETED

Requires expenditures in part 1 be used to that cases are decided in a timely manner; funds from unclassified salaries appropriation line to support five appellate commissioners and 26 magistrates.

Sec. 355. Ergonomics Rules Prohibited -DELETED

Prohibits promulgate of ergonomics rules that are more stringent than voluntary federal guidelines.

Sec. 358. Real Estate Education Fund -DELETED

Allows real estate pre- and post-licensure education to be delivered through on-line courses by a community college, university, or private school; allows Real Estate Education Fund to be used for grants to educational providers to establish on-line courses available to students.

Sec. 365. Training Grant to Aggregate industry -DELETED

Requires allocation not less than $40,000 for training grants to non-profit organizations representing the aggregate industry inMichigan.

Sec. 378. SOAHR Decisions in Public Assistance Cases -DELETED

States legislative intent that the State Office of Administrative Hearings and Rules (SOAHR) develop a system to post administrative hearing decisions regarding public assistance on the Internet.

Sec. 379. Teacher Tenure Cases -DELETED

Requires SOAHR to report on the status of pending teacher tenure cases.

Sec. 403. Local Match Requirements for Facilities Establishment Grants -DELETED

Requires that local match for vocational rehabilitation facilities establishment grants not exceed 21.3% for the fiscal year ending September 30.

Sec. 415. Private Occupational School License Fees -DELETED

Requires that these appropriated fees be applied to administrative cost of Proprietary Schools Oversight Unit.

Sec. 418. Employment Outcomes for Future Faculty Program Participants -DELETED

Requires participating universities to provide DELEG with information on employment outcomes of program participants; requires report on this data.

Sec. 421. Marketing of King-Chavez-Parks Program -DELETED

Direct DELET to mark the program to parents and students, and report to the Legislature electronically on these marketing efforts; requires program be administered as it was when in the Department of Education.

Sec. 429. Focus: HOPE Reporting -DELETED

Requires Focus: HOPE to report on its use of funds appropriated in the budget act.

Sec. 437. Welfare-to-Work Funds Allocation -DELETED

Allocates $200,000 to public-private welfare-to-work partnership involving an imbedded DHS caseworker at the job site of an employer to work with employees receiving public assistance.

Sec. 439. Focus: HOPE Career Prep Pilot Program -DELETED

Establishes legislative intent that DELEG work with Career Alliance (Genesee-Shiawassee Michigan Works! Agency) and other interested MWAs in implementing the career prep pilot program developed by Focus: HOPE.

Sec. 440. Gang Diversion -DELETED

States legislative intent to set aside some Workforce Investment Act (statewide activities) funds to support gang diversion activities and support services of local law enforcement and MWAs inWyoming,Detroit, andBentonHarbor.

Sec. 442. Temporary Assistance for Needy Families (TANF) Contingency Funds -DELETED

Appropriates up to $30.0 million in TANF funds, upon receipt of TANF Contingency Funds in FY 2007-08, and subsequent carryforward of TANF block grant funds in FY 2008-09.

Sec. 503 - State Historic Preservation -NEW

Incorporated from theHAL appropriations act, this section appropriates funds received by the State Historic Preservation Office (MSHDA) from document reproduction and services, and application fees.

Sec. 907 - Nursing Education Report -New

Incorporated from the Higher Education appropriations act, this section requires DELEG to report on the status of nursing education programs in the state.

Sec. 909. (Former Sec. 432) No Worker Left Behind (NWLB) Report

The Executive removes fund source detail from the required NWLB report, and adds to the reporting requirements, the number of participants securing employment within one year, the number securing employment in an occupation related to the training, and average wage of those securing employment within one year.

Sec. 910. (Former Sec. 432) No Worker Left Behind GF/GP Funding

Deletes a requirement that $2.5 million-$5.0 million of the $15.0 million GF/GP appropriated for NWLB be expended for capacity building at community colleges.