CHICAGO -- The Michigan Court of Appeals has given the state until Monday to file a brief in opposition to last week's lower court ruling that reinstated a $230 million general assistance program for the state, a spokesman for the Michigan Attorney General's office said yesterday.
The appeals court on Wednesday agreed to hear the state's appeal on the Ingham County Circuit Court ruling in the lawsuit against the state's director of social services by a group of general assistance recipients, according to Chris DeWitt, the spokesman.
He added that on Tuesday, the appeals court had stayed the implementation of the ruling, following the filing of an emergency appeal by the state late last Friday.
Mr. DeWitt said that while no ruling is expected for at least a week to give the plaintiffs time to also file a brief, "this is a serious matter for the state, and the hope is that the court will act promptly."
The general assistance program for about 80,000 able-bodied, single adults in the state was not included in the $7.5 billion fiscal 1992 general fund budget signed into law by Gov. John Engler a week ago.
The ruling by Circuit Court Judge James Giddings same out just hours before the governor brought the budget in line with his revenue estimate of $7.5 billion through $110 million of vetoes and nearly $90 million of one-time revenue measures. The elimination of general assistance as of Oct. 1, the beginning of fiscal 1992, had been a key component in helping to balance the $7.7 billion budgte the Legislature passed Sept. 27.
The return of general assistance threatens to return $230 million more in spending to the budget. But state officials is expressed confidence that they will prevail in court.
"I've got a feeling the state is going to win this," Nick Khouri, the state's chief deputy treasurer, said yesterday.
In its appeal, the state argued that the Legislature and the governor have the authority to take action to discontinue general assistance and that the action was done legally and properly, Mr. DeWitt said. The lower court ruling said the state had erred in the way it notified recipients that the program would be ended.
Meanwhile, Mr. Khouri said the state will probably issue some short-term notes "in the near future" for cash-flow purposes. A final decision on the matter will be made in the next two weeks, he said, adding that no specific amount has been set for the borrowing.
Mr. Khouri said he state was looking at short-term borrowing because revenues have not increased as much as anticipated and borrowing in the market was more cost-effective than borrowing internally from other state funds. Last March, Michigan sold $500 million of general obligation notes, the first time the slate had turned to cash-flow borrowing since September 1985.
