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Gov To Lawmakers: Adopt My Budget For Long-Term Fiscal Stability

February 13, 2018

Gov. Rick Snyder pledged that his $56.8 billion budget proposal, the final of his tenure, would leave the state’s budget structurally balanced for whomever succeeds him in 2019 . . . as long as it’s passed as proposed.

The Fiscal Year (FY) 2019 spending plan presented to a joint session of the House and Senate appropriations committees called for a tiny .6 percent increase to the $10 billion General Fund. It cuts taxes while sinking more in roads, schools and Flint. 

It also asks lawmakers to hike fees on landfill dumping and water usage to pay for toxic cleanups and underground water infrastructure, which he acknowledged would be a heavy lift for the conservative Republican-led legislature, but a fiscally wiser approach to cleaning up the environment than bonding. 

The budget comes amid future pressures like more General Fund money for roads, more funds to cover Healthy Michigan and homestead exemption increases that will make life difficult for a future governor, according to economist Mitch BEAN.

Snyder made it clear Wednesday that he feels like everything is on the right path. 

“We’re on the path to get a great legacy,” he told reporters. “Over the years, we have built something that is a role model for the rest of the country.” 

Snyder didn’t wade into the outstanding debate over whether to speed up of the driver responsibility fee repeal as the House wants or the $5,000 personal exemption on income taxes the Senate wants. However, he did stress that under his budget, Michigan taxpayers would see $1.85 billion in relief between 2018 to Fiscal Year (FY) 2020. 

This is on top of the $3 billion in tax cuts that state Treasurer Nick Khouri said the state has passed along to taxpayers over the past five years. Still, additional tax cuts were on the minds of legislative leaders during Wednesday’s budget presentation. 

“My priority is that we get the tax relief and driver responsibility fee (repeal) before we dig deep into the spending,” said Senate Appropriations Committee Chair Dave Hildenbrand (R-Lowell). “Every opportunity we can give back to the hard-working taxpayers of Michigan, we should do that. We’ve been doing it the last few years and I’m interested in doing it a little more so we’re going to be pursuing that.” 

House Appropriations Committee Chair Laura Cox (R-Livonia) was pleased Snyder gave “the soft nod” to an income tax exemption that was higher than the $4,500 level he initially pitched with his plan to save the exemption in the shadow of President Donald Trump’s tax cut plan. 

“Not to be disrespectful, but lame duck governors tend to want to spend a lot of money and our job as the Legislature is to make sure he doesn’t spend a lot of money,” Cox said. 

Senate Minority Leader Jim Ananich (D-Flint) called the increases in roads and schools “seven years late and many dollars short.” 

“The governor is throwing pennies at our roads and schools and crossing his fingers that it makes up for his legacy of shortchanging Michiganders.” 

Also, more money could have been set aside to take care of those residents falsely accused of fraud, said Rep. Fred Durhal III (D-Detroit). 

“We still haven’t made those individuals whole. We still haven’t made those families whole,” he said. 

Durhal said he believes there are more things that can be done to help the residents of Flint “repair their lives” after the Flint water crisis of 2015 and 2016. 

Snyder gave most of his message over the muffled roar of protestors outside the House Appropriations Committee door, who chanted, “Hey, Hey, Ho, Ho, Rick Snyder has got to go!” among other things. The protestors were made up of SEIU state employees, janitors and health care workers pushing for a $15-an-hour minimum wage for hospital, childcare and fast food workers. 

“Contrary to what Governor Snyder is telling us about the economy and budget in Michigan, Michigan’s working families are still struggling,” said Pam Owens Moore, a Detroit janitor. In the 30 years I’ve been working, I have seen Detroit go from a union town with good family sustaining wages to one where workers are doing three or four jobs just to get by. 

“We need a Governor who will fix the economy for all Michiganders by raising wages and supporting unions.” 

The highlights of Snyder’s spending priorities included: 

– An extra $175 million on top of the already required $150 million in General Fund money for road improvements.

– $112 million left over from last fiscal year to put some up-front payments on some capital outlay projects, including $70 million toward the ongoing Capitol infrastructure upgrades and $42 million toward new veterans’ homes in Grand Rapids and Detroit. 

The $112 million used from the $280 million that lapsed from Fiscal Year (FY) 2017 would help save $48 million in interest costs through making Snyder’s proposed “pre-payment.” 

– Per pupil funding increases of $120 to $240 for a total increase of $312 million for a minimum funding of $8,734 per student. 

– Funding cyber schools at 75 percent of the per pupil foundation allowance given to traditional brick-and-mortar schools.

– Up to a $50 investment per high school student enrolled in a career and technical training program.

– $46 million more for the indigent defense commission.

– $25.9 million ($18 million General Fund) to meet the requirements of the Concerned Pastors for Social Action settlement on service line replacement in Flint. There’s $4.6 million for lead investigations, lead abatement and health care programs for Flint children. 

– $20 million toward statewide broadband access.

– $8 million PFAS containment response.

– $7.5 million for rural hospital payments.

– 2 percent increase for university funding as long as tuition increases are kept at twice the rate of inflation, which is currently 1.9 percent. 

– A combined $1.26 million for Michigan State University AgBioResearch and MSU Extension operations.

– A combined $6.8 million to hire 50 new Michigan State Police troopers and 80 troopers to replace those lost through attrition. 

– $600,000 for the Sexual Assault Prevention and Education Initiative.

– $2.5 million for a Michigan Israel Business Accelerator to further spur investment between the two nations.

– $2 million for the “Rising Tide program” that helps smaller rural communities with talent development and economic development. 

Besides that, the Governor also announced investments in road funding and K-12 spending that had previously been reported by MIRS. 

The Governor had previously said he’d like to raise $79 million in increased landfill dumping fees to clean up contaminated sites, as well as a $5-per-customer water bill fee worth a combined $110 million to put toward water infrastructure improvement projects. 

Snyder also wants to use 25 percent of the lapsed funds from Fiscal Year (FY) 2018 to go to the Rainy Day Fund, which is projected to put the $889 million fund at $922, close to the coveted $1 billion number. 

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