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Some Remarkable Facts About The FY ’18 Budget Headed To The Governor

June 27, 2017

Courtesy MIRS News

Looking for something remarkable out of the FY 2018 budget that passed the Senate Thursday and sent to the Governor is like searching for a wolverine in Michigan.

It’s possible both exist, but is it really worth the exhaustive search? 

MIRS tried anyway on the former project and this is the best we could come up with: 

State government is slated to spend $56.5 billion for the fiscal year starting Oct. 1, which is little more than what is projected to be spent this year, but not a heck of a lot more. The budget, like the state’s economy, has been on slow-growth autopilot for at least five years now. 

HB 4323, the “Big Bus,” and HB 4313, “The School Bus,” increased state spending 2.2 percent for the fiscal year starting Oct. 1, slightly under Metro Detroit’s 2.3 percent inflationary number for April. 

The Senate put it’s final blessing on the budget Thursday, a few days later in June than the established pattern under Gov. Rick Snyder’s tenure, but, again, nothing marked. 

Michigan will have an additional 139 state employees as part of the budget, less than a percent more, but most of the additions are from a larger state police force and new regulators to oversee the state’s new medical marijuana law. 

Michigan’s $10 billion General Fund actually got smaller — .8 percent lower than the current projected allocation in Fiscal Year (FY) 2017. 

Meanwhile, spending on schools is a little higher, but again, not by much. The $13.18 billion School Bus is .92 percent higher than what is being spent on K-12 education, community colleges and public universities this year. 

By and large, both budgets moved to the Governor on party-line votes, as both sides dove back into the predictable arguments that we’ll address lower in the article. 

The Big Bus passed, 26-11, with Sen. Joe Hune (R-Hamburg Twp.) voting no with the Democrats because the state ended up spending more money, as a whole, than any other budget in Michigan history. 

The School Bus passed, 24-14, with Sens. Patrick Colbeck (R-Canton), Rick Jones (R-Grand Ledge), Margaret O’Brien (R-Portage) and Tory Rocca (R-Sterling Heights) voting with Democrats against the budget. 

Colbeck said he was a no vote because the School Aid Fund was used to cover community college and higher education funding, which he believes is unconstitutional. Jones, too, has voted against former K-12 budgets for the same reason. 

Colbeck also doesn’t like that the School Bus included an additional per-pupil allocation for high school students, which he sees as putting a higher value on some students over others. Finally, he felt the 3.8 percent tuition restraint language for the state’s 15 universities was well over the roughly 2 percent inflationary rate and included no provisions on curtailing the rate of increase. 

O’Brien didn’t like the penalty put in the budget against school districts that are suing the state, since that impacts Kalamazoo in her district. She also didn’t like that the pool of schools that can receive “at-risk” dollars was expanded. 

Rocca didn’t like how the School Bus reflected changes made necessary by the creation of the new teacher retirement system, which he opposed. 

So what were Republicans proud about with this incremental, stay-the-course budget? 

1. The budget spent $4.347 billion on roads, which is more than any budget outside of the $4.513 billion on roads since 2009, when then-President Barack Obama’s stimulus package allowed Michigan to spend a little more. However, it’s fair to say no other budget has spent more state resources on its roads than this one. 

2. With the addition of $255 million more to address the new teacher retirement system and the $29.3 billion unfunded liability in the legacy teacher pension system, a combined $1.3 billion payment was made to pay down debt. 

3. K-12 schools are getting at least $7,631 per pupil, which is $120 more than last year and more than any other time in state history. The $12.54 billion School Aid Fund is also more robust than any other in state history. 

4. The Michigan State Police is getting 150 new troopers, which gets Michigan around 1,150 troopers, the highest numbers in about 15 years. 

5. Cities, villages and townships were given another $6.2 million in statutory revenue sharing (2.5 percent increase) while constitutional revenue sharing went up 1.2 percent. It’s not a cut, which is what local governments have gotten used to. 

6. Michigan is spending slightly less on its prisons due to lowering prisoner numbers. It’s allowing the Department of Corrections to shut down units at the Carson City, Gus Harrison, G. Robert Cotton, Marquette and Michigan Reformatory correctional facilities. 

Also, prisoner numbers are going to be part of the Consensus Revenue Estimating Conference, as part of a new provision, giving lawmakers more up-to-date information on how many inmates are in the system. 

7. All but five of the state’s 15 public universities are back to their pre-cut levels from 2011. Michigan State University, University of Michigan, Wayne State University, Western Michigan University and Eastern Michigan University still have some work to do. 

8. Mental health care workers are getting 50 cents more an hour, the state’s psychiatric hospital is getting 72 more employees and a new pilot program will try to get more money into treating patients by integrating physical and mental health services. 

“This budget has been crafted to eliminate wasteful overhead to help ensure that more of the services people need are funded,” said Sen. Jim Marleau (R-Lake Orion). “It seeks to provide more money to patients.” 

9. Fifteen more employees are being hired at the D.J. Jacobetti Home for Veterans in the Upper Peninsula and an unspecified number of additions are planned for the Grand Rapids Home for Veterans. Also, $2 million was set aside to train nursing services while boosting direct care staffing standards. 

10. Another $25 million was put in an emergency fund for Flint, money that likely will be used to replace lead lines in a city that underwent a water crisis two years ago. Also, $35 million was put into a separate Michigan Infrastructure Fund, which will go to support other underground infrastructure projects around the state. 

For Democrats, the final product was much better than what the House and Senate had jointly agreed to before the Governor had final sign off. However, no Senate Democrats voted for the budgets and few House Democrats voted for the spending document. 

The following are among the 10 concerns they had with it. 

1. Like this year, next year’s budget uses money from the Unemployment Insurance Penalties and Interest Fund to pay for a pair of skilled trades programs — Going Pro and Community Ventures. Last year, the total was $73.1 million. This year it’s $48.6 million. 

Democrats argue the money in this fund should go to reimburse those who the Unemployment Insurance Agency (UIA) wrongly accused of fraud through it’s “flawed” automatic fraud detection software. 

“This money does not belong to the state, it belongs to the honest residents who were incorrectly assessed exorbitant fines and penalties,” said Gilda Jacobs, Michigan League for Public Policy president and CEO. 

2. $150 million may be going into the Rainy Day Fund, but many Democrats argue that the rain is falling heavily on the state’s poorly maintained roads and more should be going to fix them. The $1.2 billion road package of 2015 doesn’t take full effect for years, but that doesn’t mean a little more can’t be put toward them. 

With the new deposit, the Rainy Day Fund is expected to be around $880 million. 

3. The School Aid Budget assesses a 5 percent penalty on any school district that enters into a collective bargaining agreement that includes the automatic deduction of union dues from an employees’ annual compensation. 

4. Any school district or intermediate school district that is suing the state would be penalized for whatever it spent in School Aid Fund money to sue the state, a reaction to lawsuits filed earlier this year about shutting down chronically failing schools and those districts fighting the use of taxpayer money to reimburse private schools for certain expenses. 

5. Roughly $636 million in K-12 School Aid Fund money was steered toward community colleges and public universities, which Democrats aren’t convinced isn’t a constitutional violation. Either way, they believe the General Fund should be picking up the costs of higher education, not money that, at least in spirit, was designed to be raised for K-12 schools. 

6. Universities received a 2 percent increase from last year, but that’s still less than the 2.5 percent the Governor recommended and does little to relieve the exploding tuition costs experienced by university students. 

7. The $55 million to transition the teacher retirement system to one that offers a less lucrative pension system also takes away the option for teachers to buy service credits, which Democrats have a problem with. 

8. The four pilot projects on what opponents call “privatizing” mental health services is something Democrats fear will do little but open the door to insurance companies to make money by skimping treatment off the state’s mentally ill. 

9. The Governor had included another $2.7 million in federal welfare money to increase the annual clothing allowance for poor children from $140 to $200, but they money was used to offset the General Fund instead. 

10. While only $150,000, Democrats wanted to see the program for in-home care for Alzheimer’s patients at least continued. Instead the pilot is slated to be complete by Sept. 30.

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