LANSING – Governor Rick Snyder on Wednesday put before the Legislature a budget that attempts to build on the fiscal discipline of past years and new growth, with increased and targeted spending on key areas such as education and a tax cut proposal that focuses on persons his critics have charged he hurt.
In outlining the some $52 billion total spending plan, Snyder also outlined a proposal that could provide extra money to cities that are struggling. He called for more State Police troopers, more conservation officers, more money for pre-school education, the biggest increase in funding for higher education in years, more funding to fight invasive species, more money to allow poor children access to dental care, and a major funding start to help implement the recently unveiled proposals for mental health and substance abuse.
In presenting his fourth proposed budget, Snyder effectively said the state is past the economic struggles of the “Lost Decade,” and can look forward to ongoing economic growth.
“The comeback continues in Michigan,” he told the joint meeting of the House and Senate Appropriations Committees. “We can talk about Michigan’s bright future.”
But his budget proposal was blasted as an election-year gimmick by Democrats, who said it still leaves schools and local governments far short of what they need to recover from cuts imposed early in Snyder’s administration.
Mark Schauer, the expected Democratic candidate to oppose Snyder in November, issued a statement saying that despite the increases and the tax proposal which runs counter to what many Republicans had urged, the budget continues Snyder’s “same failed policies.”
Schauer said, “Governor Snyder’s election year budget is filled with more fuzzy math and accounting gimmicks, and continues the same failed policies that have created the fourth-worst unemployment rate in the nation. I’m particularly disappointed that the governor has failed to fully restore the per pupil cuts he made in his first budget to kids in the classroom.”
That last point remained one of the most critical, with Democrats and other officials continuing to argue that the administration had cut spending for school operations during the past three years, and Snyder arguing just as forcibly back that the administration had increased spending for K-12 education.
At one point during his presentation and the questions after, Snyder said that “career politicians” would get confused over complicated budgets, something a CPA, such as himself, would not.
Budget Director John Nixon, at another point, said calculating the administration had given more money to schools was so simple “my fifth-grader” had figured it out.
That led Rep. Brandon Dillon (D-Grand Rapids) to send a tweet to a reporter snapping that most school administrators, business managers and accountants must not have finished fifth grade.
While the budget is clearly a political as well as administrative document, and will clearly be part of the 2014 political season, Snyder said the process of working on the budget should be seen more as solving a family’s financial situation than as a political process.
“That’s how I see it,” Snyder said, adding that he viewed drafting the budget as “sitting at the kitchen table with 10 million” Michigan citizens and determining what should be saved and spent and invested.
Politically, the budget could help Snyder counter the Democratic attack that he cut funding to schools, universities and local government services. But Snyder refused to bite when asked if his budget would enable him to do so.
“I don’t play politics well, everybody knows that,” he told reporters.
The economy is growing and the state’s fiscal discipline is paying off that enables these types of investments and tax relief, Snyder said.
“I view this as just good, smart stuff to do,” he said.
THE BUDGET BASICS: The entire budget is about 2 percent larger than the current total appropriated 2013-14 budget.
The entire budget proposal totals slightly more than $52 billion, although with adjustments for interdepartmental grants and transfers, the total spending will be $51.2 billion.
The largest single source of funding for the budget will be federal money, which is expected to total $21.1 billion, or 41.2 percent of the entire budget. Of that portion, the largest share, more than $12 billion, will go to the Department of Community Health, largely for Medicaid.
State restricted funds will be the second largest total of the budget, coming in at a proposed $19.9 billion. Of that, the largest portion will be in School Aid Funds (about $11.8 billion). Another $2.15 billion will go to transportation and $2.14 will go to DCH.
The General Fund portion of the budget will total $9.7 billion. Of that, nearly $1.6 billion will go for education funding (and most of that for universities). That will leave just less than $8 billion ($7.97 billion to be specific) for all other departments. DCH again will get the largest share at $2.978 billion. Transportation would see $254 million from the General Fund.
Local units of government, including schools and community colleges, will receive a total of $16.477 billion in spending. Aside from education, local units will see $4.285 billion in spending.
In outlining the budget, the administration said 75 percent will be spent on health and human services and education. Of that, 44 percent will go for health and human services, as the DCH and Department of Human Services budgets combined will total more than $23 billion.
The administration said 10 percent of the budget will go towards “jobs,” 6 percent toward public safety, another 6 percent to government services, 2 percent to environment and less than 1 percent to reserves.
Those reserves are the Budget Stabilization Fund, and Snyder said he is proposing a total $244 million to go to the BSF, which would bring the total in the rainy day fund to $822 million. That total would be the largest in nearly a decade.
The fund increase would come in two portions, the first a $120 million payment from the surplus the state has realized from the 2012-13 fiscal year. The second will be $122 million from Healthy Michigan-related savings once the state expands eligibility for Medicaid, Snyder said.
The fund is important to the state to provide needed resources not only when there is economic trouble, Snyder said, but when funds may be needed for specific needs, such as transportation.
But right now, Snyder said, the fund needs to get bigger. Presuming the state continues to see job growth and revenue growth, the state should continue to build the BSF until it is between $1.2 billion and $1.6 billion.
At $1.6 billion, the fund would be at its highest level since it was created some 40 years ago.
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