LANSING – Michigan’s 2011-12 budget has been signed into law more than three months before the start of the 2011-12 fiscal year, and in so doing, Governor Rick Snyder called the budget a “major milestone for the reinvention of Michigan.”

The two bills, HB 4325 , PA 62, which enacts the state’s education budget, and HB 4526 , PA 63, were actually signed nine days before the start of the July 1 fiscal year, which was the state’s fiscal year before 1975.

Along with calling the budget bills a major milestone in the state’s conversion, Snyder also said the budget was a jobs and kids budget, because it would help generate new economic activity and help pay down future liabilities.

Up until this budget, the state was “racking up increasing liabilities,” Snyder said. With this budget, he said, the state would start making payments on its obligations in a responsible fashion.

But House Minority Leader Richard Hammel (D-Mount Morris Township) said the budget was risky for the state’s long-term economic health because it had been moved through too quickly.

Only brief mention was made during the signing ceremony of the state’s sweeping changes to its tax structure, and how that both added complexity to the budget process and provided new incentives for the state.

But in his statement, Hammel said the tax cut enacted was an example of how the budget would hurt the state because it forced lawmakers to rob from schools when there was money available to spend on education.

The education budget did not include any line-item vetoes. And the general government budget contained less than $5 million in actual spending vetoes, though there were a number of vetoes that could have added up to more spending had they remained in the bills.

But Snyder said there were several provisions in boilerplate that the Legislature added that were unenforceable and would not be enforced. Snyder specifically said that would include a provision requiring universities conducting embryonic stem cell research to report to the state on its research.

Snyder did not single it out during his press conference, but that would also include a provision declaring legislative intent against universities providing benefits to same-sex partners. Snyder’s legal counsel last month sent a letter to legislative leaders saying that a binding provision docking them state aid was unconstitutional.

The signing ceremony was clearly a celebratory moment for Snyder and Republican members of the Legislature (and only Republicans were on the stage with Snyder though he praised Democrats for providing “great input and feedback” on the budget).

Several dozen beaming lawmakers surrounded Snyder has he signed two-single sheet budget bills. In fact, the signings were a bit of a dodge. Snyder had signed the actual bills – HB 4526 is 235-pages long and HB 4325 is 65 pages long – about 20 minutes before the press conference started.

The actual time that he signed the bills was about one hour before he had to act on the two measures or they would have become law without his signature.

The schools budget totals about $13.8 billion, down by more than $1 billion from what the combined education budgets would have totaled for the current fiscal year.

Because the budget includes spending for all three components of education for the state, the budget spends $12.2 billion in K-12 public education, $1.36 billion in four-year universities and $283.9 million on community colleges.

The overall budget, with general funds, federal monies and restricted funds, comes in at close to $38 billion, with the largest share of that being $14 billion for the Department of Community Health.

Snyder said the budget was remarkable not just because it was completed so early, but because it was a “quality budget” that did not rely on one-time funding – any one-time funds used were specifically for one-time expenditures – made some payments into controlling future obligations and was structurally balanced.

Snyder said the budget could be a model for other states around the nation.

He also said the 2012-13 planning budget that he included as part of the 2011-12 budget was critical to new document, because it will help get the state out of a day-to-day spending attitude. The planning budget will help get the state into a habit of better forecasting and planning, Snyder said.

House Speaker Jase Bolger (R-Marshall) said the state was in a “much healthier place,” because of the budget. “It will grow our economy and help keep our kids here.”

And Bolger said while it was easy to focus on the money that could have been spent, what was more important was how much more “stable Michigan will be” with the budget.

Senate Majority Leader Randy Richardville (R-Monroe) did not speak about the budget itself, but praised the people who worked on the document, saying it was only possible with the determination of Snyder and lawmakers to change the state.

“None of these decisions were easy,” Richardville said, adding the budget “sets a foundation” for the future.

And in a statement, Snyder said he hoped the budget would set the state back on the path to winning a AAA bond rating from Wall Street rating agencies.

The budget also adds $255 million to the state’s Budget Stabilization Fund, the largest payment into the fund in a decade.

It will spend $133 million on debt restructuring and put $280 million toward the state’s post-retirement employee liabilities.

It also calls for $145 million in total employee concessions.

The budget does not call for any cuts to basic Medicaid services. However, it imposes for the first time a 48-month lifetime limit on most individuals receiving public assistance benefits.

The budget also cuts university funding by 15 percent, with a provision for further cuts if any university raises tuition for 2011-12 by more than 7 percent. So far, no university has increased tuition by more than 7 percent.

Snyder said the vetoes he enacted were relatively minor and few. The vetoes included $4.25 million in Human Services for a special adoption subsidy that would be borne entirely by the state; $80,000 for the surface mining industry, a study of mental health illness in juvenile facilities that required a contract with a specific vendor; and a pre-college engineering appropriation.

Probably more significant are the provisions that Snyder declared unenforceable, although he did not specifically enumerate those other than to say he would not call for universities to report on their embryonic stem cell research activities.

And while the budget has been signed, the Legislature is still working on the specific bills needed to implement the budget, most notably a 1 percent tax on all health care claims (SB 3488 ).

Also, the Supreme Court has scheduled a September 7 hearing on whether the tax changes enacted violate the Constitution.

If the court finds the tax changes, especially a tax on pensions, do violate the Constitution, it could completely undo the revenue aspects of the 2011-12 budget.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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