Last year, it was a $1.5 billion deficit and a motto of "shared sacrifice." This year, sporting a structurally balanced checkbook and a modest surplus, Gov. Rick Snyder was able to talk about "invest and save" during his fiscal year 2012-13 budget testimony before the Legislature.
The $48.2 billion budget recommendation reverses a decade of cuts by suggesting humble increases in many categories, including education and public safety.
"Successfully reinventing Michigan demands that we make thoughtful, strategic and long-term investments in our state that deliver real results for real people," Snyder said in a press release. "This budget is the platform for creating an environment conducive to job growth, protecting our most vulnerable residents and ensuring that our children have bright futures with boundless opportunities."
Under Snyder's plan, education would receive a total of $14.7 billion, or 31 percent, of the total budget. It also would account for 62 percent of dollars originating in the state, located in the General Fund and the School Aid Fund.Within these education dollars is a 2.5 percent bump for K-12 education in the next fiscal year, or about $200 per student. Not including one-time funds, the suggested increase totals about 1 percent, or about $75 per pupil. The governor also called for $200 million based on performance metrics and innovation in schools, hoping for more accountability for results. He testified Michigan is 21st in the nation for per-pupil funding, but only ranks in the mid- to low-30s for student scores in math and reading.
Higher education also would receive a boost under Snyder's proposal. Universities could see a 3 percent increase - $36.2 million - if they meet performance metrics and comply with a 4 percent tuition cap. Community colleges could see a similar deal.
Snyder also suggested increased dollars for public safety, although he deferred revealing all of the details of his plan until a March special message on the topic. Michigan is home to four of the 10 most dangerous cities in the U.S. - Detroit, Flint, Pontiac and Saginaw - a situation Snyder hopes to improve with $15 million for increased law enforcement. He also included a 16 percent combined funding increase for the Michigan State Police and Department of Military and Veterans Affairs.
Continuing in his theme of fiscal responsibility, Snyder asked the Legislature to deposit $130 million into the Budget Stabilization Fund, also known as the Rainy Day Fund. The savings account held just $2.2 million when Snyder took office, a situation he decried from the beginning of his term. With the additional dollars, the fund would hold $388 million, the most it has seen since 2001.Encouraging accountability in other areas, Snyder also announced a new financial health dashboard, available at www.michigan.gov/openmichigan. It lists revenues, expenditures, debts, cash balances and other relevant statistics for state and local governments as well as school districts. It compares "current" data with "prior" data, defining those terms only as the "prior and current years for which data are available."
Among other points he highlighted in his presentation to a Joint Session of the state House and Senate Appropriations Committees:
• $5 million to implement a summer initiative for at-risk youth;
• $25 million for autism coverage, an issue the administration has long supported;
• Continue the film incentive at $25 million;
• Increase the rate paid to foster parents and adoptive parents by $3 per day;
• $25 million invested to expand the Healthy Kids Dental Program;
• 2 percent bump in constitutional revenue sharing ($14 million) plus a 9.2 percent increase in statutory programs;
• $119 million in general fund revenues for roads, enough to ensure a full match for federal highway and transit aid available.
He did not call for any changes in the state tax structure, a marked difference from last year, when he called for ending the income tax exemption on public pensions, eliminating the Michigan Business Tax in favor of a flat, 6 percent corporate income tax and eliminating the Earned Income Tax Credit. Also conspicuously absent from the plan were funds for the New International Trade Crossing, although Snyder did make passing reference when discussing infrastructure.
The houses have until Sept. 30 to consider Snyder's plan and pass their own appropriations language. Last year, the governor signed the budget in June, the earliest it was completed in three decades. Snyder called for the Legislature to again get something on his desk by May or June this year.