Snyder, lawmakers shroud budget pact in unusual secrecy

Gary Heinlein
The Detroit News

Lansing — Much of the 2016 state budget agreement between Gov. Rick Snyder and state lawmakers was shrouded in unusual secrecy Thursday, but state universities were disappointed with the share they’ll get.

An industry spokesman said the 1.5 percent boost in state funding proposed for public universities — one of just two budget agreement details officials have made public — is below expectations. He said it could mean some schools can’t live with a disappointingly low 2.8 percent limit on tuition increases Snyder and lawmakers also propose.

“We were expecting more on both ends,” said Mike Boulus, executive director of the Presidents Council State Universities of Michigan. “We expected the (state revenue) increase to be north of 2 percent.”

Snyder’s original proposal in February called for a 2 percent increase in the $1.5 billion higher education budget. It would have spread an added $28 million among universities next fall.

Now they’re looking at a smaller increase coupled with a stringent limit on tuition increases. Boulus speculated some university governing boards may boost tuition more than 2.8 percent.

“It wouldn’t be a surprise to see one or two universities look at the numbers and say a 1.5 percent increase equals ‘X’; I can do a lot better by foregoing those appropriations dollars and increasing tuition more, as Wayne State (University) already has done once,” he said.

A proposal to supplement the $3.7 billion state transportation budget with $400 million in General Fund revenue for added road repairs was the only other detail Snyder and legislative leaders revealed from their Wednesday agreement on spending targets for the state budget year beginning Oct. 1.

The lack of transparency led to speculation there’s more horse trading to be done on other key budget items, such as revenue sharing to local governments and aid to K-12 schools, scheduled for discussion in House-Senate conference committee meetings that start Tuesday.

“They have reached targets on all the items, including all the agency budgets, but the Legislature was needing a bit more time to notify their members of the agreement,” said State Budget Office spokesman Kurt Weiss. “I do think it’s fair to say that there are still some key decisions that need to be made in the committees, but everything is still pointing toward a June budget signing.”

One budget detail widely reported, but not officially confirmed, is a planned reduction in state film incentives to $25 million. That would be half the $50 million Snyder and the Senate have proposed spending next year on business tax breaks for productions filmed in Michigan.

Press representatives for Snyder and legislative leaders wouldn’t confirm or deny the amount Thursday. The same was true for Republican Sen. Jim Stamas of Midland, chairman of the subcommittee overseeing the general government budget containing the film money.

“We’re working on it,” Stamas said while deflecting questions.

Other news reports, also not confirmed, said the budget agreement sticks with Snyder’s plan to added $95 million to the state rainy day fund and doesn’t call for a House-proposed $5 million cut in revenue sharing for Detroit.

The oft-disputed movie incentives have been favored and defended by Snyder and Senate Majority Leader Arlan Meekhof, R-West Olive, as a way to bolster a blossoming industry with high-paying jobs.

But groups such as the Michigan Chamber of Commerce and free-market Mackinac Center for Public Policy claim they’re an unaffordable giveaway to lucrative media firms that don’t really need them.

Film incentives also were originally at $50 million in the current budget, but lawmakers trimmed that to $38 million after official projections in January indicated state revenues weren’t meeting expectations.

The House version of next year’s budget calls for continuation of the $38 million, but its Republican majority also passed a separate bill to altogether do away with them.

And House Speaker Kevin Cotter, R-Mount Pleasant, this month launched a plan that would divert all of the money being spent on film incentives into additional road repair funding.

His plan, based on budget juggling and projected revenue growth, theoretically would boost road repair funding $1 billion a year by 2019.