Senate dismantles Snyder budget to free up $540M

Johnathan Oosting
Detroit News Lansing Bureau

Lansing – Michigan’s Republican-led Senate on Wednesday continued dismantling GOP Gov. Rick Snyder’s budget proposal, approving bills that ditched education ideas and scaled back his state government spending plans to save cash for potential teacher retirement system reforms.

The upper chamber is working to finalize a $56.1 billion budget plan for fiscal year 2018 that would trim $270 million in general fund spending proposed by the governor and hold off on a $266.5 million deposit into the state’s “rainy day” savings fund.

Appropriations Chairman Dave Hildenbrand said the Senate will have about $540 million in total “uncommitted” revenue to work with as the Snyder administration and legislative leaders continue to negotiate possible tax cuts or fund a developing plan to close the state’s teacher pension system to new hires, which would require financing significant up-front costs.

The House on Tuesday approved a $55.8 billion budget plan that trimmed $272 million in general fund spending in Snyder’s proposed blueprint. The Senate began voting Wednesday and is expected to continue working Thursday on department budgets.

Majority Leader Arlan Meekhof, R-West Olive, called the Senate budget “smart.” He and Hildenbrand, R-Lowell, noted the upper chamber is still proposing overall funding increases in areas such as education and public safety.

“We do believe there’s priorities in the budget on which we need to spend and increase and make sure the state is on the right track, and we think this budget has met those criteria,” Meekhof said.

But Democrats on Tuesday blasted various reductions in the Republican budget, including a Department of Health and Human Services bill that would cut $42 million in general fund spending from the current year and $111 million from Snyder’s proposal.

The Senate plan does not include $5.6 million Snyder proposed to expand the Pathways to Potential program, which places social workers in schools to help struggling students boost attendance and connect families to community resources.

The Senate budget would also halve Snyder’s $45 million proposal to give mental health direct care workers a 50-cent-an-hour raise by delaying the pay increase until April. It would eliminate $2 million Snyder proposed to implement recommendations from the bipartisan Child Lead Poisoning Elimination Board.

“I think it’s a mistake,” Senate Minority Leader Jim Ananich, D-Flint, said of the GOP plan. “I think that half a billion dollars they’ve left out could be used for roads, to make sure our schools are high quality. The kind of things that people want to have when they decide they want to move to a state.”

Snyder has expressed concern with some budget reductions by both the House and Senate but has largely avoided direct criticism during the legislative process.

The House, Senate and governor’s office will negotiate a final budget, likely by mid-June, a process that could be heavily affected by a consensus revenue estimating conference on May 17.

The Senate on Wednesday approved a $14.3 billion spending plan for K-12 schools that would increase year-over-year spending by $231 million but rejected Snyder’s call to reduce funding for cyber charter schools and pump the savings into high schools with higher overhead costs.

The education budget would increase per-pupil funding by between $88 and $176 next year for traditional public and charter schools. The upper chamber shifted one-time retirement system support into the allowance, upping Snyder’s proposal for a $50 to $100 increase.

“I’m very pleased with the adjustments we’ve been able to make to the executive recommendations and the areas we’ve made important investments,” said Sen. Goeff Hansen, R-Hart, who chairs the K-12 appropriations subcommittee.

But Democrats said the state could do more to support the system by keeping all School Aid Fund dollars in K-12 schools. Snyder and the Legislature have in recent years used School Aid Fund money to fund universities and community colleges traditionally supported with general fund dollars.

The Senate plan would shift $631 million in School Aid Fund dollars in 2018. But spending that money on K-12 students could mean $425 in extra money per pupil, said Sen. Hoon-Yung Hopgood, D-Taylor.

“School Aid Fund money was not intended by voters to be spent on anything besides K-12 education,” he said, referencing Proposal A of 1994. “I feel we have not been adequately funding K-12 education for a long time, and a big part of that problem is these type of expenditures.”

Democrats also sided with the Republican governor’s call to reduce per-pupil funding for cyber charter schools to 80 percent of their brick-and-mortar counterparts, arguing they have lower overhead that operators can turn into profit.

Senate Republicans, like their counterparts in the House, voted to give the virtual schools full funding.

“I have concerns that we’re singling out that we have different students who are worth different amounts,” Hansen said. He questioned the 80 percent funding proposal, suggesting Snyder was “just picking a number out of the sky” without providing evidence to support it.

The Senate and House K-12 budgets both include $2.5 million in continued public funding to reimburse private schools for state mandates. Snyder had proposed dropping the funding, which is the subject of a lawsuit in state court questioning whether it violates a constitutional prohibition against using taxpayer funds to directly support non-public schools.

The Senate GOP easily advanced the K-12 spending bill in a 32-15 vote despite opposition from four Republicans and all Democrats.

The upper chamber also approved budget bills to fund the Michigan Department of Environmental Quality, Department of Natural Resources and the Department of Agricultural and Rural Development.

The Senate is scheduled to continue voting on spending bills Thursday, including a controversial General Government budget that would trim $75 million proposed by the governor and a Department of Corrections budget that seeks to save $40 million because of declining prison populations.

joosting@detroitnews.com