Snyder, GOP leaders OK budget targets ahead of vote

Michael Gerstein
The Detroit News

Lansing — Gov. Rick Snyder and the Republican legislative leaders agreed Monday to set aside money for teacher pension reform, a new infrastructure fund and the rainy day fund as part of a state budget agreement.

The Michigan Republican leaders would pump $255 million into next year’s budget to pay for transition costs under a teacher retirement system overhaul that the Michigan House and Senate approved.

The plan would steer new public school employees into a 401(k)-style contribution plan rather than a hybrid pension most join today. The GOP proposal is intended to make 401(k)-style plans more appealing to new hires and would automatically enroll public school employees in the retirement savings accounts unless they opt out within 75 days for the hybrid system that includes part of a traditional pension.

The House and Senate previously carved out $475 million for teacher retirement overhaul transition costs, But the new teacher pension plan requires less money in transition costs, so Snyder, House Speaker Tom Leonard of Dewitt and Senate Majority Leader Arlan Meekhof agreed to target $35 million for the governor’s proposed infrastructure fund and another $150 million for the state’s rainy day or emergency fund.

Before the deal, Snyder had initially recommended a $266.5 million deposit into the rainy day fund and $20 million for the Michigan Infrastructure Fund.

Both the House and Senate have approved that plan separately, but it still has to move through one chamber again before Snyder can sign it because of procedural rules. The House is expected to vote on the identical Senate version of that plan as soon as Tuesday.

GOP leaders are planning to vote on the entire state budget, too. This would be the seventh budget done ahead of an end of June deadline, Snyder spokesman Ari Adler said in an email.

“There were some major reforms in play during this year’s budget process that made it more complex but that’s why Gov. Snyder’s philosophy of relentless positive action is so important to this state,” said Adler.

“Finding compromise between the executive and legislative branches of government that provides the people of Michigan with a path toward a brighter future and is what every state budget should entail.”

“It was cheaper than expected,” said Gideon D’Assandro, Leonard’s spokesman. “It’s a good budget. Obviously it hits our high priories of record education refunding, record road funding, increases for public safety and it kept overall public spending low.”

Snyder will sign next year’s overall state budget into law in the coming weeks, Adler said.

Twitter: @MikeGerstein