Michigan House OKs $57B budget

Michael Gerstein
The Detroit News

Lansing — Michigan’s House on Tuesday approved a $56.7 billion state budget that would pump more money into schools, finance transition costs for a teacher retirement system overhaul and pay for road maintenance.

House lawmakers passed the budget in two separate votes: one for overall government spending and one for funding K-12 education, community colleges and state universities.

The overall nearly $40 billion government budget passed in a 64-43 vote mostly along party lines. The education bill cleared in a 72-35 vote, with some Democrats praising it for increasing state aid to public schools by $60 per student in many districts and $120 per student in poorer districts.

The Senate will now grapple with the two bills on Thursday after key GOP senators agreed to the spending targets in a Monday meeting with Gov. Rick Snyder and again in a Tuesday joint panel hearing. Major amendments are not expected in the Senate because they would delay the process.

The budget includes $255 million to help pay for creating a teacher retirement plan that would try to steer new hires into 401(k)-style savings plan unless they opted out and enrolled in the existing hybrid pension-retirement savings plan. Most teachers join the hybrid plan.

Lawmakers gave final approval to the separate retirement system overhaul on Tuesday, over objections from Democrats and several Republicans. Snyder is expected to sign it, and the separate budget bills the House approved would cover the transition costs for that plan.

The $56.7 billion gross appropriation would cover all aspects of the state’s budget, including education, prisons, welfare programs and public expenses.

“I think we’ve got a great product in front of us,” said Sen. Dave Hildenbrand, R-Lowell. “We were able to prioritize spending … that reflects the priories of the people of Michigan and the priorities of this Legislature.”

House Appropriations chairwoman Laura Cox, R-Livonia, said “It reduces the size of government while at the same time safeguarding the vital services we provide to our citizens,” such as fixing roads and bridges and promoting public safety.

House Republicans touted the budget as increasing spending by less than the 2 percent annual rate of inflation. They argue that spending less tax money, they’re creating a smaller government.

Democrats hit Republicans for not allocating more money for fixing roads, which are gradually receiving an infusion of revenue over the next few years from gasoline tax and fee increases that started taking effect this year.

Democrats also criticized the budget for not setting aside money for victims of the state’s unemployment insurance fraud debacle that left tens of thousands of people wrongfully accused of fraud they did not commit. The budget would instead use millions of dollars from a fund padded with money from those accused of fraud to pay for job training programs and about 800 employees who work at the Unemployment Insurance Agency, which administers jobless benefits.

“This is a great concern of not only myself but just families across the state,” said Rep. Fred Durhal III, D-Detroit, who voted against the budget bills and called to “stop the raid of the UIA fund.

“Are we putting teachers first? Are we putting the voices of our constituents first? We know we could do better with this budget,” Durhal said.

The education budget would offer a 3 percent increase for K-12 schools, including a $60 increase per student and $120 per student for the poorest districts.

Universities would get a 2.9 percent hike from last year. Public university presidents have hailed the increase, but some expressed disappointment because it left some of the state’s biggest public universities with less money than they had before Snyder took office in 2011.

Republicans also maintained $2.5 million to reimburse private schools for health and safety costs despite a pending lawsuit over the same appropriation in this year’s budget — a move criticized by Democrats and teacher unions.

But private schools were “grateful that the Legislature restored funding for the state-imposed health and safety mandates,” said Brian Broderick, executive director of the Michigan Association of Non-Public Schools.

Broderick is part of a group asking to intervene in a state lawsuit that would determine whether the appropriation runs afoul of a Michigan constitutional requirement that public money not go directly or indirectly to private schools.

“It is recognition that all students need to be in safe and healthy learning environments no matter where they attend school,” he said.