Snyder budget should aid road fix
Gov. Rick Snyder, facing an enormous challenge to get a tax hike for road repairs approved by voters this spring, needed to present a budget that makes a convincing case that there's no fat in the general fund that could be used to offset the tax. And for the most part he did.
The governor's budget proposal, unveiled Wednesday, holds spending to roughly a 1.2 percent increase over the current year. In terms of governmental budgets, that's quite modest — the federal budget proposed by President Barack Obama, for example, called for a 7 percent spending hike.
That should score points with voters skeptical about Proposition 1, the measure to raise the sales tax on the ballot May 5. One of the primary objections raised by opponents of the ballot proposal is that Snyder should have been able to find the $1.2 billion for roads in the existing revenue stream.
Nothing about the budget plan suggests there's that much extra money available to shift to road spending, though the governor did leave himself vulnerable in a couple of areas.
Snyder kept most departmental spending stagnant, and made targeted cuts in some places to erase budget deficits caused largely by the unexpected redemption of corporate tax credits pledged by the previous administration. He also issued executive orders cutting spending to erase a mid-year shortfall in the current budget.But he did add some new spending, largely in K-12 education, workforce training and health care for poor children.
The new initiatives are what voters will have to weigh in terms of whether they are more essential than highway work.
Still, Snyder's priorities are solid. Michigan needs more skilled workers to accelerate economic growth and improve household incomes. Roughly $111 million will go to fund skills training programs. And another $129 million is requested to aid job attraction efforts.
Spending on schools will rise to $11.9 billion, or $1.2 billion more than in 2011, when Snyder took office. Increases include an additional $75 per pupil for the foundation grant; $100 million more to aid at-risk children, additional spending on distressed school districts and $32 million more for universities and community colleges. In all, education spending will go up by $400 million.
That total is based on current revenues, and doesn't account for the $300 million in additional education revenue that will come if the sales tax increase is passed. If that materializes, education spending could soar by $700 million next year.
One very small cut he made to the current year budget may hurt him in the campaign. Snyder slashed $3.2 million that had been allocated for training more motor carrier enforcement workers to crack down on overweight trucks.
High truck weights are a complaint often cited by those who feel current road funds are mismanaged. Snyder should consider restoring that funding. The amount saved is not worth the potential fallout.
And although Snyder proposed to cut film subsidies by $12 million in the current year, his 2016 budget restores them to $50 million. Those who argue that there's too much non-essential spending in the budget most often point to the film tax credits.
But Michael LaFaive of the Mackinac Center, a fierce watchdog of governmental spending, says overall Snyder is "balancing the budget to the best of his ability."
Although LaFaive remains skeptical about the effectiveness of the nearly $1 billion a year the state budgets for economic and workforce development, including the film credits, he praises Snyder for aggressively tackling long-term liabilities such as the the school employee retirement system. The budget sets $815 million aside for the K-12 pension system, which gives schools relief from the growing costs of maintaining retiree obligations.
According to the governor's office, reforms made to the school retirement system and the state employee retirement system have reduced the long-term debt by more than $20 billion.
That's the sort of fiscal performance Snyder must highlight on the campaign trail as he pushes for the sales tax hike. On the whole, this budget should help more than hurt him.