Snyder, GOP Leaders Reveal Budget Deal Providing Brownfield and Historic Preservation Incentives

Posted on May 20, 2011

A budget agreement reached by Gov. Rick Snyder and Senate and House Republican leaders will allocate $50 million toward purposes such as brownfield and historic preservation projects and $25 million for Michigan’s film industry.

And at a news conference today in his Capitol office, Snyder said those allocations would be one-time funds. “There is no commitment to look at those things in 2013,” he said.

Overall, the agreement on spending targets reached by Snyder; Senate Majority Leader Randy Richardville, R-Monroe; and House Speaker Jase Bolger, R-Marshall; provides for smaller cuts to K-12 schools than previously proposed, reduces the amount of state employee concessions that had been considered and gives some more money to revenue-sharing.

It also sets aside money in the state’s budget stabilization — or rainy-day — fund and creates a new School Aid Fund reserve account for future retirement liabilities.

Snyder said the budget for the 2012 fiscal year, which begins Oct. 1, is “fiscally responsible and financially sound” and is a “solid building block for Michigan’s future.”

It includes:

• Restoring $310 million in funding for K-12 schools. Of that, $150 million would be distributed on a per-pupil basis to districts that meet specified financial best-practice measures, such as tracking progress with a “dashboard,” tackling employee benefit costs and examining service consolidation.

There also would be one-time funding of $160 million to help defray local school district costs for their retirement systems. Snyder said the overall per-pupil reduction would be less than $100, compared with a previously proposed $300.

• Seeking state employee concessions of $145 million instead of $180 million.

• Allocating $30 million in additional funding for local units of government, half of which would be available to cities, villages and townships in the new incentive program that is replacing statutory revenue sharing. The remaining $15 million would go to county revenue-sharing.

• Adding $50 million to the Michigan Strategic Fund for economic development, including brownfield redevelopment and historic preservation incentives.

• Appropriating $25 million for a film industry incentive.

• Putting nearly $400 million into reserves, including putting $255 million in the budget stabilization fund and $133 million in the new School Aid Fund reserve account.

Richardville said a majority of funding for graduate medical education, within the Michigan Department of Community Health budget, also will be reinstated.

The agreement retains cuts that have been discussed to higher education.

Universities that keep their tuition increases below about 7 percent would see a 15 percent funding reduction, and language that would require reports on embryonic stem cell research would remain in the budget.

Community colleges would see a 4 percent cut.

In a statement, House Minority Leader Richard Hammel, D-Mt. Morris Township, said the budget agreement does not invest enough in schools, children and communities.

For example, he said: “Restoring a portion of the brownfield incentives is a start. However, it does not go far enough to revitalize Michigan’s urban areas and core communities.

“House Democrats will continue fighting to make sure Republicans do not continue to shift an unfair burden onto kids, middle-class families and seniors and that we don’t jeopardize the future success of our children and our state as we work to turn Michigan around.”

Today in a speech at the annual meeting hosted by Inforum, Michigan’s leading business forum for women, Snyder said: “The role of the government is not to create jobs. It’s to create the environment for those jobs to happen and let free enterprise really work.”

The governor said his two main goals were more and better jobs and keeping graduates in Michigan and said his reforms are all based on one concept: the kids.

“Far too long we’ve had a broken education system,” Snyder said. “We have good people in the system, but the system has been broken, it’s a failure. We have 16 percent college-ready students coming out of high school. That’s absolutely unacceptable. We have to get more of a focus on the kids and less simply on where the money is going to be spent.”

Snyder said many of the education cuts could be handled if districts opted to move to a system under which public employees pay for 20 percent of medical insurance premiums. He also said his administration is continuing to create plans to make up for the cuts.

Snyder said it will be a challenge to address everyone’s concerns, but he’s confident his state budget will create change for the better.

“Everyone likes change until it arrives,” Snyder said. “But when you have a broken system, it’s time for a change.”

By Amy Lane, Crain’s Detroit