Where things stand on completing state’s budget
LANSING – Doubling fuel taxes. Shoring up bankrupt Detroit’s pensions funds. Raising the minimum wage.
Michigan lawmakers are tackling hefty issues in the last weeks before they break for the summer. So it’s easy to forget they’re also trying to finalize Gov. Rick Snyder’s $52 billion spending plan – the conclusion of which is related to the bankruptcy and transportation legislation.
A look at some key issues that the Republican governor and GOP-controlled Legislature have to resolve before he can sign the 2014-15 state budget in June:
ROADS AND BRIDGES
A push to spend much more on road and bridge construction, possibly by at least doubling fuel taxes, wasn’t included in Snyder’s proposal. But he supports raising at least $1.3 billion a year more – his past call to hike gasoline and license plate taxes hit resistance – and whatever legislators do will affect the budget.
The House plan would set aside $500 million a year more by 2018. Most would come from ensuring that sales tax collected at the pump that the state constitution doesn’t require for schools and local governments goes to the transportation budget, which also would get a portion of use taxes collected on out-of-state purchases and by hotels.
The bolder but more politically challenging Senate plan – which hasn’t cleared the chamber – could raise $1.5 billion more within four years, mainly by gradually more than doubling the state’s gasoline and diesel taxes.
A plan to replace the Michigan Educational Assessment Program next school year with tests aligned with new national education standards has led to considerable pushback. Legislators don’t want to fund the exams developed by the Smarter Balanced consortium, a group of states – including Michigan – adopting Common Core standards that spell out what math and English skills students should have at each grade.
Republicans say the standards can still be implemented if new MEAP tests are given the next two years while Michigan requests bids for alternative tests. Some Democrats also have reservations with the exams. Concerns range from schools’ readiness to give tests on computers, the length of the exams and their complexity.
The state Education Department says it’s too late to change direction. Angry legislators are threatening to move responsibility for standardized testing from the education agency to the Treasury Department.
Since Michigan revamped how it pays for K-12 schools 20 years ago, a goal is to reduce the funding gap among districts. The difference is now $973 per student, down from a disparity of $2,300 in 1994. But the fight for equity continues and is evident in competing plans pitched by Snyder and legislators.
Snyder proposes increasing the minimum per-pupil grant by $111 to $7,187 and the maximum by $83 to $8,132, only partly adhering to a “2x” formula in which lower-funded districts get twice the increase that higher-funded districts do.
The House would boost the minimum by $112 and the maximum by $56 while kicking in another $16 per pupil to every district. The Senate funding increase would range from $300 for lower-funded schools to $150 for higher-funded schools – made possible by eliminating some categorical funding based on student performance and if schools meet “best practices.”
Lawmakers are comfortable with many of Snyder’s key proposals – paying for more lower-income 4-year-olds to attend preschool, hiring extra state police and conservation officers, boosting funding for public universities, and giving bigger revenue-sharing payments to local governments (though there’s an effort to stop attaching strings for municipalities to get the money).
But recently revised revenue estimates mean there’s $616 million less to spend from the $21 billion school aid and general funds than anticipated when Snyder proposed his budget in February.
A tax cut already has been ruled out. Once negotiators set spending targets for individual budgets – possibly this week – there could be smaller funding hikes than initially planned.
In bipartisan fashion, the House voted last week to transfer $194.8 from Michigan’s $580 million savings accounts toward a deal to prevent steep cuts in retiree pensions and the sale of valuable city-owned art in Detroit’s bankruptcy case. The Senate will consider the bills next.