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Lawmakers Clash On Roads Money, Insurance Tax Hole

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By DAVID EGGERT
Associated Press

LANSING, Mich. (AP) – Lawmakers are heading toward a mid-year budget showdown over paying for more road projects and filling a hole in Michigan’s collection of a tax that funds medical care for low-income residents.

A Republican-led House budget committee on Wednesday approved spending legislation to set aside $215 million for higher-than-usual road maintenance bills this winter and longer-lasting road and bridge projects. That’s $115 million more than the GOP-controlled Senate approved last week.

The House version, however, doesn’t include $115 million to plug an ongoing shortfall in the Medicaid budget, which has suffered because a 1 percent tax on health claims paid by insurers and HMOs isn’t generating as much as anticipated when it took effect in 2012. The Senate wants to divert money from elsewhere in this year’s budget to secure a crucial federal match.

Once the bill wins approval from the House as early as Thursday, differences are expected to be hammered out in a House-Senate conference committee within two weeks.

“My concern is by patching the hole in the (health claims revenue) is we’ve just put off the conversation for another year. I think all the interested parties have to come to the table and say we need a long-term solution to it,” said House Appropriations Committee Chairman Joe Haveman, R-Holland.

Gov. Rick Snyder and Republicans have pushed to address the problem by charging drivers $25 a year to help fund Medicaid, under an overhaul of the state’s auto insurance system that would reduce overall premiums and scale back unlimited medical benefits for those catastrophically injured in crashes. House Speaker Jase Bolger, R-Marshall, unveiled a new car insurance plan last week, but opposition still remains fierce and any possible deal is unlikely to be reached before the November election.

“They’ve been trying to do that for two years and it hasn’t been successful yet,” said Senate Majority Leader Randy Richardville, R-Monroe. He opposes tying the budget measure to contentious auto insurance changes.

The bill includes $100 million in emergency aid for state and local road agencies grappling with increased salt usage, overtime pay and potholes stemming from this winter’s near-record snowfall and freeze-thaw effects. It also allocates $115 million previously set aside for repaving and other transportation projects.
Unlike the Senate, the House committee didn’t include $6.7 million to restore state funding for the Hutzel Women’s Hospital in Detroit – which delivers more at-risk babies than any other hospital in Michigan – or $2 million to help the fledging Regional Transit Authority in Detroit get up and running.

Majority Republicans rejected various Democratic amendments, including $2 million to mitigate municipal costs for tree damage and debris caused by a December ice storm. Democrats in turn voted against the legislation.

Separately, the House committee overwhelmingly passed a mid-year school funding bill with $2 million to help K-12 districts with many poor students move to year-round instruction. The money would help install air conditioning in older schools or potentially modify labor contracts.

Snyder endorsed the concept in his January State of the State speech.

The legislation’s sponsor, Rep. Andy Schor, D-Lansing, said teachers have to spend one or two months at the start of the academic year re-teaching what students forget over the summer. About 30 of Michigan’s 900 school districts and charter schools have a year-round calendar.

© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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