Lawmakers, Snyder Agree To Framework Of Budget

By David Eggert, Associated Press

LANSING (AP) - Key Republican lawmakers and Gov. Rick Snyder's administration agreed Tuesday on the framework of a state spending plan that would direct $165 million more toward Flint's lead-tainted water crisis and significantly scale back a plan to address underground infrastructure needs across Michigan.

"The big-picture stuff is pretty much settled out," Senate Appropriations Committee Chairman Dave Hildenbrand told The Associated Press in a phone interview.

The state budget office confirmed that the framework of an agreement was in place with Hildenbrand and House Appropriations Committee Chairman Al Pscholka. The Republican governor and GOP legislative leaders still have to sign the accord, but unsettled details were described as small.

House Speaker Kevin Cotter said earlier Tuesday that a final budget deal for the fiscal year that begins in October was "very, very close."

Negotiators had to adjust after anticipated tax revenues were recently lowered by $333 million and Medicaid cost estimates were raised $127 million. Hildenbrand said "target" spending levels for individual departments and major budget areas have been sent to members of the House and Senate budget committees and are roughly $390 million below what Snyder proposed in February.

The governor's proposal to spend $165 million more on the Flint emergency is intact. About $70 million has been allocated so far toward the disaster that began when the city's water source was switched while it was under state management and improperly treated water leached toxic lead from old pipes into households and businesses.

Snyder's proposed new $165 million fund to address water pipes and other aging infrastructure statewide would instead receive $5 million.

"We had to go and find reductions," said Hildenbrand, a Lowell Republican.

A commission Snyder created in the wake of Flint's disaster is working on a statewide infrastructure assessment and recommendations due by December.

"The concept was good, but we're not quite ready yet," Hildenbrand said. "Part of the thought process was, 'We'll see what this task force comes up with.' Next year, maybe it's something we can beef up and align a little more closely with what the recommendations are."

K-12 schools would still see per-student increases ranging from $60 to $120 — in line with Snyder's plan and proposals passed earlier by the House and Senate. But a House-Senate school aid conference committee will have to trim $40 million from other parts of the K-12 budget. State universities' operations funding would rise roughly $40 million, or 2.9 percent, instead of $60 million, or 4.4 percent, as sought by Snyder initially.

There also is consensus to prospectively end a tax credit inadvertently awarded to auto insurers and that is costing the state $60 million to $80 million a year.

"There's general agreement about the fact that it was not meant to exist in the form that it is and that it does have budget implications that we just can't afford at this time," said Amber McCann, spokeswoman for Senate Majority Leader Arlan Meekhof. "It's just a matter of working out the details as to where it will start, when we'll do it, when we need to do it so it's wrapped up with the budget as well."

Cotter said he has no "final position" on the issue, while Hildenbrand cautioned that "we still have to get the votes" in the face of opposition from the insurance industry, which has characterized the tax break's elimination as imposing a "car tax" on drivers.

"It was something that was not intended," he said. "We ought to make it right."

Lawmakers, who plan to break for the summer in mid-June, will enact a $55 billion budget once conference panels finalize specifics such as whether a prison should be closed to trim $27 million from the proposed Department of Corrections budget. The Legislature also faces the prospect of Detroit Public Schools running out of money after June 30 but is at odds over an overhaul.

While legislators agree on paying off the district's estimated $467 million debt and launching a new district, the Senate has favored providing $200 million in additional transition funds while the House backs $33 million. The Senate previously voted to create a commission of mayoral appointees to make decisions about opening and closing Detroit schools, including publicly funded charters in the city. It has faced stiff resistance from the school-choice lobby and House Republicans.

Snyder and the leaders said Tuesday they see no need to directly tie the budget and Detroit bills together.

"I think we can get both done and there isn't one holding up the other," Cotter said.

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