LANSING (WWJ/AP) – Gov. Rick Snyder is poised to propose a state spending plan that would save money to prepare for looming budget pressures and include modest funding increases for education and public safety.
The Republican will unveil his $50 billion-plus budget proposal to lawmakers Wednesday.
At a time GOP legislators want an income tax cut, he will instead call for setting aside $260 million in Michigan’s savings account to grow it to $1 billion. State budget director Al Pscholka told The Associated Press Tuesday it’s “good conservative budgeting” to save “one-time” tax revenues and pay down debt.
GOP legislators have called for gradually eliminating Michigan’s 4.25 percent income tax. Pscholka said the governor on Wednesday will note tax and fee reductions already made under his watch. They include business tax overhauls, a cut for people who trade in their car or boat for a new one, a pending break for some homeowners and renters, and the elimination of extra “driver responsibility” fees imposed on people driving without insurance or proof of insurance. Those tax cuts will total $2.1 billion over three years, Pscholka said.
Republicans have expressed frustration that they have not enacted a broad-based cut for individuals, though, despite controlling state government for six years. Senate Appropriations Committee Chairman Dave Hildenbrand, a Lowell Republican, said he expects legislators to consider a tax cut in concert with budget work in coming months.
“What that exactly will shape up and look like, I’m not sure at this point,” he said.
Hildenbrand said that while the Legislature must be aware of how past tax reductions will affect future budgets, “we have a big budget and we spend a lot of money. As you reduce some of those revenues, it keeps the pressure on the state budget so that we’re making responsible decisions. … As we are able to move money out of here back to the taxpayers, I think that’s a good thing for state government.”
Snyder also could again ask for increased spending on water and other infrastructure across Michigan in the wake of Flint’s water crisis. A similar proposal was largely abandoned in last year’s budget negotiations.
The governor is also expected to propose directing $1.2 billion to the teacher retirement system and continuing a formula whereby lower-funded K-12 districts get double the increase in per-pupil state aid that higher-funded districts receive. The state’s 15 public universities would get 2.5 percent more overall for operations, with increases varying by school.
While university funding would be restored in aggregate to 2011 levels — when Snyder cut aid by 15 percent to address a budget deficit — four schools’ state payments would remain below what they were when he took office. To get their full funding, universities could not raise tuition and fees more than 3.8 percent.
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