Michigan legislators seek higher roads and school funding

LANSING — Gov. Rick Snyder and Republican leaders in the legislature agreed to targets Tuesday for how to spend more than half a billion dollars in unanticipated revenue as they finalize the 2013-’14 budget.

The GOP leaders set targets of adding $350 million in spending on roads, $140 million extra on K-12 education and $75 million extra going into Michigan’s Budget Stabilization Fund, also known as the Rainy Day Fund, said Ari Adler, a spokesman for House Speaker Jase Bolger. The leaders also agreed to $16 million extra in revenue sharing for local governments, he said.

Adler said the extra roads money would be one-time spending while lawmakers continue to work on a plan to raise more than $1 billion extra to spend on state roads and bridges, as called for by Snyder in his February budget.

Similarly, the extra money for K-12 won’t go into the per-pupil foundation allowance as an ongoing expenditure, but could be used to reward school districts for best practices or to pay down post-retirement liabilities, Adler said.

House Minority Leader Tim Greimel, D-Auburn Hills, said he welcomes the extra money for schools but all of the unanticipated revenues should go to the School Aid Fund or to tax cuts for middle and lower income residents.

The $140 million is on top of a 2% budget increase already targeted for K-12, Adler said.

The May 15 revenue estimating conference identified close to $700 million in additional revenues for 2012-13 and 2013-14 combined, though Budget Director John Nixon cautioned only about $160 million of it was ongoing revenue and the rest was one-time money that couldn’t be built into ongoing budgets.

Officials said there were fears late in 2012 that a federal deal to avoid the “fiscal cliff” would result in higher personal taxes. As a result, some Michigan residents cashed in shares and took dividends at a higher than normal rate, driving up state income tax revenues.

Greimel said “there is an immediate financial crisis in many schools in Michigan due to Republican budget decisions, and the current Republican proposal does virtually nothing to solve it.”

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