Today, before a joint House and Senate Appropriations Committee, Governor Rick Snyder and State Budget Director John Roberts presented the executive budget recommendations for the 2016-2017 Fiscal Year.  The overall budget recommendation totals $54.9 billion, an increase of 0.8% over last year.

Beginning his presentation, the Governor addressed four challenge areas; the Flint water crisis, statewide infrastructure, Detroit Public Schools, and specialty medications.  On the issue of the water crisis in Flint, Governor Snyder stated thus-far there has been $37 million in supplemental appropriations for the city.  For the upcoming fiscal year, he is proposing an additional investment of $194.5 million.  The additional dollars would go to programs such as Early On and Great Start Readiness programs, epidemiologists to analyze blood lead levels, mobile food banks, lead abatement in Flint homes, specialized therapy for children exhibiting effects of lead, and for water bill relief for residents.  Additionally, Governor Snyder is proposing a $50 million flexible fund that would allow additional resources to be allocated where they are needed after a mid-fiscal year review by the legislature.  On the issue of statewide infrastructure, the Governor stated that the situation in Flint has brought to the forefront the need for updates statewide.  He is proposing $165 million to replace known high-risk lead and copper service lines, to implement improvements or upgrades while repairing roads and utilities, and to develop asset management plans, including analysis of current infrastructure and prioritization of needs.  Third, Governor Snyder addressed the struggles facing Detroit Public Schools (DPS).  By summer 2016, the district will have accumulate $515 million in debt.  His proposal will hold the School Aid Fund harmless, meaning other districts will not see a reduction in state funding due to any additional funds spent on DPS.  The Governor is proposing a $50 million supplemental for the FY16 to help with DPS debt.  Going forward, he’s proposed spending $72 million a year for ten years from Michigan tobacco settlement funds.  The last challenge area is addressing the high cost of specialty medications.  His budget proposes spending $108.8 million on hepatitis C medication and $43.7 million for cystic fibrosis medication for approximately 320 children that are impacted by the disease.  His budget proposal also includes a $30 million reserve fund for other pharmaceutical needs for medications currently in the pipeline.

After presenting the challenges facing the state, Governor Snyder moved onto touting the positives that have occurred in Michigan.  Since 2010 there have been 440,000 new private sector jobs created and the unemployment rate has declined from 11.2% to 5.1%.  He stated that Michigan’s budget process has been nationally recognized as the best in the country, that the state pays our debts and saves for the future.  Governor Snyder also stated that since 2011 the state’s unfunded liabilities have been reduced by more than $20 billion.

Lastly, Governor Snyder transitioned into his executive recommendations for the FY17 budget.  Of the gross spending, 75% would be dedicated to education and health and human services.  Below are the highlights of his proposals;

Education:•    A $150 million increase to the foundation allowance ($60-$120 per pupil)
•    $4 million school safety grants
•    $9 million for water testing in school
•    A 4.3% increase to university operations
•    University tuition restraint at 4.8%
•    An increase of 2.4% for Community Colleges operations
•    An additional $10 million for skilled trades training programs

Safety:•    $9.5 million to fund 85 new state troopers
•    Expand cyber crimes enforcement spending by $2.2 million
•    $8.5 million to train an additional 350 correction officers

Health and Human Services:•    $7.7 million for IT improvements to better monitor child protective services, foster care, and adoption cases
•    Expand the sunset on the Health Insurance Claims Adjustment (HICA)
•    $25.6 million ongoing funding to complete the expansion of the Healthy Kids Dental program to Wayne, Kent, and Oakland counties

Transportation:•    In FY17, there will be increased revenue of $533.3 million for transportation due to the legislative package passed last year.  
•    The Governor proposes spending those dollars in the following manner; $189 million for the State Trunkline Fund, $283 million for local road agencies, and $61.4 million for rail and public transit.

Local Communities:•    Increasing constitutional revenue sharing by 3.9% ($781.5 million)
•    An $11 million competitive grant to encourage more efficient local government
•    $5 million grant assistance for financially-distressed communities

Using the Governor’s recommendations as a template, the House and Senate Appropriations Committees will now being working on their department budgets and holding committee hearings on each proposal.

For more information, please visit www.michigan.gov/mibudget.

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