Today, before a joint House and Senate Appropriations Committee, Governor Rick Snyder, Lt. Governor Brian Calley, and the new State Budget Director Al Pscholka presented the executive budget recommendations for the 2017-2018 Fiscal Year.  The overall budget recommendation totals $56.3 billion, an increase of 2.5% from the prior fiscal year’s budget.  Within the budget, 74% is spent on the areas of education and health and human services.  In his opening remarks, Governor Snyder touted Michigan as the comeback state.  He provided several statistics to back up his claim, including; half a million private sector jobs have been created in the state since 2010, the unemployment rate is at its lowest rate in fifteen years, and Michigan’s per capita income growth rate has been faster than the national average.  Next, Lt. Governor Calley stated that in 2011 the state was in a difficult and poor economic position.  Since then, the state has reinvented the tax structure, creating a simpler, more fair and efficient tax system. 

When creating his executive budget recommendations, the Governor focused on prioritizing job creation and the skilled trades, emphasizing a 21^st century education, revitalizing statewide infrastructure, and reducing long-term risks to the state retirement system.  Additionally, under the proposed budget, Governor Snyder’s goal of having $1 billion in the Budget Stabilization Fund would be met.  Below are highlights of the recommendations:

Retirement System:

• Lowering the assumed rate of return from 8% to 7.5%
• An additional $300 million to the Michigan Public School Employees Retirement System (MPSERS)

K-12 Schools:

• Foundation allowance increase of $128 million, $50-$100/per pupil
• Increase at-risk funding by $150 million, $778/pupil
• Expand the definition of “at-risk” to include children in foster care, homeless children, those who receive reduced lunches, and children in families receiving food or cash assistance
• $22 million in additional funding for high school operations, recognizing the additional cost to educate high school students vs elementary students
• A one-time $20 million investment in career and technical education equipment upgrades

Higher Education:

• Increase operation funding by $36.6 million, a 2.5% increase
• Tuition restraint at 3.8%
• Increased funding to scholarship and grant programs, the tuition incentive program, and part-time student grants program

Public Safety:

• Funding for an additional school of one hundred state troopers
• Funding to expand computer crimes enforcement, forensic science, emergency management, sexual assault prevention and education, and statewide communications system upgrades
• $10 million one-time investment into the Disaster Emergency Contingency Fund

Health and Human Services:

• Increased wages to mental health direct care workers
• $5.6 million to expand the Pathways to Potential program
• Increase the low-income children clothing allowance from $140 to $200/year

Veterans & Seniors:

• $3.6 million increased funding to veteran homes staffing and training
• Investment of $3.6 million additional dollars to eliminate the wait list for in-home services for seniors

Public Health:

• $2.6 million to expand the Lead and Copper Program
• $4.9 million for vapor intrusion, allowing the Department of Environmental Quality to investigate and to support the Department of Health and Human Services to determine threats and how to respond
• $48.8 million to the City of Flint; $25 million for a reserve fund and the remainder for on-going and expanded programs including water filter cartridge replacements and nutrition services

Natural Resources:

• $19.5 million for state parks special maintenance; $10 million one-time and $9.5 million on-going funding
• $1.8 million to hire additional conservation officers
• $1.1 million to implement federal food and dairy requirements

Economy:

• $125.5 million for business attraction and community revitalization
• $5 million one-time funding for talent marketing
• A 32% increase to the Going Pro Program (skilled trades training)

Local Communities:

• A 2.3% increase to Constitutional Revenue Sharing
• No changes to Statutory Revenue Sharing
• $11.2 million, a 10% increase, to arts and cultural programs

Infrastructure:

• $2 million for a pilot program of an integrated asset management database
• $20 million deposit into the Michigan Infrastructure Fund
• Calling on the legislature to work with him to review Act 51 in order to find a more rational way for funding
• Looking at creating sustainable funding, the Governor will come back with recommendations to the legislature prior to finalizing the budget

Using the Governor’s recommendations as a template, the House and Senate Appropriations Committees will now begin working on their department budgets and holding committee hearings on each proposal.  Chair of the Senate Appropriations Committee, Senator David Hildebrand, stated that he and the House Appropriations Chairwoman Laura Cox have agreed to an aggressive schedule in order to complete the budget ahead of the state’s new fiscal year beginning on October 1, 2017.

For more additional information and budget documents, please visit www.michigan.gov/mibudget.

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