Banking & Finance and Government

State approves $54.5B budget

June 18, 2015
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LANSING — Governor Rick Snyder signed a $54.5-billion state budget yesterday with a modest spending boost for education and a temporary increase in road construction funding, pledging to work with lawmakers over the summer on a long-term transportation funding fix.

The plan also includes new initiatives designed to boost early literacy and training for jobs in the skilled trades. The state will spend nearly $1.7 billion, or 3 percent, more than in this fiscal year, according to the state budget office.

The increase is partly due to higher-than-expected enrollment in Michigan's federally funded Medicaid expansion program.

The Republican governor and GOP legislative leaders who joined him at a bill-signing event touted the budget's passage in June for the fifth-straight year, more than three months before the spending plan takes effect Oct. 1.


Programs being cut include financial incentives for the production of movies and TV shows. The budget also closes a juvenile justice facility, eliminates human services positions and includes a pilot program under which welfare recipients suspected of substance abuse will be given drug tests.


It includes $400 million in general funds for road maintenance, $115 million more than this year.

It is the fifth-consecutive year the state will transfer general funds to roads, because traditional restricted sources of revenue such as fuel taxes are not generating enough as people drive less and with more fuel-efficient vehicles.

Snyder said $400 million is the extra amount that would have gone into roads and bridges the first year if voters last month had not defeated a sales tax increase to permanently trigger $1.2 billion a year for transportation.

"You can see a commitment by the legislators, by me, by all of us in government to say we want to invest more resources in transportation, and let's do it in a smart way,” Snyder said. “This was a good step forward as we work on a good long-term solution.”

House Republicans recently approved a plan B that would boost spending on roads largely with existing tax revenue, raise the 15-cents-a-gallon diesel tax in line with the 19-cent gasoline tax and index future fuel tax increases to inflation. The plan would also cut economic development funding and eliminate a tax credit for low-wage earners.

Senate Republicans hope to unveil their own road-funding proposal in early July.


The budget includes a $70-to-$140 increase in traditional per-pupil funding for K-12 school districts, nearly 0.9 percent more for the highest-funded districts and roughly a 2-percent bump for the lowest-funded ones. Public universities and community colleges will get about 1.5 percent more.

Unlike in past years, the education budget had more bipartisan support — at least in the House, where it won approval 99-10.

Final “product”

"We put forward a really good work product here by all working together," said GOP House Speaker Kevin Cotter.

But Nathan Triplett, project director for the liberal-leaning group Priorities Michigan, said there are cuts in critical budgets such as human services, health and environmental quality.

"We can't keep pretending that simply moving funding from one area of the budget to another is going to build shared prosperity in our state," Triplett said.

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