Snyder Announces Budget Deal

Gov. Rick Snyder, Senate Majority Leader Randy Richardville and House Speaker Jase Bolger today announced an agreement on "spending targets" that could result in the state's budget being finalized by May 31.

Having numbers to work with months before the start of the school year would be a welcome change for officials, who as recently as their complained about having to set their own budgets without knowing how much they'll receive from the School Aid Fund.

“We have no control over our revenues,” board member Frank Reid said. “We only have control over our spending.”

Local officials anticipated a $700-per-pupil reduction in funding – a total $10 million deficit in 2011-2012 – between cuts proposed by the Snyder administration and increases in retirement and benefit costs. , and is expected to ask for similar agreements with other support services, teachers and administrators.

The proposed targets still cut per pupil funding, but by under $100 for districts that meet "specified financial best practice measures as defined in the K-12 appropriations bill," according to a press release issued by the governor's office earlier today.

Following adjusted projections that showed about $500 million more in revenues than state officials expected, the new spending targets restore $310 million in cuts to K-12 school funding. However, of that total, $150 million is reserved for districts that meet best practices that will be defined in the K-12 appropriations bill. A one-time infusion of $160 million to all districts will help defray rising retirement costs.

"We will have a timely, balanced budget in place so that our municipal and school partners can accurately plan for the coming year, avoiding the chaos that too often has been foisted upon them due to Lansing's inaction," Snyder said.

"The budget we are working toward is a solid building block for Michigan's future. Coupled with the recent tax overhaul, this fiscally disciplined, structurally balanced budget will let investors and job providers know that Michigan's house is in order," he added.

Other budget highlights include:

• Reducing the state employee concessions being sought from $180 million to $145 million. 
• $15 million for Economic Vitality Incentive grants that will go to cities, villages and townships; and $15 million for county revenue sharing.
• $50 million added to the Michigan Strategic Fund for economic development activities, including brownfield redevelopment and historic preservation incentives. 
• $25 million for the Michigan film tax incentives, funding projects with the primary goal of creating jobs and supporting a sustainable film industry. 
• $400 million for "savings accounts", including $255 million for the Budget Stabilization Fund and $133 million to a School Aid Fund reserve account for future retirement liabilities.

If lawmakers approve the 2012 budget by May 31, they will be four months ahead of the Oct. 1 deadline established by state law. In addition, Snyder said, they will have set the state up to have a balanced budget in the following year as well.

Stay tuned to Farmington-Farmington Hills Patch for continuing coverage of this developing story. Got an opinion about the budget agreement? Send a letter to editor joni.hubred-golden@patch.com.