Eye on Lansing: Is there a windfall on the horizon for Michigan? Snyder cautions against banking on extra money for state budget

By Tim Martin

Associated Press

LANSING, Mich. (AP) -- Gov. Rick Snyder on Tuesday cautioned against making premature plans to alleviate Michigan's budget problems with money the state doesn't yet have.

The state's economy appears to be improving and tax revenues to state government have come in better than analysts expected just a few months ago. Some lawmakers are hoping that up to $500 million in additional money may be available after state economists gather for next month's official revenue estimating conference.

At the conference, analysts from the Snyder administration and the nonpartisan House and Senate fiscal agencies will provide new revenue estimates to shape how much spending lawmakers can authorize for the budget year that starts Oct. 1. If more money than expected becomes available, some lawmakers will push to use it to reduce cuts that are planned for public schools.

Snyder sounded a cautionary note Tuesday.

"The revenue conference hasn't happened yet," the Republican governor said. "So one of the things I would say is, I don't want to speculate on us having more dollars."

Even if more money becomes available, there's no guarantee it would go to schools. Districts face cuts of $300 per student under Snyder's plan, in addition to a $170 per student reduction that's already in place.

Snyder said education is one area that potentially could be considered for additional spending if money becomes available, but he also noted that the state's budget stabilization or "rainy day" fund is low. At roughly $2.2 million, Snyder said it would cover state spending for only about 30 minutes.

The Republican-led Michigan Legislature continued to take votes Tuesday on state budget plans based on the latest officials revenue projections made in January. Based on those calculations, the Snyder administration has projected revenue may be about $1.4 billion short for the next fiscal year.

"It's inappropriate to spend hypothetical money," said Ari Adler, a spokesman for Republican House Speaker Jase Bolger.

The House Appropriations Committee considered multiple bills Tuesday, including one aimed at reining in prison spending. The Republican-backed plan would close Mound Correctional Facility in Detroit next year, in addition to two prisons expected to close this summer.

The Senate approved multiple budget bills, including one along party lines that would limit able-bodied welfare recipients to four years of benefits. Similar proposals are backed by Snyder and Republicans in the House.

Opponents say the welfare restrictions will push more families into poverty.

Democrats are angry about the cuts, particularly to education, saying they're being made only so Snyder can afford his plan to cut business taxes.

Lawmakers are scheduled to continue preliminary budget votes Wednesday. Snyder would like lawmakers to hold final votes by May 31.

Published: Thu, Apr 28, 2011


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