The governor and legislative leaders agreed today on spending targets for next year's state budget, with the bulk of increased revenue from Michigan's growing economy going to the key priorities of K-12 education and state roads.
Gov. Rick Snyder, Senate Majority Leader Randy Richardville and House Speaker Jase Bolger acknowledge there is still work to do before the budget is signed, but that the setting of spending targets is a significant accomplishment in moving the process forward.
"Our legislative partners have worked closely with the administration on the funding priorities," Snyder said. "The agreement on spending targets for the 2014 budget is an important step as we move toward the finish line for next year's budget plan."
The agreement follows last week's revenue estimating conference, which projected an additional $482.6 million in one-time available revenue in FY 2013, and another $219.3 million in ongoing revenue in FY 2014. The increase in revenue is due primarily to stronger than expected collections from income tax annual and withholding payments as well as business tax collections.
"For the past two years, our focus in the Senate has been on working with the House and the Governor to deliver a thoughtful financial plan for our state," said Richardville. "Through the hard work and effort of the subcommittee chairs and members of the legislature, we will again pass a budget well ahead of schedule. I have great confidence in the ability of the conference committee members to move the process along as we come closer to a final budget."
"With today's target agreements, we are on target to complete a structurally balanced and financially healthy budget four months early for the third year in a row," said Bolger. "By remaining focused on additional money for K-12 education, roads, paying down debt and putting money into savings, we are keeping Michigan on a solid path toward success for its residents. Over the past few years, people have seen us create people-centered budgets that focus on individual success rather than government-centered budgets that grew bureaucracies and added to the debt burden of our kids and grandkids. Individual success means success for the state as a whole, and you're starting to see that as unemployment goes down, personal incomes go up and we are able to leave the years of perpetual budget deficits and mid-year spending cuts behind us."
Specific highlights of the target agreement include:
- An additional $350 million in funding for Michigan's transportation infrastructure and the improvement of Michigan roads. While this is a significant short-term investment, a long-term solution that provides an adequate, stable funding source is needed to prevent further road deterioration and significant costs.
- An additional $140 million in direct support for K-12 schools.
- The balanced budget target agreement provides yet another deposit into the state's Budget Stabilization Fund (rainy day fund). The additional $75 million will bring the fund balance to $580 million, further solidifying Michigan's strong financial position.
- Funding for early childhood education is solidified at $65 million in FY 2014 with another $65 million targeted for FY 2015, establishing a strong foundation for effective learning that will last throughout a child's life.
- The governor's recommendation for the Healthy Kids Dental program is supported with requested funding to help provide needed dental care for low-income children.
"This agreement is another major step in our effort to reinvent Michigan, but we still have more work to do," added Snyder. "We will continue to work with our legislative partners to achieve meaningful reforms to the Medicaid program and to develop a sufficient and sustainable revenue stream to maintain our transportation infrastructure."
The fiscal year 2014 budget continues Michigan's move as the comeback state with a budget that is balanced for the long term. Snyder and legislative leaders are targeting June 1 to finish work on the budget, in keeping with the early completion dates of the last two years. Timely completion of the budget is important because it gives schools and municipalities time to do their planning.