CHICAGO — Michigan Gov. Rick Snyder and legislative leaders have agreed on a $50 billion budget framework for 2014 that puts more money into roads, schools and the budget stabilization fund.
The agreement does not include an expansion of the Medicaid program as provided for under the new federal health care law or an overhaul of the state's transportation funding formula, both proposals Snyder pushed.
Snyder said the agreement features "some good things" but fails to address a few long-term issues.
"This agreement is another major step in our effort to reinvent Michigan, but we still have more work to do," Snyder said in a statement. "We will continue to work with our legislative leaders to achieve meaningful reforms to the Medicaid program and to develop a sufficient and sustainable revenue stream to maintain our transportation infrastructure."
It's the second year that lawmakers have not included Snyder's plan to raise new money for transportation infrastructure. Snyder wants lawmakers to impose a new tax or revise the funding formula to generate an additional $1.2 billion in new annual revenue.
The budget agreement reached Tuesday would put an additional $350 million into the budget for roads. Snyder called it a "significant short-term investment" but added that a "long-term solution that provides an adequate, stable funding source is needed to prevent further road deterioration and significant costs."
Michigan's fiscal year begins Oct. 1 but lawmakers hope to complete the new budget by next week.
The all-funds budget totals just under $50 billion, less than Snyder's proposed $51 billion because of the dropped Medicaid and transportation items. The general fund totals $9.4 billion and the school aid fund totals $11.4 billion.
The state's fiscal officials last week held their twice-annual revenue estimating conference. The conference projected an additional $483 million in one-time revenue is available in the rest of fiscal 2013 and $219 million in fiscal 2014.
In addition to putting $350 million into roads, the leaders agreed to put another $140 million into K-12 education, and deposit $75 million into the rainy-day fund. The deposit will bring the fund's balance up to $580 million, up from $2 million in 2010.
On the bond side, the budget calls for $100 million of bonding authority for water and sewer projects across the state. It proposes a competition in 2015 for $100 million in bonding authority to be awarded to a higher education facility that comes forward with the most competitive proposal for education and graduating engineering students. Community colleges would compete for a $50 million bond issue.
Separately, Snyder Monday signed an executive order that transfers the State Building Authority into the department of treasury from the state budget office.
"We wanted to consolidate all bonding functions within the treasury department," said budget spokesman Kurt Weiss. The building authority will continue to issue its own debt — it's one of the state's largest issuers — and the move will only mean a few administrative changes, Weiss said.
