Agreement on budget targets provides more funding for education, personal tax reliefWednesday, May 23, 2012
LANSING, Mich. - An agreement on spending targets by the governor and legislative leaders adds funding to the budget recommendation for fiscal year 2013, with the bulk of the new funding slated for K-12 education and a reduction in personal income taxes.
Gov. Rick Snyder, Senate Majority Leader Randy Richardville and House Speaker Jase Bolger emphasized that 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.
"I appreciate all the hard work by our legislative leaders," Snyder said. "The agreement on spending for the 2013 budget makes strategic investments in Michigan's future and sends another strong signal to our citizens and job providers that we have our fiscal house in order."
The Snyder administration has been meeting with legislative leaders over the past several days to come to agreement on spending in light of the revenue estimating conference held last week which projected an additional $300 million in available revenue. The additional revenue is a result of both an increase in revenue as well as savings from a decrease in caseloads within the Department of Community Health and the Department of Human Services.
"Last year we set a precedent that we will no longer wait until the last minute to pass a common-sense budge for Michigan and we will deliver on that promise once again," Richardville said. "Early completion of the budget allows our schools, communities and many other entities to move forward with their own fiscal plans. We are making great strides in Michigan and forward progress on the budget is further evidence of our commitment to fiscal responsibility."
"State government doesn't have a single dollar to spend that doesn't come from taxpayers and we must handle that money responsibly," Bolger said. "With this budget agreement, people can see the focus on funding classrooms, paying down debt, putting money into savings and providing relief to individual taxpayers. I appreciate the governor and Senate majority leader working with me to provide immediate taxpayer relief within this budget. Not that long ago, no one would have believed that after just two years, Michigan would have deposited $500 million in savings while paying down billions of dollars in debt and cutting taxes. But by working together, we made it happen. Our work isn't done yet and even better things are yet to come."
Specific highlights of the target agreement include:
- Another $180 million is provided to invest in the school employees retirement system and for further support for K-12 schools.
- A total of $90 million in one-time funding is designated for relief in personal income taxes through a reduction in the rate, an increase in the personal exemption or a combination of the two.
- A total of $110 million in one-time funding will be allocated to provide for a shift in transportation funding to provide further support for Michigan roads. The Legislature and the administration are working hard to find a long-term funding solution for Michigan roads. Currently, gas taxes are being diverted from roads, and this additional funding will help bridge the gap until a more permanent solution can be found.
- The balanced budget target agreement provides yet another deposit into the state's Budget Stabilization Fund (rainy day fund). The additional $10 million will bring the fund balance to just over $500 million, another sign that Michigan's budget is on solid footing with strong financial practices in place.
- Funding for local revenue sharing is enhanced by $20 million beyond the recommendation, with $10 million in one-time money and $10 million in ongoing funding. This additional support will assist counties and communities in balancing their budgets to provide needed services to citizens.
- Another $25 million in one-time funding is provided to support of Michigan's film industry.
- An additional $60 million is invested to support home heating assistance through the Home Heating Assistance for the Vulnerable Fund, helping ensure low-income families and individuals have home heating during the cold winter months.
The fiscal year 2013 budget continues to move Michigan forward with a budget that is balanced for the long term. Snyder and legislative leaders are targeting June 1 to finish work on the budget.