Gov. Rick Snyder will propose growing Michigan's savings account to $1 billion, even as Republican lawmakers push for an income tax cut.
LANSING, Mich. (AP) — State budget director Al Pscholka told The Associated Press on Tuesday that Governor Snyder will ask to deposit a "sizable" $260 million to the budget stabilization fund — also known as the rainy day fund — in the next fiscal year. It would be the largest deposit since Snyder's first year in office, when the fund had just $2 million.
The Republican will unveil his budget plan Wednesday. It will include no tax cuts and is expected to feature modest spending increases for education, public safety and infrastructure.
Pscholka said it's smart to save money because of "one-time" tax revenues and looming budget pressures.
"It's good conservative budgeting," he said in a phone interview, adding that saving more and addressing long-term liabilities such as those facing the Public School Employees Retirement System are "maybe not the sexiest" but are "very smart things."
The GOP-controlled Legislature voted to permanently shift general funds to road and bridge repairs starting in 2018 as part of a 2015 transportation funding deal that hiked fuel taxes and vehicle registration fees. Other squeezes include the cost of expanding Medicaid to more than 600,000 low-income adults under the federal health care law and the phase-out of business equipment taxes.
Snyder also will propose directing $1.2 billion to the teacher retirement system and continuing a formula whereby lower-funded K-12 districts get double the increase in per-pupil state aid that higher-funded districts receive. The state's 15 public universities would get 2.5 percent more overall for operations, with increases varying by school.