Snyder, lawmakers reach deal on framework of Michigan budget - boost in road funds planned



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LANSING, Michigan — Gov. Rick Snyder and Republican lawmakers agreed Wednesday on a framework for Michigan's next budget that includes spending $400 million in general funds for transportation infrastructure, weeks after voters rejected a sales tax increase to permanently trigger $1.2 billion more annually for road and bridge improvements.

It is the fifth straight year the state will transfer general fund money to the road budget. That's in part because the traditional sources of restricted revenue — gasoline and diesel taxes along with vehicle registration fees totaling $1.9 billion — are not generating enough as people drive less and with more fuel-efficient cars.

Legislators had allocated $285 million in general funds for roads in the current $3.7 billion transportation budget, a drop from $337 million in the last fiscal year. The $400 million — much more than the $140 to $160 million in general funds that had been planned for transportation — became available after rosier revenue estimates were released last week.

Leaders plan to work on an elusive long-term funding fix for roads in the summer.

The budget deal also includes $25 million for movie and TV incentives. The House had wanted to end the program, while the GOP governor and Senate had proposed the typical $50 million in funding, which was slashed months into the current budget year to address a deficit.

Snyder and lawmakers also met in the middle on university operations funding, agreeing to boost overall spending by 1.5 percent. The schools would have to keep tuition hikes to no more than 2.8 or 3.2 percent to receive their funding; the exact cap will be decided in coming weeks.

With spending levels in hand, legislative conference committees now must resolve other remaining differences, particularly some major ones in spending plans for K-12 schools and the Department of Health and Human Services. Another sticking point is whether to trim revenue sharing payments to Detroit.

"We've have to make some tough decisions to reinvest more in our infrastructure," said Senate Appropriations Chairman Dave Hildenbrand, a Lowell Republican. "You'll see reductions throughout state government."

GOP legislative leaders want to finalize the $50 billion-plus budget in early June, four months before the start of the fiscal year.

The agreement calls for putting $95 million into the state's savings account, bringing the total to just over $600 million.

Compared with Snyder's initial proposal, areas that will get less general fund money include community colleges, higher education, the state Education Department and corrections. Agencies that would receive more than called for under Snyder's plan three months ago include the attorney general's office, military and veterans affairs, talent and economic development, and technology, management & budget.

"I am pleased with how quickly the process has moved along and I think this is a testament to the strong working relationship we have with our legislative partners," Snyder said in a statement.


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