Local officials awaiting state spending proposal

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Rick Snyder The Associated Press/Al Goldis

February 5, 2012

Snyder is scheduled to unveil his plan on Thursday

THE ASSOCIATED PRESS Associated Press Sun Feb 05, 2012, 07:14 AM EST

LANSING (AP) — The budget proposal that Gov. Rick Snyder will deliver Thursday isn't expected to contain the sweeping tax changes and spending cuts that made last year's plan such a change from the past. Still, it's creating some anxious moments for school officials and local government leaders waiting to hear how and when the cuts they took in the current budget might be reversed.

"We'd like to see a stronger investment in education as we go forward," Peter Spadafore of the Michigan Association of School Boards said. "(But) it sounds like the days of per-pupil increases in the triple digits are probably behind us for the time being."

The Republican governor already has said he plans to put more money into education and public safety and that he wants $1.4 billion more for road and bridge repairs in the budget that takes effect Oct. 1. But with state revenues growing slowly and the economy still soft, Snyder isn't planning to increase spending sharply, and he may hand out any extra money as one-time help rather than permanent increases.

"We have enough out there to address a lot of the hot spots and to begin to make the strategic investments back in the system that need to be made," budget director John Nixon told The Associated Press. "We still have to make tough decisions because, if you had four or five times the amount or revenue we had, you still couldn't meet all the requests that are out there, and all the need."

Nixon wants to use the money to pay down the state's unfunded pension obligations for teachers and beef up the state's rainy day fund, leaving less for budget increases.

Democrats have made it clear their top priority is to get more money for public schools and universities. School districts took a cut of more than 2 percent in this year's budget, or nearly $1 billion, and many have had to lay off teachers and contract out food and janitorial services to absorb the cuts. Funding for state universities dropped by 15 percent, and many raised tuition nearly 7 percent to make up for the lost state support.

"We have been pushing to try and get the full restoration of the K-12 budget," said House Democratic Leader Richard Hammel, of Genesee County's Mount Morris Township. "That's the big priority for us. My hope is they'll put all the money that they have there."

Democratic lawmakers balked last year when Snyder and GOP lawmakers pushed through a massive budget cut for businesses and took money normally set aside for public schools to pay universities and community colleges. Spadafore said he hopes the school aid fund in the next budget year will be tapped only for K-12 funding.

Just as he did this year, Snyder will tie at least some spending increases to incentives school districts and local governments can go after to increase their share of state funds. Snyder used one-time funds this year to give money to districts that showed they were willing to privatize services such as busing and student meals or combine services with other districts. The state also helped pay a portion of the payments districts owed toward teachers' pensions.

Snyder wants to eventually tie some education funding to student achievement, but said mechanisms to do that probably won't be in place by next school year. Instead, he's looking at offering grants to school districts willing to experiment with ways to better measure student achievement. His long-term plan remains to have some school funding tied to what students learn.

He's also expected to call for ending the guarantee of retiree health care for any new teachers hired in coming years, instead giving them a contribution toward their defined contribution retirement plans to cover health-care costs when they retire.

Local governments, some of which took state funding cuts of 30 percent this year, were able to make back some of the money by posting online reports on their finances and privatizing or consolidating services.

A University of Michigan poll showed the promise of additional money was a powerful incentive, as 90 percent of the 486 eligible local communities jumped at the chance to put online performance reports and a citizen's guide online in return for more funding. But less than half of the local leaders polled thought the online reports would improve government transparency or accountability.

Snyder and Nixon continue to think it's best to tie dollars to specific goals so everyone is moving in the same direction.

"There are some really, really well-run school districts out there. There are some really, really well-run local governments," Nixon said. "But there are others who are trying but they're not doing quite as well. What this does is obviously give them that extra little incentive to really focus in on it."

Snyder again will present much of the budget proposal himself with help from Nixon and Lt. Gov. Brian Calley. The House Appropriations Room on the third floor of the Capitol where the presentation will be made is expected to be standing-room-only.

"We're happy to hear that the governor's talking that there will be no more cuts to education in this round of the budget. We're anxiously waiting to see what that looks like," Spadafore said. "February 9th is a date that all of us have marked on our calendar."