EDITORIAL: Gov. Rick Snyder’s budget for Michigan inches toward progress

Feb. 08--It's satisfying to see Gov. Rick Snyder finally turn his attention to priorities we've long felt should be atop his to-do list -- namely, an increase in school funding, more money for Flint, and more funding for higher education.

The governor's 2018 budget proposal offered many such pleasant surprises, and relatively few disappointments. Now, it's up to the Legislature to make good on Snyder's plan, which would leave Michigan's students, the rainy day fund and roads in at least marginally better condition.

Still unanswered are questions about Healthy Michigan, our state's version of the Medicaid expansion, enabled by the federal Affordable Care Act. That federal health care reform is now imperiled by President Donald Trump and congressional Republicans who have vowed to repeal it. Questioned by state Sen. Coleman Young II, D-Detroit, new state budget director Al Pscholka acknowledged that Michigan, like other states, is largely left to wait and see what Republicans in D.C. do -- even as millions of Michiganders, including police and fire retirees who lost their city health care benefits in Detroit's bankruptcy, wait in limbo.

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Absent -- thankfully -- from Snyder's budget proposal was any hint of repealing the state income tax, a wrong-headed measure proposed by a Macomb County lawmaker whose disdain for taxes is sincere, but whose math skills, it seems, are lacking; the state income tax brings in $9 billion each year, and replacing that revenue would prove difficult.

But in introductory remarks, Lt. Gov. Brian Calley was quick to assure lawmakers in attendance that the governor's budget proposal offers plenty of tax relief via other mechanisms -- words seemingly chosen to assuage legislative urges for tax cuts.

On its face, a proposal to raise the state's per-pupil funding allotment by $50 to $100 is promising -- although Snyder's target amount falls short of the spending recommended by a state-commissioned adequate education study delivered last year. Still, it's a step in the right direction; also promising is a nod toward differentiated funding, the need for which was also underscored in the adequate education study.

And the additional funding per-pupil isn't a game-changing sum.

"It needs to get put into context that it's less than 1%, and it does not take into account declining enrollment in some districts," said Randy Liepa, superintendent of Wayne County RESA, an umbrella agency that supports local school districts.

Differentiated funding is the recognition that it takes more money to educate kids with unusual challenges -- students who are learning to speak English, or who live in poverty, strongly correlated with poor academic performance.

The state already grants districts -- in theory -- an 11.5% increase over its per-pupil allowance for at-risk kids; Snyder's 2018 budget proposal would both increase by 40% the funds available to help those kids, and expand which kids qualify as at-risk, adding kids who are homeless or in foster care, whose households receive federal food or cash assistance to the free- and reduced-lunch mix.

Snyder would also allow all districts to claim those additional dollars for at-risk kids; currently, only districts whose per-pupil allowance was higher than a state guideline could receive those funds, said Liepa.

What often happens is that the state Legislature only allots a portion of the funds required to meet demand, and parcels out additional funds based not on district need, but what's available, Liepa said.

Also of concern is a change Snyder is proposing to the state retirement system. In the 2018 budget, Snyder would set the assumed rate of return on investment at 7.5%. It is currently 8%.

It's smart to address unfunded liabilities -- when a retirement system's assets aren't generating sufficient income to pay the benefits the system has promised -- in state retirement funds, but it's essential that the increased cost of compensating for a lower rate of return not fall on the entities that pay into those systems.

In other words, if school districts are stuck with a higher tab for retirement funding, it could wipe out the increased per-pupil allotment.

An increase for state colleges and universities, which will restore funding to 2011 levels -- that's before Snyder cut the state's higher ed budget by 15% -- has drawn mixed responses from universities depending on how large of a funding increase they may see.

Snyder has promised another $49 million to the city of Flint, where, because of disastrous state and local decision making, about 9,000 children younger than 6 drank water contaminated by the neurotoxin lead. Snyder continues to recommend that residents drink only filtered water. It's not sufficient to cover Flint's ongoing costs, said state Senate Minority Leader Jim Ananich, D-Flint, but it's money Flint needs.

Flint Mayor Karen Weaver said in a statement that she's pleased Snyder called Flint's situation unacceptable, but listed a string of items that still require funding.

Snyder plans to increase the Michigan State Police budget; plagued by retirements, the force needs new hires to continue its service.

Snyder also recommends an increase to state dollars allotted for child care subsidies, for clothing allowances for low-income children, and for foster and adoptive parents.

All of these are worthy expenditures. Now, it's in the Legislature's hands to make good on a vision of Michigan that's more than bare-bones.

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