Snyder signs $49B budget; Medicaid expansion on hold

6/15/2013

LANSING — Michigan Gov. Rick Snyder signed a $49 billion state budget that sets aside more money to fix deteriorating roads and provide preschool to low-income children, but does not include — for now — his call to expand Medicaid eligibility to hundreds of thousands of Michigan adults.

The Republican governor called the spending plan “very solid” and said it is the third straight year a “structurally balanced” budget is done in June, months before the Oct. 1 start date.

The 2013-14 budget is nearly 1 percent bigger than the current year and has no general tax increases.

Overall spending for public K-12 schools will increase about 3 percent. Public universities cannot raise tuition more than 3.75 percent without losing some funding available to them.

The budget plan blocks the Snyder administration from paying to implement a set of more rigorous national standards in reading, writing, and math — standards he supports — until the GOP-led Legislature says it is OK. But about 16,000 more disadvantaged 4-year-olds will be eligible for preschool thanks to an influx of $65 million, part of Mr. Snyder’s plan to double the Great Start Readiness program over two years.

“This is a huge step forward in terms of early childhood education in our state,” he said before signing two budget bills Thursday while flanked by Republican legislative leaders and appropriations chairs in his office across from the Capitol.

“I hope we’re going to be back here next year talking about another $65 million so we can make that whole waiting list goes away.”

The budget includes an additional $350 million to fix deteriorating roads and bridges — a significant one-time expenditure, thanks to higher-than-expected income tax collections. It’s far short of the $1.2 billion a year that would be raised under Mr. Snyder’s stalled increase in gasoline taxes and vehicle registration fees.

Negotiations on road funding will continue this summer, but legislators are not expected to vote on anything for months, if at all.

Mr. Snyder’s request to expand Medicaid eligibility to more poor adults also is not included, but lawmakers are working to approve Medicaid expansion before they break next week.

The House approved the expansion Thursday night on a 76-31 vote.

Another $75 million is put into savings, bringing the rainy-day fund to nearly $600 million. It was nearly empty when Mr. Snyder took office, and he said he ultimately wants at least $1.2 billion in savings — about 6 percent of state revenue.

Democrats said the budget does not spend enough on education after cuts were made in 2011. They also said Republicans should have considered giving tax relief to people after raising individuals’ taxes for the 2012 tax year and beyond.