Legislature signs off on state budget
Legislature signs off on state budget
Locals react to spending decisions
By KAYLA GAHAGAN, DMG Writer and The Associated Press
LANSING — Next year’s state budget looks a little like robbing Peter to pay Paul. While most municipalities will see no or little increase from this year’s budget, schools are next in line for a little extra.
The new budget agreement moved through the state Legislature on Wednesday where the state House and Senate signed off on agreements announced late last month by Democratic Gov. Jennifer Granholm and Republican leaders. The budget bills that cover the fiscal year beginning Oct. 1 now head to Granholm.
Two main budget components are a $13 billion school aid fund and a $9.2 billion general fund, which helps pays for state services in several departments from prisons to health care.
But it might be a little too late, said John Vaara, superintendent of Hancock Public Schools, whose school system will see a $210 per pupil increase, along with all K-12 schools. Universities, community colleges and K-12 schools come out ahead in the next budget for the first time in a few years.
“We obviously appreciate this increase, but it doesn’t pay the increase in retirement and health care insurance rates,” he said. “We will (use the increase) to just try and maintain our basic programs. It doesn’t allow us to do anything special.”
He said an increase in funding for education, however slight it is, naturally endangers funding for other forms of government.
“Education is very, very important, but if you were a citizen, you might say so is the police force,” he said.
Among universities, the biggest winner is Grand Valley State University, scheduled for a 6 percent increase in state aid. Wayne State University and Michigan Technological University will get the lowest proportional increases at 2.5 percent.
The average community college increase is about 3 percent.
Tech Chief Financial Officer Dan Greenlee said the school runs into the same issues the K-12 schools face as far as health care costs and inflation.
“The offset to the state’s appropriation dollars is in the process of raising tuition and fees to the students,” he said, adding that Tech has been able to keep tuition increases as one of the lowest in the state until this year. The money has to come from somewhere, he added.
He noted that state appropriations provide about 43 percent of Tech’s general fund revenues.
“They are a very significant part of our revenue stream,” he said. “We regret (the tuition increases), but we need to do it in order to fund the education of the students.”
Their golden egg is research, he said.
“We are hopeful,” he said. “The state appears to be focusing more on research which is good for Tech. (They) recognize and reward those institutions that perform research, which will lead to industry and business growth in the state.”
But in communities, many will have their state revenue sharing frozen under the new budget agreement. The general fund likely will be about 2 percent higher next fiscal year than it is this year, but most departments will get modest budget increases or remain the same.
Scott MacInnes, Houghton’s city manager, said about one third of the city’s budget is shared revenue from the state.
“Municipalities are usually lower on the totem poll than education,” he said.
The city is among local governments that have experienced flat revenue sharing funding and cuts in recent years because of the state’s budget problems. Many were hoping for an increase in the upcoming year.
“We’ve had to cut services every year,” he said. “Our budget is the same as it was three years ago. Costs are going up, but revenue isn’t.”
Most communities will get the same amount of money from the state in revenue sharing, which helps local governments pay for police, fire and other services.
Some municipalities, mostly rural townships, may get more money than last year. The overall revenue sharing amount will be about $1.1 billion.
The flat funding means that many local governments will have to delay road construction projects and may continue to struggle staffing police and fire departments, according to the Michigan Municipal League.
‘‘We should be a partner with the state,’’ East Lansing Mayor Sam Singh said. ‘‘Unfortunately, this budget does not show it.’’
Vaara said they are trying to remain hopeful.
“We are optimistic,” he said. “The problem is I’m also realistic in looking at our state economy. Something significant is going to have to happen to improve this.”
Kayla Gahagan can be reached at gahagan@mininggazette.com
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