State budget & taxes

Well, they cut a deal. In return for a nebulous agreement on a "framework" for shifting new public school employees entirely to a 401k-style retirement plan, Gov. Snyder was allowed to rejoin negotiations over the budget. Literally the same day, a House/Senate conference committee passed a "compromise" version of the School Aid budget for fiscal 2018. As you might expect, it's a mixed bag.

It's budget season in Lansing, and there are some important issues that need to be settled about school funding. But, as any good magician knows, the key to a good trick is to keep your audience's attention focused someplace else.

For that flashy bit of distraction, we have the wrong-headed effort to end the school pension system at a cost of more than a billion dollars a year for the next four decades. Right now, legislative leaders are not only insisting on closing the state public school retirement system (MPSERS) to new hires, but have cut off budget negotiations with Gov. Snyder because of his continued opposition to the retirement changes.

The state's top economists met last week to forecast state tax revenues for the next fiscal year, and they found both good and bad news. On the good side, projected revenues to the state School Aid Fund were higher than previous estimates, making some $153 million more available for the current fiscal year than estimated in January. Estimated revenues for next year (fiscal 2018) were also revised upward, adding almost $190 million to projected revenues, mainly on the strength of higher sales tax collections.

Governor Rick Snyder's proposed school aid budget for next year has been greeted with cautious optimism by public school advocates, and with good reason. All schools would receive an additional $50-$100 per pupil next year, funding earmarked for at-risk students would get a significant increase, and high schools would receive an extra $50 per student to cover their higher costs. But good ideas rarely make it through this Legislature unscathed. This budget in particular is likely to anger pro-privatization forces in the state, setting things up for a major battle over the coming months.