Upper Peninsula, Mich. — The four U.P. representatives and Sen. Ed McBroom released details of the long-awaited budget and road funding deal reached by the Michigan Legislature and governor last night. While Tuesday was the original deadline, a one-week extension was passed to give time to finalize the details.
“This has been a very dynamic and challenging budget,” said Rep. Dave Prestin, R-Cedar River. “The House and governor were determined to get real funding for roads. The House believed it could be done without increasing taxes, but by stripping government waste. Our efforts showed it was possible by fighting ghost employees, department slush funds, empty buildings and tightening general spending.”
The House proposed a trimmed-down budget and a road funding package over the last several months, but it was not until September that the Senate agreed to consider road funding in conjunction with the budget if some additional revenues would also be considered and fewer cuts. The final framework agreed to at the end of September reduces the state budget from $84 billion to $80 billion while increasing road funding by about $2 billion. This marks the first reduction in year-over-year spending since 2011.
“It is remarkable how a long, deep inspection of the state’s spending showed us just why the budget has ballooned from under $40 billion to over $80 billion in just 15 years,” said Rep. Greg Markkanen, R-Hancock, chairman of the House Appropriations Subcommittee on Higher Education and Community Colleges. “Departments had funds for thousands of employees who were never hired and leases for buildings no one uses. It was time to hold them accountable and use the tax dollars for road funding.”
The final road funding plan made use of existing revenue found through these budget reforms, as well as increases in the marijuana tax and a slower implementation of corporate tax reductions. It also includes a major restructuring of the taxes paid at the gas pump by shifting current taxes paid at the pump that do not go to roads to funding roads.
“People believe the taxes at the pump should go to roads,” said Rep. Karl Bohnak, R-Marquette. “This generational change should have been done 50 years ago. This plan also increases available funds for our cities and our counties rather than directing them all to the state. Additionally, it dramatically increases funding for our bridges, which is desperately needed.”
Other highlights of the budget that have been especially important around the U.P. include a continuation of the school breakfast and lunch programs, increases to local bus and transit authorities, increases to per-pupil funding for schools, dedicated transportation funding for rural districts, funding for community arts, and removal of taxes on tips, Social Security and overtime. Importantly, not included were increased hunting and fishing license fees.
“Getting serious about road funding and cuts to wasteful spending made crafting this budget look historically different from past years,” said Rep. Parker Fairbairn, R-Harbor Springs. “Despite that, the U.P. Team was successful in obtaining or restoring some key funding, such as reconstruction from the huge spring ice storm and record per-student funding for our schools.”
Fiscal experts at the Legislature predict a very difficult financial picture coming to the state next year. Legislators say tightening the belt now and getting road funding into a secure position will make next year’s budget far easier to manage. Some local governments will be feeling the biggest pinch as many of them will face static state support or cuts in the budget.
“Various parts of our government, state and local, are having to make do with less in order to see roads be taken seriously,” said McBroom, R-Waucedah Township. “Better road funding, especially to our local road agencies, will hopefully help alleviate some of that pressure by reducing what local governments and residents have to spend out of their own budgets for road and vehicle repairs.”
While this budget’s focus eliminated many of the opportunities for legislative directed spending for local projects and needs, the U.P. Team was still able to secure a number of critical helps for U.P. communities: Menominee Public Schools will receive nearly $5 million to assist with repairs due to flood and asbestos damage, Mid Peninsula schools will receive $245,000 to assist with essential HVAC work, Ishpeming will receive nearly $1 million for a fire truck replacement, Marquette County will receive $3 million for repairs and upgrades to the industrial sites at Sawyer, and Mackinac County will receive a portion of $10 million for ice storm damages. The U.P. Team was also instrumental in seeing community arts grant funding restored.
Overall, McBroom spoke highly of the work and resolve of his fellow U.P. legislators.
“This is the toughest and most thorough budget effort I have ever seen in Lansing,” McBroom said. “While it required letting many of the local projects legislators can obtain to help their communities go and getting a handle on road funding, eliminating so much state wasteful spending and planning for future constraints took determination and discipline.”
The biggest loss for the U.P. Team was the removal of $50 million for infrastructure in Gogebic County. These funds were to match another $50 million put up by Highland Copper to improve public roads, water, electrical and broadband in Wakefield Township. While a serious disappointment, the legislators remain more optimistic than ever about acquiring the funding soon.
“The intensity of the budget process allowed us so many opportunities to discuss this key project with our colleagues and the executive branch,” said Markkanen and McBroom. “Support is increasing, and we are closer than ever to obtaining the final votes of support to see this project kicked into high gear for the benefit of all the U.P., particularly the west end.”
The U.P. Team plans to continue its work for securing funding and policy for the U.P. into the fall. Now that the budget is over, numerous other items will be able to have more focus. Several lapsed funding issues, such as unspent Father’s Day flood dollars in Baraga County and the dollars Aspirus did not take for its birthing center being transferred to Portage Health System, are on the immediate to-do list. The energy bills sponsored by Bohnak and Prestin are now awaiting action by the Michigan Senate.
“Getting the budget done this week means our fall mission to get these critical bills done for the U.P. can have all of our attention,” said Bohnak and Prestin. “Our mines and forest industries, along with all of our homes, face certain massive increases in electrical bills if we do not get this reform. We are working closely with USW and other U.P. stakeholders to get the support we need to get this done yet this year before the increases start that would force the mine to pay $15 million more per month for electricity. Our U.P. future depends on this success.”
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