BY THE MICHIGAN DAILY
Published January 13, 2014
The state of Michigan can expect a $917 million budget surplus, according to estimates from the Consensus Revenue Estimating Conference on January 9th, where the representatives of the State Treasury and the House and Senate fiscal agencies met to discuss economic forecasts. As the state continues to recover from the national recession, the bulk of the surplus should be spent on education funding and tax rebates for pensioners who were unfairly targeted by recent policy changes. The state government should also allocate funds for infrastructure, the civil service in Detroit and renewable energy.
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The budget for 2013 amounted to $48.2 billion, and included the $400 million budget surplus from 2012. While this is the second year in a row that the state of Michigan has seen a surplus — 2011 saw a budget deficit that totaled $1.5 billion — it has certainly come at a cost. To get there, the state made significant cuts to education spending for the second year in a row, despite hinting that a reprieve may come after the 2012 cuts to per-student allocation for schools. Gov. Rick Snyder has also cut funding from higher education and should restore funding to public universities. A plan to aid struggling school districts is also critical, as 50 school districts ended the 2013 fiscal year with budget deficits. Pension recipients were also negatively affected by Snyder’s budgetary policies. Both public and private pensioners saw increased tax rates from 2011, significantly burdening their limited, fixed income. These two groups deserve a share of the budget surplus, especially as their reasons for needing the money stem from budget cuts and taxes that were levied by the state. However, even if education funding is increased and pensioners receive a tax rebate as a result of the surplus, Snyder does not deserve to be lauded as an advocate for education or a friend to retirees — something that would be expedient in an election year.
Michigan should take note of other municipalities that are trying out innovative ways to promote education. San Francisco has created a program that creates a savings account for every kindergartener, and places a seed of $50 in the account. It then partners with business to match contributions by friends and family into the fund. It helps students save for college starting at a young age, and should be used to make college more affordable for families with financial need.
Other priorities for the surplus money should include infrastructure, renewable energy and Detroit's civil service to help the city pay employees and pensions. Michigan’s roads and road clearing systems have proven inadequate this winter. Major Michigan roads were not cleared for up to two weeks after the storm Jan. 4, caused by the polar vortex. Some roads were cleared quickly, but many remained icy and snow covered long after storm had ended, making travel difficult for students and faculty returning to campus after holiday travel. Grants to counties in need to aid in winter cleanup could help people all over the state get to work and school, as well as reduce the dangers of driving on inadequately cleared or un-cleared roads. Looking to Michigan’s future, investing in renewable energy will help the state wean itself off of fossil fuels. Wind energy in particular has become much more efficient. In 2009, the cost of wind energy was about $100 per megawatt-hour. This has since decreased by about half. Furthermore, a state energy commission report has concluded that Michigan is on track to meet its requirement that 10 percent of electricity come from renewable sources by 2015, and it will be economically viable to increase that standard to 30 percent by 2035. Additional funding from the state government could provide the necessary push to make that happen. Finally, some of the money should be set aside to help Detroit as it restructures, especially to help it meet pension obligations and meet its obligations to its current employees.
Snyder’s surplus was created through sacrifice by specific constituencies in the state. Michigan schools and pensioners deserve to be repaid for their contributions in creating the surplus in the first place. The rest of surplus needs to be spent on Michigan’s infrastructure and investing in its future. Educated students and a clean environment will ensure a promising future for the state.