From the Daily: A good first step

BY THE MICHIGAN DAILY

Published February 9, 2014

Michigan Gov. Rick Snyder recently unveiled his plan for the state’s 2014-2015 budget. His recommendations include a 6.1-percent increase in higher education funding, the allocation of $120 million to the state’s Rainy Day Fund, and $120 million toward covering extra Medicaid costs. Snyder’s plan also calls for retroactive tax relief, a $322-million increase in K-12 school funding and $97 million toward environmental protection and the improvement of water quality. While it is good that Snyder's latest budget focuses on health, human services and education, the recent surplus money and Rainy Day Fund should be used to invest in renewable energy.

Snyder’s budget increases higher education funding. By tying these funds to limits on tuition increases, Snyder provides incentives for colleges to keep education affordable. Thirty percent of Snyder’s proposed budget focuses on education, including support for both universities and K-12 schools. Currently, the funding formula for higher education links funding to performance, which has proven ineffective. In the case of Wayne State University, performance-based funding has failed to cover the needs of all students and has forced the university to raise tuition in lieu of receiving the funds. In addition to increasing funding to higher education, Snyder should review existing institutions and their effectiveness.

It is important that Michigan’s workforce receive the attention it needs, especially in terms of liability and health obligations. The budget suggests prefunding the Michigan Public School Employees Retirement System, reducing unfunded liability from $46 billion down to $31 billion. Though this year’s budget will not eliminate unfunded liability entirely, Snyder has assured the state that progress is being made. Medicaid expansion is also being addressed under the new budget with a call for a $12.3-billion allocation for health care. This money will be dispersed to 2.2 million Michigan residents. Funding the health of Michigan residents is crucial to ensuring the productivity of Michigan’s economy.

In light of his failing Sierra Club rating, Snyder has proposed environmental and energy investments; however, he could make an even greater commitment to green energy. Rather than maintaining a stagnant Rainy Day Fund, Snyder could further his development of renewable energy by weaning Michigan off harmful fossil fuels. In Snyder’s State of the State address, he pushed for more discussion on green energy, but only a small portion of his budget will go toward this area. Snyder should put more money into the development of wind turbines, solar energy and other sources instead of housing it in the Rainy Day Fund.

In respect to his budget proposal, Snyder has worked to appease both parties of the state government, despite it being an election year.While his Republican colleagues argues that this Rainy Day Fund is a result of over-taxation and that much of the money should be returned to taxpayers, Snyder is opposed to tax cuts. He has instead proposed increasing motor fuel taxes from 19 to 33 cents per gallon, enabling a $728-million raise in the 2014-2015 fiscal year. He plans to maintain or raise tax standards in an effort to further improve health, education and human services, and he should be commended for it.

For the most part, Snyder's new budget plan emphasizes what is important to Michigan residents. Unfortunately, Snyder still has a reputation of cutting spending from education. If he is reelected, Snyder's future budget plans need to continue to allocate funding for higher education and health, while pushing the envelope in renewable energy.