5 hints to how Rick Snyder may handle Michigan's very own economic stimulus
The heavens have opened, and, after a period of extended financial destruction, Michigan finally got some good budget news Friday.
The Michigan Senate and House fiscal agencies separately predicted that the state will collect somewhere in the range of $400 million to $700 million more in revenue than it had previously expected for both 2010-11 and 2011-12, according to multiple reports.
All of a sudden, everyone's got a suggestion as to how to handle the new money — which, to be sure, is equivalent to about one-third of what the state will lose due to the $1.7 billion business tax cut Gov. Rick Snyder is expected to sign into law.
Nonetheless, half a billion dollars could be the difference between reasonably sized K-12 classes and overcrowded classes, huge tuition increases and modest tuition increases, healthy public safety budgets and anemic spending for police and fire services.
But if we've learned anything from Snyder's first 4.5 months in office, it's that he's bound to take a nontraditional approach to handling the sudden influx of cash.
Here are 5 bits of insight on how Snyder may handle the good news — and why he won't just start doling out cash to anyone who asks:
1. During his gubernatorial campaign, the Republican decried former Gov. Jennifer Granholm's handling of the billions in federal economic stimulus funding distributed to the state. Instead of using the funding to push for structural changes, she worked with the state Legislature to use the funding to simply plug the deficit and put off the tough, structural budget choices.
Now Michigan's got a fresh chance at handling an economic stimulus package, so to speak. Snyder won't do what Granholm did.
2. Snyder likes to wield money to push for more changes at cities and schools. Using the extra cash as incentives to nudge municipalities and school districts would fit with Snyder's style. It's exactly what he's doing with his municipal revenue sharing proposals and what he wants to do with his education reform initiatives. Now, he's got a bigger pot of cash and he'll surely be tempted to ramp up incentives.
3. The former Ann Arbor venture capitalist has been itching to set up a rainy day fund for the state. Saving cash for later is not the popular political choice. But Snyder has been trying to spotlight the state's lack of savings for months. He may view the new cash as the perfect opportunity to start saving.
4. Pressure is mounting for Snyder to reduce the funding cuts he's proposed. Although he would likely prefer to stick to his previous proposals for spending cuts, it'll probably be politically impossible to keep legislators — Democrats and Republicans — from demanding lower cuts. We can probably expect schools, in particular, to get a bit of a reprieve.
5. Anyone's guess. Snyder has already proved that he can be unpredictable. Anyone who suggests raising taxes on senior citizens — which he has officially accomplished — is clearly willing to take politically risky steps. So, Snyder may dismiss the first four things on this list in favor of something else.
One area that comes to mind is health care. He hasn't yet said much about how he plans to shape Michigan's health care spending. But we know that he favors an increased emphasis on healthy living.
Regardless, this much is for sure: The influx of new dollars marks the start of another period of political wrangling in Lansing. Money is the root of all political fights.