Analysis: Snyder's budget proposal reflects a return to financial stability for the state

After years of painful budget cuts and declining revenue, the state's core financials have stabilized — and officials project more of the same over the next few years.

"Michigan is on a positive path to success," Snyder said today in Lansing. "It is exciting."

Snyder today proposed a boost in funding for public schools, universities and community colleges, public safety and economic development in a sharp reversal from years of funding cuts.

Snyder's $48.2 billion budget proposal — which comes after a year of significant funding cuts for many public services — reflects a $623 million uptick in revenue for the state as the economy stabilizes.

That surge in revenue — powered by better economic circumstances, including profitable auto companies — has already set off a scramble for more dollars among interests.

The budget proposal released by Snyder was built on nonpartisan state fiscal forecasts indicating that the state's budget will be stable at least for the next few years.

To be sure, there's room for debate over whether the cuts Republicans enacted in 2011 were appropriate. But it cannot be denied that the state's balance sheet looks healthy now.

Snyder, in an electronic budget message delivered to the state Legislature, said the state is projecting revenue growth for the next two fiscal years, including the fiscal year that would end in summer 2014 — months before Snyder would be on the ballot for reelection.

The state's return to budget stability is already drawing national attention, including a front-page story in today's New York Times, which described Michigan as "the most unlikely example of a phenomenon that was unimaginable in most states in recent years."

Although Michigan's budget surplus is being celebrated in a bipartisan fashion, the divide over how to spend the surplus reflects a philosophical divide among the state's leaders.

“The governor promised us solutions, but instead his budget only gives us empty gestures designed to disguise the damage this administration has done to Michigan’s public schools,” said state Sen. Minority Leader Gretchen Whitmer, a Democrat, in a statement. “The budget he is proposing for our K-12 schools amounts to putting a drop of water into a bucket he’s already cut a hole out of. It does nothing to solve the real problem he’s created.”

Snyder proposed a small uptick in funding for several core services — including a 3 percent increase for public universities, $113 million for public schools and an additional $190 million for schools that agree to various "best practices," such as dual enrollment and participation in schools of choice.

But Snyder reiterated his philosophy that public spending won't create jobs.

"Jobs come from the private sector and we need to encourage their growth," he said.

However, Snyder does believe that certain elements of the state government can boost the economy. He proposed a $195 million budget for the Michigan Economic Development Corp., which reflects a $20 million increase from 2011-12.

Snyder, in the digital message, said he wants "a continued focus on an economic gardening strategy to help local businesses grow."

Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.