GOP leaders set spending without Snyder amid pension impasse

May 30, 2017

MACKINAC ISLAND, Mich. (AP) — Republican lawmakers could approve a state budget without the agreement of Gov. Rick Snyder for the first time in his tenure after an impasse with him over making newly hired school employees ineligible for a pension in retirement.

Legislative leaders signed “target” spending levels over the weekend — a key step before the GOP-led House and Senate can start ironing out differences in a $55 billion plan beginning Tuesday. The last time such a deal was struck without the governor’s involvement was 2009, when Democrat Jennifer Granholm was in office and the state faced budget deficits.

There is no such revenue shortfall this time.

Republicans’ agreement would hold in reserve $475 million that Snyder proposed saving or spending. It would instead earmark the money for initial transition costs to make new school workers eligible for a 401(k) only and not a hybrid pension/401(k) plan in the Michigan Public School Employees Retirement System. The Republican governor and Democrats oppose the switch.

“We believe in what we’re doing. We’ve set targets in a way that we’re going to be able to show the governor we have the money to do the MSPERS, and that’s our intention,” Senate Majority Leader Arlan Meekhof told reporters at the Capitol.

“Reforming MPSERS and finding a solution to the debt crisis crushing our local schools and teachers is critically important, and that is why the House and Senate are continuing to move the budget process forward with a focus on this issue,” said Gideon D’Assandro, spokesman for House Speaker Tom Leonard.

Snyder spokesman Ari Adler said the governor still wants to work with the Legislature on the budget.

“Gov. Snyder remains committed to a responsible budget that is smartly balanced and serves Michiganders well now and into the future,” he said.

Adler declined to say if Snyder would veto a budget that incorporates spending for the pension change, saying “it’s way too early to talk about anything like that.”

Legislative economists estimated last week that closing the hybrid plan, which Snyder has said is working because is it better funded than a plan for more veteran teachers, would cost Michigan an average of $465 million more annually in the first five years.

The stalemate between Snyder and GOP legislators could delay enactment of the budget, which typically is wrapped up in early June — months before the October start date. The governor and legislative leaders likely will discuss the issue privately at the Detroit Regional Chamber’s annual policy conference on Mackinac Island this week.

House Minority Leader Sam Singh said Democrats’ priorities in the budget process include using money Snyder wanted to add to savings to instead boost roads and other infrastructure and ensuring additional school aid fund revenue goes toward a higher per-student increase in state aid.

“If those dollars and resources are available, they should be put toward the classroom. That’s what our teachers are asking,” he said.


Associated Press writer Chris Ehrmann in Lansing contributed to this report.


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