Education, GOPocrisy, Michigan Republicans, Rick Snyder — February 19, 2015 at 12:36 pm

Michigan GOP moves to fill budget crater from corporate tax breaks by robbing a quarter billion dollars from schools


To hear Michigan Republicans tell the story, they are all about the importance of education in Michigan. Get them in front of a microphone, camera, or a reporter and they will tell you it’s one of their highest priorities. Their hypocrisy on this issue is in clear display this week as they passed to bills, H.B. 4110 and H.B. 4112, which take over a quarter billion dollars out of the state School Aid Fund.

I’m not kidding:

Much of the surplus in the current budget for Michigan schools could be used to pay down the state’s projected deficit after members of the Michigan House of Representatives passed a bill Wednesday.

House Bill 4110 would use about $250.3 million from the state’s School Aid Fund to pay down a deficit in the general fund, a separate part of the state’s budget. On Wednesday, lawmakers in the House passed the bill 62-48, mostly along party lines.

The state is facing an estimated $456 million budget deficit for fiscal year 2015, which runs through the end of September. The School Aid Fund was projected to end the fiscal year with a $283.5 million surplus.

They are forced to do this because of the gigantic budget crater created by corporate tax breaks passed by Republicans in past years.

Here’s what House Rep. Adam Zemke, the Democratic vice chairman of the House Education Committee had to say about the legislation last night:

We have just finished debating HB 4110 and 4112, the bills to remove and transfer GF (general fund) funds from the School Aid Fund (SAF) and from multiple departmental budgets to the general fund to pay for the tax credits that have blown a hole in Michigan’s FY 2015 budget.

I voted nay for many reasons, but mostly because they take funds that are in the school aid fund and have been appropriated to that fund for the purposes of paying for public education, and use them to pay for tax credits that 1) should have been accounted for under the 2012 tax code changes and 2) should have been better monitored and reigned-in by the governing party long prior to today.

These are not small funding shifts – we are talking about hundreds of millions of dollars here. Simply balancing the budget by using SAF dollars and dollars from other state services are just that, the simple fix. They’re not the right fix. The right fix involves bringing tax credit recipients back to the table – the same table retirees, local governments and schools have been at over the past several years – and negotiating a deal to control these tax credits. That’s the fair and balanced solution.

Just as we have a constitutional responsibility to produce a balanced budget, we also have a constitutional responsibility to provide students with a good education. And we have a responsibility to our citizens, small businesses and local governments to share responsibility fairly. And that’s not what HB 4110 and 4112 do.

Republicans seem to think they can suck millions upon millions of dollars out of our state budget by handing out gifts in the form of tax breaks to corporations without causing problems. They also seem to think they can simply SAY they support education in Michigan and that their actions that prove otherwise won’t matter.

Neither of these things is true and they proved this week that education isn’t something they value, it’s just something they SAY they value while they eviscerate it. Do they really think we won’t notice???

Two more things: Gov. Snyder knew about this budget crater BEFORE last November’s election:

News broke today that the Snyder administration knew about the state’s massive budget shortfall last October while Gov. Rick Snyder campaigned on the premise that he had consistently balanced the budget.

During testimony to the Michigan House regarding the state’s massive deficit in the upcoming budget, MIRS News reported that an official with the Department of Treasury said the administration “became aware of the situation last fall.”

“The testimony today proves that Gov. Snyder purposefully deceived voters throughout the latter part of his reelection campaign,” said Lonnie Scott, executive director of Progress Michigan. “Snyder ran on his accounting and budgeting experience, but now we know he was actively trying to hide a half a billion dollar budget shortfall from voters. The numbers don’t lie — but Gov. Snyder sure did.”

Through that same testimony, lawmakers were told that the state’s tax liability through Michigan Economic Development Corporation MEGA tax credits is $9.38 billion, according to MIRS News, which is almost the entirety of the state’s General Fund Budget during the fiscal year. The state is on the hook for the tax credits through 2031 at varying levels, topping off at $607 million by 2029 and declining after.

In other words, Gov. Snyder. just kept it all under wraps until he had secured his reelection. To say that Michigan voters were duped is to put it far too mildly.

And, secondly, despite this self-inflicted budget disaster, Senate Republicans are still still moving forward with plans to spend up to $70 million on new office space.

That’s Michigan Republican “small government” hypocrisy in action.