Governor's Proposed Budget Would Hit Royal Oak Services, Schools

Michigan Gov. Rick Snyder released his heavily anticipated today to a collective gasp by community leaders, school officials and those dependent on their pensions for day-to-day living.

As part of the plan, Snyder proposes reducing state shared revenue by $92.1 million, which is income passed down from Lansing to local cities, townships and villages. The money is used to pay for routine services like police and fire. Instead he proposes including $200 million for a new incentive-based revenue sharing program available to the municipalities meeting specific standards and adopting best practices. Counties also face a $51.8 million reduction in revenue sharing.

Snyder also proposed cuts to education that amount to $300 in per pupil funding, in addition to the currently budgeted $170 per-pupil reduction. It will save the state $452.5 million.

State Rep. Jim Townsend, R-Royal Oak, said he agrees in principle that the state needs to cut spending and review tax cuts and get the economy moving again, but Townsend said the question is how does the state get there while striking the right balance between the sacrifices asked to be made and lawmakers' stated priorities, including keeping police officers on the streets and dollars in the schools.

"These things are not luxuries, these are essential to our state," he said.

Townsend said state shared revenue has received billions of dollars in cuts in the past 10 years, and it is money communities such as Royal Oak and Madison Heights are dependent upon.

"Right off the bat that will push a lot of cities over the edge or right to the edge," he said.

As part of Snyder’s plan, pensions would no longer be exempt from tax; however, social security would remain nontaxable.

Royal Oak resident Harold Lint said he does not want his pension income taxed.

Lint, 65, took an early pension from a Detroit hospital along with early social security benefits, leaving him on a tight budget.

“Why pick on the seniors all the time?” he said. Lint said if it turns out he will receive less income, his choices will be bleak.

“Then something else would have to go, either food or medication,” he said.

Another heavy-hitter outlined in the budget proposal on Thursday was the announcement that school districts would see a $300 per pupil reduction. This is in addition to the currently budgeted $170 per pupil reduction. It will save the state $452.5 million.

Royal Oak Supt. Thomas Moline is out of state on a student mission trip and unavailable for comment, but the district and school board have been preparing for this day.

During a , John Schwartz, executive director of business and personnel services, said cuts to per pupil funding were rumored to be anywhere up to $1,150 per K-12 student, or a total of $6 million for the Royal Oak school district. During the same meeting, Moline said the district’s No. 1 priority is to educate children. He also remarked that the student-to-teacher class ratio is the same as it was 10 years ago.

Snyder, who said he'd refund his pay except for $1 this year, spoke in broad terms emphasizing his priorities over specifics, calling the proposal an opportunity to reshape Michigan's future and set an example for the nation. He spoke for about 35 minutes before the joint session of the House and Senate Appropriations, finance and tax policy committees.

"This day should have happened a long time ago," said Snyder during the address that was televised live on Michigan Government Television. "We shouldn't waste an opportunity. Not doing this would be kicking the can down the road. That's not why I got elected and it's not why you got elected. A lot of us are going to have to make sacrifices.

"The reason to do this isn't to avoid the negative. It's to jump to the positive."

After the governor and Lt. Gov. Brian Calley spoke, state Budget Director John Nixon focused on education, saying a system that focuses on early childhood through higher education needs to be adopted. Specifically focusing on K-12, he said districts could avoid instructional cuts if they adopt an 80-20 employer-employee split on their health care contributions. He said that would generate $300 million in savings. In addition, if districts cut 10 percent non-instructional costs by following "best practices," it would generate another $300 million in savings.

"We feel this a very defensive plan that doesn't have to impact the classroom," he told lawmakers. "We know that's the critical area that needs to be maintained in school funding."

Hartland Patch editor Christofer Machniak contributed to this report.