In final year, Michigan Gov. Rick Snyder checks off much of ambitious agenda

In January, following Michigan Gov. Rick Snyder’s final State of the State address, Bridge Magazine analyzed five of his goals in what was an ambitious agenda during his last year in office.

Political and business leaders told Bridge they were skeptical about what Snyder could accomplish as a term-limited leader — “iffy,” said the headline.

Seven months later, as the Legislature gears up for its fall session, Snyder has largely made good on his last-year ambitions before he leaves office in January.

In his January speech, the governor vowed to make the largest investment in public schools in more than a decade, set aside more money to fix Michigan’s crumbling roads and roll out a major talent initiative designed to fill job openings in high-demand fields. It was a heady to-do list.

Related: Five big things Michigan Gov. Rick Snyder wants done. All of them iffy.
Related: Six ways Gov. Snyder has changed how Michigan spends taxpayer dollars

But he was also a lame-duck governor in an election year when every statewide office and all 148 House and Senate seats were being contested, not exactly a recipe for legislative action, even with Lansing Republicans firmly in charge. Likewise, the state’s conservative Legislature had not shown an appetite to raise taxes or spend more state dollars despite failing roads and public schools that lag most other states.

Given the realities of term limits and that Snyder is in the final year of his term, "he’s done very well. At that point, you’re just trying to keep the ship running," said John Truscott, CEO of Lansing-based public relations firm Truscott Rossman, who was among the business leaders who spoke to Bridge in January.

“I think it comes down to leadership," Truscott said of Snyder. "He’s told people what he’s wanted to do, he’s set the example and gotten people through it."

Here’s where Snyder’s agenda stands heading into the final months of his term.

EDUCATION

Snyder’s proposal: The largest increase in per-student school funding in 15 years.

Did it happen? Yes

Michigan’s base, per-student funding level in the fiscal year that starts Oct. 1 will be more than $7,800 per student, though K-12 public school districts receive varying amounts across the state.

The school budget Snyder signed this summer will give $120 more in per-student aid to K-12 public school districts that receive the most state funding — more than $8,400 — and $240 more per student to schools that receive the base amount. That so-called “2x” funding formula has helped reduce the gap between the richest and poorest school districts in Michigan to its lowest point in years.

It’s the highest single-year increase since at least the 2002 fiscal year, when per-student state aid increased by $500 for the lowest-funded districts, according to the Senate Fiscal Agency.

Even so, critics say a continuing disparity in how Michigan’s public schools are funded creates educational inequity based on where students live.

A collaborative of education and business leaders released a study this year that says Michigan needs to spend thousands more per student than it does based on the cost of educating its most vulnerable students, including students living in poverty and those without a strong command of the English language. Districts also should receive extra funding to educate students with disabilities, according to the report.

INFRASTRUCTURE

Snyder’s proposal: More money in the 2019 budget for roads.

Did it happen? Yes

The budget adopted for the 2019 fiscal year that starts Oct. 1 includes roughly $300 million in one-time surplus revenue for roads.

It also includes more than $600 million in new revenue from increased gasoline taxes and registration fees, as well as $150 million in diverted income tax revenue to roads. Both of those were outlined in a $1.2 billion road-funding package Snyder signed into law in 2015 after a tax increase ballot proposal overwhelmingly failed among statewide voters.

The road-funding package gets half of its funding from new revenue in increases to the state’s gasoline tax and vehicle registration fees. The remaining half will be diverted to roads from the roughly $10 billion general fund by 2021.

So Snyder fulfilled this pledge as well, though the increase remains below what a Snyder-appointed commission identified is needed annually for Michigan’s infrastructure. The 21st Century Infrastructure Commission in 2016 estimated that Michigan needs to spend as much as $4 billion more per year over 20 years to maintain the state’s existing roads, water systems and other infrastructure needs, and about $2.6 billion more per year just on roads, bridges and transportation.

TALENT

Snyder’s proposal: A major talent initiative that seeks to better prepare Michigan workers for higher-paying, 21st-Century careers.

Did it happen? Yes

Snyder in February outlined the framework of his talent initiative, dubbed the “Marshall Plan for Talent” after a program to rebuild Europe after World War II. He signed the $100 million initiative in June. The initiative was backed by school districts and business groups such as Talent 2025 and the Michigan Manufacturers Association.

Snyder has made expanding Michigan’s talent pipeline a hallmark of his administration. The state’s unemployment rate (unadjusted for seasonal fluctuation in employment) was down to 4.3 percent in June, the most recent state data available, and employers — especially companies in the skilled trades — are concerned that they don’t have enough younger workers to replace those nearing retirement.

The talent plan was pitched as a way to help fill more than 800,000 jobs in such fields as information technology, health sciences and manufacturing that Snyder’s administration said are expected to open by 2024.

The plan includes funding for “career navigators” who would work with students on career preparation; scholarships and stipends for students to earn credentials in particular fields; incentives for teachers who take jobs in high-demand subjects, like career-technical education, which has seen a shortage of applicants across the state; and other tools to connect students with real-world career experience.

ENVIRONMENT

Snyder’s proposal: Protecting the Great Lakes from invasive species, including Asian carp.

Did it happen? Too soon to tell

It’s too early to say how much success Snyder’s Asian carp-blocking efforts will yield.

In March, he held a “Great Lakes Innovation Challenge,” seeking ways to prevent an Asian Carp invasion of the Great Lakes. (He awarded the top prize to Edem Tsikata, a software consultant in Massachusetts, who would use propellers to generate carp-deterring bubbles and sounds.)

Snyder has also negotiated with neighboring states to fund a $275 million draft plan to install carp-blocking barriers at Brandon Road Lock and Dam on the Des Plaines River near Joliet, Ill. Illinois entered those discussions in May, which Snyder's office has called a success. But Illinois, which has expressed concerns that new barriers would slow down cargo shipping, wants changes to the draft plan. It's unclear whether Illinois’ entry will bolster or muddle negotiations.

Fueled by a voracious appetite, bighead and silver carp can grow to 100 pounds. Scientists fear an infiltration would wreak havoc on the Great Lakes food chain and devastate fisheries.

At the time of his State of the State address, Snyder called out Washington for dragging its feet in helping the region.

“Enough is enough,” he said at the time. “If the federal government isn’t going to do it … then let’s get together as Michiganders and invest where we need to, to protect the Great Lakes.”

Since then, Snyder’s administration has been grappling with other environmental threats, most notably a group of hazardous chemicals known as PFAS — perfluoroalkyl and polyfluoroalkyl substances — commonly used in manufacturing to create nonstick and waterproofing substances. Michigan’s PFAS response is ongoing.

FISCAL RESPONSIBILITY

Snyder’s proposal: Preserving his legacy of fiscal responsibility.

Did it happen? Yes, but the year’s not over  

Snyder’s budget includes another $115 million for Michigan’s rainy-day fund, which is expected to bring the state’s reserves to more than $1 billion in the upcoming fiscal year. When Snyder took office in 2011, Michigan’s reserves were about $2 million.

Snyder, an accountant, has spent his two terms working to improve the state’s balance sheet. Aside from saving money in reserves, he has urged lawmakers to finish budgets in June — despite the fact that the state’s fiscal year doesn’t start until October — because many school districts and cities start their fiscal years in July. All eight of Snyder’s budgets have been adopted early.

His administration said it also will pay down more than $1 billion to the state’s public school retirement system, with the goal of paying off Michigan’s pension debt by 2038, Snyder spokeswoman Anna Heaton told Bridge.

Legislation signed into law last year that aims to help local governments manage their retiree pension and health care obligations has been criticized by some Republican lawmakers for not going far enough to allow the state to intervene in the event of a funding problem.

And some fiscal reforms business groups have called for, such as writing into state law the practice of multi-year budgeting and requiring fiscal notes that spell out the cost of a bill before lawmakers pass it, have not been adopted by the Legislature.

Heaton told Bridge that regardless of whether the practice is codified in statute, multi-year budgeting and finishing budgets well before the start of the new fiscal year have changed the state’s culture.

But the year isn’t over, and the GOP-majority Legislature may yet vote to roll back the state’s income tax rate, which could impact state revenues. Former Gov. Jennifer Granholm raised it from 3.9 percent to 4.35 percent during her tenure. The higher rate, expected to be temporary, instead was frozen by Snyder at 4.25 percent early in his administration.

Snyder has urged legislators throughout this term to avoid the short-term temptation of an income tax cut, given other fiscal pressures in the state general fund budget.

The House failed to pass an income tax cut in February 2017, though the bill could be reconsidered before the two-year legislative session ends this December. Gideon D’Assandro, spokesman for House Speaker Tom Leonard, said Leonard remains supportive of rolling back the income tax rate, though it remains uncertain whether there would be enough support from House lawmakers at the end of the term to pass it.

"So much depends upon the election," said Charles Ballard, an economist at Michigan State University. “I’m sure it will come to mind for some of the Republicans if they lose the governor’s race and/or lose control of one or more chambers of the Legislature."

Bridge reporters Jim Malewitz and Mike Wilkinson contributed to this report.