Snyder, Calley talk budget, health care, skilled trades
MARQUETTE — Gov. Rick Snyder and Lt. Gov. Brian Calley had a busy day in Marquette Friday touring Invent@NMU, making an announcement on a regional economic and talent development initiative and helping Northern Michigan University mark the opening of the Behavior Education Assessment and Research Center.
The pair also took time out to talk a little about Michigan’s budget and the recently passed U.S. House bill known as the American Healthcare Act, as well as skilled trades and Snyder’s Going Pro Program.
Snyder’s 2018 budget proposal, unveiled in February, is currently moving through the Legislature. Earlier this week, the state House of Representatives passed a $39.5 billion budget, which fell below Snyder’s recommendation and left about $280 million of funding not allocated. Work continues on the budget in the state Senate.
Snyder’s proposed budget — which totals $56.3 billion — includes $10.1 billion in general fund dollars, an increase of 1.75 percent in comparison to 2017.
Snyder said outside of his first year in office when “serious cuts” took place, the state’s economy has been strengthening and tax revenues have increased.
“It’s not about spending more money, it’s about smart investments,” he said. “To really invest in things that will make a difference in peoples’ lives today and in the long-term.
“So, we’ve been in investment mode over the last few years, investing in some areas that were really underinvested in,” he said.
Snyder’s proposed budget includes an increase of $36.6 million for universities in the state, which, if approved, would bring the institutions back to pre-2011 levels. The budget proposal also calls for investments for infrastructure improvements in the state as well as hiring more state police troopers, which would return enlisted police personnel to its highest level since 2003.
One obstacle that could arise between Legislature and Gov. Snyder is how to deal with pension liabilities in the state. Republican lawmakers have pushed to close Michigan’s hybrid pension/401(k) system to new school employees. A bid from Republican lawmakers late last year failed.
Snyder said Friday large reforms were made to the Michigan Public School Employees Retirement System in 2012.
“We did reforms back then in terms of going to a hybrid plan for new employees, revising the post-retiree medical piece of that,” he said. “We introduced a payment plan that would essentially pay off the liability in 2038. So, we’ve done good things. I’m partners with people in the Legislature and they have ideas they want to put forward and we’re just in that phase of having discussions about it.”
Calley added that it’s become common to require substantial payments to retire the liability.
“These days it’s very much engrained in the budget process that you can’t put off or ignore the liabilities. It’s important that we make provisions and that we have a plan to pay them off,” he said.
Included in Snyder’s budget is a recommendation to lower the assumed rate of investment return for the state’s retirement systems from 8 percent to 7.5 percent.
In terms of the new health care bill passed by the U.S. House this week, Snyder said he has a few concerns.
“So, if you take a step back and look at the Affordable Care Act, it had significant problems with it, particularly on the insurance portion,” Snyder said, adding that many cases are having a much more negative impact on other states beyond Michigan, but it is “starting to show up in Michigan.”
The current version of the bill, he said, is meant to address some of those cases.
“But I have a number of concerns with it, including how it affects Healthy Michigan,” he said. “So one of the things we need to do is, as the bill goes into the Senate, work hard to communicate the values of Healthy Michigan.”
The Healthy Michigan Plan provides health care coverage for individuals who are 19-64, have income at or below 133 percent of the federal poverty level and do not qualify for or are not enrolled in Medicare.
Snyder said the bill could also impact traditional Medicaid and older Americans in the insurance market.
“So, there are at least three issues that I would like to see get addressed in the Senate,” he said. “And we’re spending time actually communicating those concerns.”
Snyder also discussed his plan to help job seekers acquire the skills necessary for jobs.
“We’re doing a lot particularly with career tech education, which gets to the professional trades, because there are a lot of good-paying jobs out there — look at this area with construction,” he said. “There’s construction going on all over, so there are many openings.”
Part of Snyder’s budget recommendation includes a $40.9 million investment in the Going Pro Program — a 32 percent increase from the last year.
“Particularly if you have people losing positions, like the (Empire) Mine situation, or young people coming out of school, we want to help them close the skills gap,” he said.
Snyder said there are a few ways to help job seekers.
“A few years ago we did the (Community College Skilled Trades Equipment Program),” he said, which puts equipment in place that students can learn to work on.
“They get trained on it and they walk right into a job because they partnered with private sector in determining which equipment they should have,” he said.
The Going Pro Program is aimed at helping both promote professional trades and also assisting companies with financial resources to do additional training or re-training to create career opportunities, he said.