Snyder’s top priorities include road funding, DPS

Mackinac Island — Gov. Rick Snyder is hoping to restart his top legislative priorities of road funding, a reorganization of Detroit Public Schools, criminal justice reform and crafting a new state energy policy following the Michigan Republican Party’s biennial leadership conference here.

Snyder hopes to get a road funding deal with lawmakers in the next few weeks so he can transition into a big push for creating a new DPS and getting the Legislature to assume the city school district’s nearly $500 million in operating debt.

“We have a busy legislative fall. It’s a significant agenda,” Snyder said in an interview with The Detroit News at the biennial Mackinac Republican Leadership Conference.

Snyder has spent the summer trying to educate legislators on the need for state taxpayers to step in and rescue DPS from debt mostly piled up during six years of emergency management.

“In many respects, the state has its credit at risk and is the backup on a reasonable amount of this debt,” Snyder said.

The Republican governor is warning lawmakers that continued inaction on DPS could lead to education chaos for Detroit school children.

“To have a free-fall financial default, whether you talk about bankruptcy or not, would not be a good thing for the students in terms of making sure they don’t have a disrupted education,” Snyder said. “Isn’t it better that we do this in some managed, structured fashion to address this in a thoughtful way?”

Some lawmakers are skeptical of Snyder’s previous plan to create a new, debt-free district that retains collective bargaining agreements with DPS teachers and support staff.

Rep. Tim Kelly, R-Saginaw Township, proposed last week eliminating DPS and giving the district’s 47,000 students $7,200 vouchers to apply toward tuition at a private school or another public school.

Michigan’s Constitution prohibits tax dollars from being used for private school education, but Kelly wants to test the legal limits of containing a vouchers program to just Detroit.

Snyder was cool to Kelly’s desire to pass a law that could be tied up in the courts for years. “Vouchers have a long history in Michigan and there’s a lot of challenges to that,” Snyder said. “I would hope to avoid litigation whenever you can.”

Before Snyder steps up the debate over the future of DPS, the governor wants to strike a long-sought deal with lawmakers to generate $1.2 billion more annually for roads after a summer of stalemate following voter defeat of a 1-cent sales tax increase for roads in May.

The Republican-controlled House and Senate have been at odds for months over how to generate the extra money for Michigan’s crumbling roads. In July, the Senate passed a 15-cent gas tax increase to generate more than $800 million in new road funding revenue.

House Republicans passed a $1 billion plan with $123 million in new revenue, mostly through raising the diesel fuel tax to match the 19-cents-per-gallon gasoline rate. The rest of the plan relied upon shifting existing general fund revenue sources to the transportation budget.

But Snyder has warned against digging too deep into the state’s $10 billion general fund because of budgetary pressures the state faces in coming years over Medicaid insurance for the poor and other social programs.

House Speaker Kevin Cotter, R-Mount Pleasant, said his members are softening their stance using existing revenue for roads after learning about the potential long-term havoc it could wreak on the general fund.

“To the extent that we create a big hole in the general fund, that’s going to create a lot of challenges and when we understand just what those cuts look like, I think that brings people around to an openness to get behind some level of new revenue,” Cotter said.

The latest road funding plan Snyder and legislative leaders from both parties have been discussing would entail $800 million in new revenue through a fuel tax increase and a hike in vehicle registration fees.

The remaining $400 million would come from existing revenue, potentially phased in over three to four years, Snyder said.

But legislative leaders emphasized there’s no final deal on how much existing revenue will redirected to roads and bridges.

“We’re going to get as much as we get the votes for,” said Senate Majority Leader Arlan Meekhof, R-West Olive.

As Snyder and GOP leaders work toward crafting a deal, conservative groups are stepping up their pressure on lawmakers who support any tax hike.

At the Michigan Republican Party’s Mackinac Island conference over the weekend, tea party activist Wes Nakagiri was passing out fliers targeting Sen. Tonya Schuitmaker, R-Lawton, for voting “six times to hike gas taxes.”

“I think there’s still a chance to derail it,” said Nakagiri, who has formed a new political group called The Gadsden Center.

Nakagiri said Snyder and Republican legislative leaders are unwilling to consider wide-ranging cuts to state agencies and programs to make roads a higher spending priority.

“It just seems like the definition of compromise is they get everything they want,” he said.

Cotter sought to downplay the political ramifications for Republicans who vote to raise taxes to fix roads.

In the 2012 election, Republicans kept control of the House after making sweeping changes to the income tax code by eliminating popular exemptions and credits for pension income, the working poor, families with children and charitable giving.

Those changes helped Republicans balance the budget and cut businesses taxes by $1.8 billion.

“I think what we’ve seen play out is that the public appreciates those who make tough decisions,” Cotter said.

clivengood@detroitnews.com

(517) 371-3660

Twitter.com/ChadLivengood