Michigan lawmakers make progress on state budget; only a few bills still need approval

Michigan lawmakers close to finishing state budget

LANSING, Mich. — Michigan lawmakers moved toward wrapping up the next state budget on Wednesday, without tax increases and with spending cuts in most state departments.

The Legislature was on pace to meet its budget-balancing deadline that coincides with the start of the new fiscal year Friday. Lawmakers missed similar deadlines in 2007 and 2009.

The Democratic-run House passed budgets Wednesday that will allow Michigan to get federal matching money for road construction and to fund the state’s Department of Human Services. The Republican-led Senate was expected to take up those budgets later in the day.

Lawmakers are working to erase a projected $484 million deficit in the next budget. The deficit would have been far larger if it weren’t for extra federal help.

The latest boosts came with the announcement in August that Michigan would get an additional $380 million for Medicaid and more than $300 million for schools. Lawmakers were debating how to distribute the schools money to districts on Wednesday.

Legislators also are using one-time accounting changes, including a tax amnesty plan expected to raise roughly $60 million, to make cuts in other areas less severe.

The most significant long-term change — a retirement incentive package for state employees — could save the state $80 million in its first year, but portions of it might be challenged in court by state employee unions once it becomes law. Unions aren’t happy that employees will be required to pay 3 percent of their salaries into retiree health funds for three years.