June 16, 2000
Governor’s Transportation Spending Plan Called Reckless
The Michigan Environmental Council (MEC) and Michigan Land Use Institute (MLUI) called on Governor Engler to veto a bill that authorizes raiding as much as $660 million from the Rainy Day Fund for road projects. The Rainy Day Fund, established in 1977 to help Michigan meet budget responsibilities during downturns in our economy and periods of high unemployment, has a current balance of $1.2 billion. The new legislation, SB 1275, authorizes removal of up to $100 million this year and $35 million a year for the next 16 years. This raid also could contribute to a downgrading of bonds issued by the State of Michigan.
This action comes on the heels of a report issued on May 22, 2000, by the Center on Budget and Policy priorities in Washington, D.C. identifying Michigan as one of the states that already has insufficient monies in its Rainy Day Fund to weather even a mild recession.
“Voters should be warned that a term-limited governor and legislators are committing Michigan to ill-advised spending obligations that will last years beyond the end of their terms,” said Lana Pollack, President of MEC. She noted that this spending plan goes 14 years beyond John Engler’s term of office.
“This reckless spending plan is especially troubling because the money would be used, in part, to widen and build major new highways while Michigan fails to maintain existing roads,” said Kelly Thayer, Transportation Project Coordinator at the Michigan Land Use Institute. “Nearly 20 percent of Michigan’s highways need immediate reconstruction and more than 55 percent have 7 or fewer years of life remaining before they will need to be torn up and rebuilt. Michigan shouldn’t build major additions to its transportation network while the foundation cracks.”
The Rainy Day Fund only allows one-year emergency spending authorization. This bill amends those triggers to allow this 16-year appropriation for a non-emergency purpose.
The Fund, officially named the Countercyclical Budget and Economic Stabilization Fund, was created to help the state weather economic downturns without having to decimate essential programs. Dedication of a portion of the Rainy Day Fund to road building could force future cuts in public schools, universities, health care, environmental protection and law enforcement.
James Clift, MEC, 517-487-9539
Dusty Fancher, MEC 517-487-9539
Kelly Thayer, MLUI, 231-882-4723