Forecast: Michigan tax revenues up $365 million as Snyder, lawmakers push toward budget deal

Michigan tax revenues are projected to be $365 million higher over two years than previously estimated, mostly because of economic growth — prompting key lawmakers to suggest Friday that much or all of the surplus money go toward fixing bumpy roads.

Gov. Rick Snyder's administration and legislative economists agreed to revised numbers needed to finalize the next state budget in coming weeks.

The consensus is that school aid and general fund revenues will be nearly $218 million higher in the current fiscal year than projected in January. Revenue in the state's two main accounts will be nearly $148 million more than an earlier estimate in the budget year starting in October.

It was positive news for lawmakers hoping to approve the 2015-16 spending plan by early June.

"That's a lot more than I think anybody projected or thought of coming into the last week or so. ... So I look forward to putting at least $350 million, $400 million of general fund dollars into the '16 budget for transportation," said House Appropriations Committee Chairman Al Pscholka, R-Stevensville, about a week after voters rejected a sales tax increase to trigger $1.3 billion more for roads, bridges and public transit.

His counterpart in the Senate, Appropriations Chairman Dave Hildenbrand, R-Lowell, also predicted a "significant investment" above the $3.7 billion going to the transportation budget this year.

Snyder officials appeared open to directing the additional money to transportation.

"We are not against using the money for transportation if we can continue to work on a bigger solution," budget director John Roberts said.

The Republican governor has favored fuel and registration tax increases to permanently pump at least $1.2 billion more a year into road repairs. House Speaker Kevin Cotter this week proposed a plan that relies mostly on diverting growth in the $9.7 billion general fund to roads in coming years, drawing criticism from Democrats who called it "smoke and mirrors."

Since the rejection of Proposal 1, attention in the Capitol has mostly focused on road funding. But Snyder and legislators now also must bridge significant differences over the $50 billion-plus spending plan — how to divvy up K-12 funds, whether to continue the state's film incentives program, if various business fees should be increased and the fate of Snyder's third-grade reading and other education initiatives.

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