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Gov. Snyder: Road-funding deal can't jeopardize fiscal responsibility, important programs

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LANSING, Michigan — Gov. said Thursday he will not support any road-funding plan that threatens the state's future budget outlook by redirecting too much in existing funds toward transportation infrastructure.

"I'm not willing to have a solution for transportation that jeopardizes other key achievements or good things we're doing or fiscal responsibility for the state for the long term," Snyder told reporters after what he called a "very productive" 35-minute meeting at the Capitol with legislative leaders.

The House adjourned Thursday without a $1.2 billion road-improvement deal, again raising doubts about whether the GOP-controlled Legislature and Snyder can reach an agreement.

Snyder leaves Friday for a trade trip to China. Lt. Gov. will hold more talks with House and Senate leaders next week.

GOP legislative leaders want to shift $600 million in existing income taxes in the $9.9 billion general fund to roads. An additional $600 million for roads would come from increased fuel and vehicle registration taxes — possibly a 5-cents-a-gallon gas tax hike and future inflationary increases.

Snyder is concerned with cutting $600 million in general funds but might get on board if legislators agree to revisit Michigan's health insurance claims tax, which helps pay for Medicaid. Revenue from the tax is $180 million short this year and is projected to be another $140 million short in the coming budget — effectively squeezing the general fund.

The tax will expire at the end of 2017 unless lawmakers act, and there is concern the federal government will no longer allow a related Medicaid tax at the end of 2016.

Removing or extending a sunset provision so the insurance tax continues to be collected "takes pressure off the general fund" that is being eyed for extra road spending, Snyder said.

Republican Senate Majority Leader Arlan Meekhof said there is no consensus on the mix of existing revenues and tax hikes to smooth bumpy roads.

"We're just talking about how we can work together to get it done. So we're not even on the details yet," he said. Asked if any progress had been made since Wednesday, he said: "We met."

Voters in May defeated a sales tax increase that would have triggered more money for roads, education and municipalities. Both chambers responded with different plans in June and July. The House and Senate will return to session after Labor Day in nearly three weeks.

"There are a number of moving parts, but it was a good, constructive conversation," said House Minority Leader Tim Greimel, a Democrat.


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