By Paul Egan and Kathleen Gray

Michigan faces two unique challenges -- the Flint public health crisis and the financial meltdown at Detroit Public Schools --  that require immediate attention in the 2016-17 state budget, Gov. Rick Snyder said in a presentation to lawmakers Wednesday.

Snyder spoke at the Capitol as demonstrators chanted outside the House Appropriations Committee room, voicing their anger over the lead contamination of Flint's drinking water.

Included in Snyder's $54.9-billion proposed state budget is $195.4 million dedicated to Flint in 2017 and a proposal to take $72 million a year for 10 years from the state's tobacco settlement fund to retire Detroit Public Schools debt that is expected to hit $515 million this summer.

Last year, "we worked to develop a solution to address Michigan's crumbling roads and bridges," Snyder said in the text of his budget presentation. "Now we must solve the Flint water crisis and address the challenges at Detroit Public Schools."

The  link is that the crises either developed or worsened while the city government or school district was under control of a state-appointed emergency manager.

Beyond the two immediate challenges, Snyder said budget priorities continue to be economic growth, education, public safety and fiscal responsibility. His address highlighted continued signs of improvement in the Michigan economy overall, with more than 440,000 new private-sector jobs since he took office in 2011, improving home prices and steady declines in the state unemployment rate.

"This plan provides a balanced approach to addressing our special challenges while continuing to pay off debt, save money for the future and make needed investments in critical areas," Snyder said.

For the first time since Snyder took office, the budget does not call for an increase to the Budget Stabilization Fund, better known as the Rainy Day Fund. Snyder said the balance in that fund stands at about $611 million, up from $2.2 million when he took office.

The total budget includes federal funds. The main state funds, the general fund and the School Aid Fund are estimated to have 2017 revenues of $10.6 billion and $12.8 billion respectively.

A 'healthy future' for Flint residents

Snyder's budget message said that "clean drinking water is a necessity," and "Flint residents shouldn't have to rely on bottled water and water filters just to drink a glass of water or safely cook a meal."

The governor "is dedicated to ensuring the situation is dealt with quickly and thoroughly, so that Flint's water is safe for residents once again."

Snyder said the proposed $195.4 million for Flint is spread across several state agencies and "will be used to continue the work to provide Flint residents with immediate needs, like bottled water, water filters and replacement cartridges while also investing in longer term needs such as specialists and staff, including nurses and epidemiologists, support for health care access for Flint children, payment for testing and studies,  and the ongoing treatment of children."

The proposal for Flint includes $30 million Snyder already announced as part of a plan to credit Flint residents for part of the cost of water that has been billed to them since April 2014 but that they can't drink.

It also includes $37 million for safe-drinking-water efforts; $15 million for food and nutrition to combat lead exposure; $63 million for improving the physical, social and educational well-being of Flint children and other vulnerable residents,  and $50 million to be placed in a reserve fund for future expenses that are yet to be determined.

The proposed Flint funding for 2017 is on top of about $37.4 million in supplemental appropriations the Legislature approved for the 2015-16 fiscal year.

"Additional funds will be needed in the coming years to ensure Flint residents receive the care and services they need for a healthy future," the governor's budget statement said.

A couple dozen protesters, many wearing "Flint Lives Matter" T-shirts, gathered outside the room where Snyder was giving his presentation. They shouted chants such as: "Fix the pipes!" "No water, no peace!" and "Not enough!" referring to the amount of money Snyder was proposing for Flint.

Senate Minority Leader Jim Ananich, D-Flint, said the governor's proposals for Flint "seem to match the areas we have been stressing" -- health, education and infrastructure.

"Our challenge now is to make sure that the state delivers, and we don't take our foot off the gas," Ananich said in a news release.

Sen. Mike Kowall, R-White Lake, said the Senate has signed off on the chunk of money for Flint.

"We've looked at the numbers, and if this is what it's going to take to get good water for the people in Flint, then so be it," Kowall told the Free Press.

Lorenzo Avery Jr., 32, of Flint was one of the protesters who came from Flint to Lansing. He said said he plans to return to the Capitol for as long as it takes to remove Snyder from office.

"I'm here to be a pain in his behind," Avery said. "We want him removed. Everyone who had something to do with it should be removed, too. We're in a Third World country. Until we get him out of here, we won't stop."

The budget calls for $25 million in infrastructure funding for needs specific to Flint and $165 million to be set aside for statewide infrastructure needs in a newly created Michigan Infrastructure Fund.

Brandon Dillon, chairman of the Michigan Democratic Party, said the budget "contains no serious commitment to replace the lead pipes poisoning children and families in Flint."

A 'brighter future' for those in Detroit schools

Snyder's 10-year, $720-million plan for Detroit Public Schools includes $200 million in start-up and transition costs, including space consolidation, instructional support and investment in academic programs.

"These funds will help get the school district back on firmer financial footing and, more importantly, help ensure Detroit children are receiving a quality education, setting them on a path toward a brighter future."

Rep. Al Pscholka, R-Stevensville, said he's not sure he wants to take the DPS money out of the tobacco settlement fund. While he wouldn't specify what alternative he is looking at, Pscholka said: "I think there's a way that we can get the DPS funding in place without using the school aid, tobacco settlement or other general fund revenues."

For the broader K-12 budget, Snyder's proposal calls for $150 million in extra funding for the school foundation allowance, which he said equates to $60 to $120 per pupil.

The budget also provides for $15 million extra for career and technical training and a $2.1-million investment in science, technology, engineering and mathematics programs to encourage students to pursue those fields.

Help for colleges and universities

The Free Press reported Tuesday that Snyder wants lawmakers to pump an additional $61.2 million into Michigan's public universities, an increase designed to restore funding levels to what they were in 2010-11, the amount approved shortly before Snyder took office on Jan. 1, 2011.

Snyder's plan calls for an overall 4.3% increase, with half earmarked for across-the-board increases to all the state's universities and the other half added to performance-based funding.

Snyder called for a tuition increase cap for next year of 4.8%. That's up from last year's cap of 3.2%. If universities violate the cap, as Eastern Michigan and Oakland universities did last year, they will forfeit performance funding.

For community colleges, the budget calls for an overall funding increase of 2.9%.

Health, municipal support and cops

The budget calls for a 3.9% increase in constitutional revenue sharing with cities, villages and townships, bringing the total amount to $781.5 million.

On public safety, Snyder said an additional $9.5 million for the Michigan State Police would support a trooper school expected to produce 85 new recruits.

The budget also includes $8.5 million for an academy to graduate 350 additional corrections officers for the state prison system, which is grappling with a large number of retirements.

The state prisons budget, which comes almost exclusively from the general fund, remains at $2 billion, despite several cost-cutting initiatives, such as the privatization of prison food service.

In the area of health and human services, Snyder announced a $25.6-million plan to expand the Healthy Kids dental plan to all people younger than  21 in all Michigan counties, bringing the total number covered to just shy of 827,000.

Officials say the budget was revised in recent weeks to deal with the Flint public health crisis as the extent of health and infrastructure problems grew, along with preliminary plans to address them.

The governor wants lawmakers to approve $50 million as a supplemental appropriation for 2015-16 to operate Detroit Public Schools while his plan for other changes in the district  is working its way through the Legislature, Budget Office spokesman Kurt Weiss said.

"All of Michigan's children deserve a quality education that prepares them for future success," Snyder said in his budget message. "The financial stress currently facing the Detroit Public Schools must be resolved in order to ensure Detroit's schoolchildren have the same opportunities for success as other children in our state."

Michigan also faces a string of lawsuits and investigations as a result of the Flint lead crisis.

In April 2014, the city, while under the control of a state-appointed emergency manager, switched the source of supply from Lake Huron water supplied by the City of Detroit to Flint River water treated at the Flint's city treatment plant. Michigan Department of Environmental Quality officials have acknowledged they made a mistake when they failed to require needed corrosion-control chemicals to be added to the water.

As a result, lead leached from pipes and fixtures into the drinking water and test showed lead levels spiked in the blood of some Flint children. Although the city switched back to Detroit water in October, officials say the potential for harm continues because of damage done to Flint's water distribution infrastructure.

State and federal investigations into Flint's environmental disaster are ongoing, and the city will remain under a state of emergency until at least mid-April. The lead contamination in Flint has drawn worldwide attention.

(c)2016 the Detroit Free Press