Michigan lawmakers approved a retirement incentive plan for state government employees late Thursday, a key step toward finishing a government spending plan for the fiscal year that starts Oct. 1.
The retirement proposal, which could save the state around $80 million in its first year, is a large part of a plan to erase a projected $484 million deficit for next fiscal year.
The retirement plan would allow eligible state employees to retire later this year with slightly better pension benefits. Those who stay on the job would be required to pay 3 percent of their salaries into retiree health care plans for three years.
That's a compromise that helped win the support of House Republicans, though many Democrats -- who hold the majority in the House -- remained opposed to the plan because it's drawn criticism from union leaders.
The bill passed the House by a 60-45 vote and cleared the Republican-led Senate by a 20-14 vote. Senate Democrats would not support a motion to give the bill immediate effect, which could delay implementation of the plan. But lawmakers have time before next week's budget deadline to clear that procedural hurdle.
Senate Republican Majority Leader Mike Bishop and Democratic House Speaker Andy Dillon were optimistic that the rest of the budget would fall into place next week.
"Now that this is done, we can get the other (budgets) moving," Dillon said.
Earlier Thursday, Gov. Jennifer Granholm signed budget bills for community colleges, state police and other Michigan agencies.
The Legislature has not finished budgets for universities, transportation, human services and a few other departments. But lawmakers appear to be on track to finish the budget before next week's deadline, which they have failed to do in two of the past three years.
Under bills signed into law Thursday, Michigan's 28 community colleges will receive the same amount of money they now get from the state for basic operations next budget year. Although some, including Montcalm Community College and the Wayne County Community College District, will lose reimbursement payments related to special tax zones.
The next Michigan State Police budget should not result in any state trooper layoffs or post closings.
Granholm also signed budgets for the Department of Agriculture, Department of Education, the Department of Military and Veterans Affairs and the state court system.
Granholm said in a statement that the bills "protect funding for critical priorities." A few weeks ago, the governor signed a bill that should protect Michigan's public schools from budget cuts.
Michigan's economic troubles and tax policy changes have caused revenues to state government to fall for the past few years. The state has been made its budget balance, as required by the Michigan constitution, with the help of extra federal aid.