State Sen. Jim Stamas (R-Midland), Feb. 9, 2022 | Laina G. Stebbins
Gov. Gretchen Whitmer’s $74.1 billion budget proposal for Fiscal Year (FY) 2023, which prompted a “damn” from Senate Appropriations Chair Jim Stamas (R-Midland) upon its rollout Wednesday, is receiving predictably split reviews from state lawmakers on each side of the aisle.
The Democratic governor’s fourth executive budget proposal taps record tax revenue and billions still left unspent in federal dollars for COVID-19 and infrastructure. It also boasts the highest increase in education funding in decades. FY 2023 starts Oct. 1.
“The budget I put forward today … makes strong investments in the kitchen-table issues that make a real difference in people’s lives,” Whitmer said in a statement, highlighting the tax cuts that she first announced in her State of the State address last month.
But while Democratic lawmakers say the plan responsibly takes advantage of the state’s influx of funds to offer strategic, much-needed funding boosts, many Republicans say the big-dollar budget proposal is too much, too fast.
“I got here in 2009 with a budget of $48 billion and this is $74 billion,” Stamas said. “All I gotta say is, damn.”
However, the GOP-led Legislature passed a bigger FY 2022 budget than what Whitmer recommended last year. Her proposal was for $67 billion, but lawmakers and Whitmer seized on federal COVID-19 relief funds to up the final price tag to nearly $71 billion.
After Budget Director Chris Harkins’ budget presentation to members of the state Legislature, House Appropriations Chair Thomas Albert (R-Lowell) said there are “sharp differences” between Whitmer’s proposal and what the state House is working on.
“Now we know what the governor would do if she won the lottery — she’d go on a spending spree,” Albert said. He noted that tax relief and more balanced spending over time should have been prioritized, but he is looking forward to working toward a compromise.
“If you increase the budget by billions of dollars, you’re gonna do something good at some point in time. So, there’s [good] things there,” Albert told reporters. “We’ve come together in the past. I’m confident we will in the future. So I think we have a lot of opportunities going forward.”
The state Senate last month passed legislation that would provide $2.3 billion of tax cuts by decreasing the corporate income tax rate from 6% to 3.9% and the individual income tax rate from 4.25% to 3.9%. It would also provide a $500 per-child tax credit.
State Sen. Jim Runestad (R-White Lake) criticized Whitmer’s spending proposal at length following the presentation. He said the budget contains a lot of “feel-good” items that likely appeal to many of Whitmer’s voting demographics, but he is concerned that the big spending is not warranted.
“This should be a thoughtful budget in terms of what are the long-term, decade over decade costs that we’re going to have,” Runestad said. “They’re going to have to be dealt with in a systemic way, not gushing and splashing the money all over the place now.
“‘Because we have it, let’s spend, spend, spend it.’ That’s what I’m seeing.”
Concerned about inflation and the potential of increased interest rates, Runestad also noted that he would have liked Whitmer to propose more money toward the state’s rainy day fund.
“I think we have to be prepared for a downturn,” he said, rather than take such advantage of the current influx of cash.
But Senate Minority Leader Jim Ananich (D-Flint) said Whitmer’s proposal is proof that Michigan is emerging from the pandemic in a “strong position.”
“Governor Whitmer is wise to propose that we make the most of our healthy economic standing by making smart investments in our people and infrastructure, while also building up our savings account so we’re ready for the unexpected,” Ananich said in a statement.
“We have a major opportunity before us to give our state a boost; now it’s up to the Legislature to make good on our promises to our constituents and come together on a final budget that works for families.”
Similarly, House Minority Leader Donna Lasinski (D-Scio Twp.) said the proposal makes for a historic and “balanced” budget.
“This budget proposal refuels Michigan to combat the hardships of the pandemic economy while also making direct investment to build up our state as a destination for workers and families,” Lasinski said.
In addition to a 5% increase for per-pupil funding and a $2.3 billion educator retention plan, Whitmer also proposes an infrastructure boost of $1 billion for transportation, money for lead line replacements and more.
State Rep. Joe Tate (D-Detroit) said the money is a step closer to “rebuilding and reversing the decades of neglect that plague our infrastructure.”
On the education front, state Rep. Regina Weiss (D-Oak Park) said last year’s historic investments in education need to be built upon.
“Through doubling down on our investment in students and addressing the teacher shortage in Michigan, the governor’s budget uplifts our students and educators by making sure they have the tools they need to succeed,” Weiss said.
Daniel Hurley, CEO of the Michigan Association of State Universities, said the boosts for universities would be “much-needed.”
According to Hurley, funding for public universities in the state has been cut by $1 billion since 2002 when adjusted for inflation.
“Michigan’s public university leaders are particularly pleased to see for the first time since 2000 a specific investment for campus improvements and facility maintenance that will assist with much needed upgrades to buildings, water systems, specialized technology, electrical and data networks, and more,” Hurley said..
Also supportive of the plan are the Michigan Health and Hospital Association (MHA), Michigan League for Public Policy (MLPP), AFT Michigan, the Michigan Association of Counties (MAC) and more.
MLPP President and CEO Monique Stanton applauded Whitmer’s proposals to increase the state’s Earned Income Tax Credit (EITC), increase cash assistance payments, boost education funding and more measures that Stanton said line up with the MLPP’s policy priorities.
Jeff Donofrio, president and CEO of Business Leaders of Michigan, said the group welcomes “key elements” of the budget.
“Michigan must use one-term dollars and surpluses in a way that will help improve our education system over the long-term, make us more competitive for job growth, and help Michigan dress get the skills and training they need to become more prosperous,” Donofrio said.
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