Gov. Gretchen Whitmer announces plans for a new state park in Flint, July 14, 2021 | Whitmer office photo
Gov. Gretchen Whitmer proposed funding increases for education, infrastructure and frontline workers Wednesday in her $74.1 billion budget proposal for Fiscal Year (FY) 2023 announced Wednesday.
“We are in a position where we have an opportunity to make investments. We have to be strategic about it. There’s a lot of one-time funding that we have access to, so we don’t want to build out things that we can’t sustain,” Whitmer said during a press conference Wednesday at Grand Ledge High School.
The budget plan is bolstered by one-time funding from federal relief funds and a better than expected state revenue during the pandemic. Last February, Whitmer recommended a $67 billion budget for FY 2022. After negotiations with the GOP-led Legislature and an influx of COVID-19 relief cash from the federal government, the FY 2022 budget totaled nearly $71 billion.
For FY 2023, Whitmer’s General Fund budget — which includes prisons, state parks, higher education, natural resources, the Michigan State Police, aid to local governments and more — is $14.3 billion. The state’s School Aid Fund budget proposal, which primarily goes to K-12 schools, is $18.8 billion. The new fiscal year begins Oct. 1, 2022.
About 41% of the proposed budget is from federal funds.
In her State of the State address last month, Whitmer announced she wanted a rollback on the tax on pension income and to triple the state Earned Income Tax Credit (EITC). Neither of these efforts can be rolled into the budget, and would have to be legislative measures passed by the Legislature. But Whitmer is accounting for the amount of revenue lost from the tax cuts in her budget plan.
Whitmer proposed phasing out the retirement income tax over four years, saying the tax cuts could save eligible Michiganders up to $1,000 a year. The plan initially qualifies those over the age of 65 and begins with a 25% tax cut, increasing by 25% each year until 2025.
Under the executive budget proposal, the EITC for working-class families would be increased from 6% to 20%. State Budget Director Christopher Harkins said this could save an estimated 750,000 families an average of $300.
“This is a fiscally responsible budget that provides the type of investments that will move Michigan forward, with very strong support for our schools and for our economy,” Harkins said. “With the added revenues available to us and the strong support we have received from the federal government, this is a unique opportunity to transform our state for years to come.”
The proposed budget puts $51.8 million into the state’s rainy day fund, bringing the balance to nearly $1.5 billion.
K-12 schools and educators would see an increase in funding under the proposed budget.
The budget proposal includes $580 million to increase per-pupil funding. That includes a $435 per pupil hike with the current minimum foundation grant of $8,700 rising to $9,135.
Efforts to retain and attract teachers is also reflected in the budget proposal, with $1.5 billion in retention bonuses, $150 million for student teacher stipends and $75 million for regional innovation grants.
Retention bonuses will support all pre-K-12 educators who stay in their school for three years. For the first and second years, educators will receive a $2,000 bonus, a $3,000 for the third year and a $4,000 bonus for the fourth year.
The budget also increases funding for improving mental health efforts in schools, with $120 million for school-based mental health professionals, $5 million to expand specialized service for children with severe mental health needs and $50 million for school safety grants.
As first reported by the Advance, Whitmer is proposing a 5% funding increase for Michigan’s 15 public universities and 28 community colleges.
The Great State Readiness Program (GSRP), which provides free preschool for income eligible 4-year-olds, would see $21 million more to increase the full -day allocation from $8,700 to $9,135 per student, a 5% increase, and $30 million to provide startup grants to GSRP programs and funding to expand existing classrooms.
The budget proposal also includes funds to give raises to some workers, including $500 million in “Hero Pay” for frontline workers, $135 million for behavioral health workers, $60 million for nursing home non-direct care workers, and $30 million from the General Fund and $20 million from federal funds for law enforcement and first responders.
“When we think about who has been under-appreciated over the last two years, it’s the hardest working men and women on our local police departments and state police and it’s the nurses who showed up day after day and put themselves at risk to take care of others,” Whitmer said.
On the environmental front, Whitmer’s FY 2023 budget proposal includes $48 million in grants to replace lead lines throughout the state, prioritizing disadvantaged communities, $40 million in one-time funding for home plumbing grants and $69 million for contaminated site clean up.
State revenue sharing, which is money for cities, villages, and townships required under the state Constitution, would be $964.6 million under Whitmer’s proposal. Municipalities would receive a 5% increase in funding and a 5% one-time payment. There is also $50 million to hold municipalities harmless for retroactive census clawback.
Whitmer also included funding increases for roads and bridges, something she campaigned on. In the proposal, there is $578 million in federal funding for the Infrastructure Investment and Jobs Act (IIJA) for roads, bridges, airports, local and intercity transit, and rail programs. Of this amount, $377.8 million is new funding for road and bridge construction. There is also $111 million in additional state restricted funding for roads and bridges.
The budget includes $240 million to modernize state parks and trails.
Whitmer’s proposal will have to make its way through the GOP-led Legislature, which will have its own set of budget proposals for the upcoming fiscal year. The Legislature is required to have legislation to the governor by July 1, but there’s no penalty if it fails to do so.
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