Commentary

Column: It’s time to build a budget that helps Michigan work for all residents

June 1, 2022 7:19 am

Kevin Moloney/Getty Images

The state’s budget isn’t just a ledger of revenues and expenditures — it is a statement of our state’s priorities. What policymakers choose to spend our state’s resources on each year shows Michigan residents what we as a state value. And these funding priorities have significant power.

Budget decisions have the opportunity to reduce and eliminate barriers to education, health care access and workforce training, among others. Budget decisions can, conversely, perpetuate or even deepen existing disparities and worsen outcomes, disproportionately experienced by our Black and Brown communities. 

Policymakers currently have a defining opportunity to create a forward-looking budget for Michigan that works for all of its residents. During the recent Revenue Estimating Conference, state fiscal experts determined that state revenues were coming in stronger than originally anticipated in January. These projections will kick off final negotiations between the House, Senate and Gov. Gretchen Whitmer administration, during which they will set funding for departmental budgets and negotiate priorities with a goal of passing a budget before July 1. 

Fiscal leaders project $5B more in state revenue after ‘difficult deliberations’

However, the state needs to make smart decisions for this increased revenue. Instead of significant, broad tax cuts that put federal aid and future budgets in jeopardy, Michigan policymakers should prioritize tax policies that are targeted to those most in need and investments that tackle the state’s most pressing needs.

Increasing Michigan’s Earned Income Tax Credit is one area of common ground amid disputes among policymakers. Sen. Wayne Schmidt (R-Traverse City) has proposed boosting the credit to 30% of the federal credit, the governor’s proposal being restoration at 20%, and tax legislation passed recently included a 20% credit.

Expanding the credit would provide a much-needed boost to working families’ pocketbooks and allow them to help make ends meet, such as paying utility bills, buying groceries, or paying for childcare or an automobile repair.

These are dollars that will recirculate throughout our local economies, as families tend to use them in the communities in which they live. While negotiations are ongoing, policymakers clearly recognize that the EITC benefits kids, workers and businesses in every part of the state. The League and our partners around the state are asking folks to urge their lawmakers to support a boost to the credit here. 

We’ve seen firsthand the impact COVID-19 has had on our students, including deepening disparities that already existed due to systemic barriers and a history of disinvestment in education. Legislatively-passed budget bills include increases in the per-pupil foundation allowance allocation, increased funding for students with disabilities, as well as some additional support for student mental health services. However, more must be done.

A recent study by the Education Policy Innovation Collaboration at Michigan State University found that kids who had been underserved by school funding policies before COVID, including Black, brown, and economically disadvantaged students, were the ones whose learning was most negatively impacted by the pandemic, increasing educational disparities. Notably absent from budgets passed by the legislature are full funding for the At-Risk school aid program and an increase in funding for English-language learners, which recognize that additional services are necessary for these students to access the same level of education as the rest of our services.

Also missing from budget proposals currently pending before the legislature are improvements to help families make ends meet. Michigan’s basic cash assistance program, which supports families with very low incomes, has not seen any substantial improvement in over a decade.

The governor’s budget included additional support for families with children who receive cash assistance–including a supplemental payment of $100 per child under 6 years of age and funding to allow families receiving assistance to receive 100% of their child support payments — and these should be considered in addition to the legislatively included support for the diaper assistance program.

This increased revenue gives the state a great opportunity to build on already existing budget proposals. But we must be smart about our decisions, as there are risks to our forecasts and irresponsible tax and budget decisions could put revenues and federal aid at risk.

Key budget negotiators need to understand the power these dollars can have on Michigan residents, businesses and communities and use this opportunity to build a budget that helps Michigan work for its residents.

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