Whitmer, Republicans strike deal on $76B budget with hikes for schools, roads, more

Legislature leaves money in reserve for possible tax cuts

By: - July 1, 2022 7:19 am

Austin Blair statue in front of the Michigan Capitol, March 22, 2019 | Susan J. Demas

After spending 18 hours in session starting Thursday, the Legislature passed a $76 billion budget for Fiscal Year 2023 early Friday morning, meeting its July 1 deadline. 

Some of the big winners in the largest budget in history, which has an 8% increase from the FY 2022 $70 billion budget, include K-12 public education, retired teachers, roads and the state’s rainy day fund.

Michigan’s next budget year begins on Oct. 1. Negotiations took place against the backdrop of the upcoming election, in which the governor, the entire House and most of the Senate are on the November ballot.

Gov. Gretchen Whitmer at the Mackinac Policy Conference, June 1, 2022 | Laina G. Stebbins

Hours before the budget was finalized in the Legislature, Democratic Gov. Gretchen Whitmer announced that she and Republican leaders had “reached a deal on a balanced, bipartisan state budget … that does not raise taxes by a dime.”

The General Government budget, House Bill 5783, passed through the House with a 97-9 vote and through the Senate with a 37-0 vote. 

The School Aid budget, Senate Bill 845, passed through the House with a 99-7 vote and through the Senate with a 35-2 vote. Sens. Tom Barrett (R-Charlotte) and Jim Runestad (R-White Lake) were the lone no votes in the Senate.  

House Speaker Jason Wentworth (R-Farwell) said the Legislature had to “nail this budget plan” to meet the needs of Michiganders who have been affected by “the looming recession and inflation hitting families hard.”

“I’m glad we were all able to take our time and work together across party lines to build a real plan and move Michigan forward,” Wentworth said. “Our budget prioritizes school funding, road repairs, healthcare access, job training and even sets aside billions for tax relief. This plan has everything Michigan families need to get ahead and stay ahead in the coming year.”

Previous budget proposals struggled to garner Democratic support after Republicans injected anti-abortion language that would restrict abortion access in the state. 

Republicans also tried to include language in a previous school budget proprosal that would ban transgender athletes from participating in school sports. None of that language made it into the final legislation.  

More per-pupil funding, incentives for future teachers

The $19.6 billion School Aid budget includes increases in per-pupil funding, mental health, school safety funding and teacher retention and attraction programs.

The bill includes a $450 per pupil increase for school districts, bringing the total per-pupil allotment to $9,150, a 5.2% increase from this current fiscal year. 

The state also plans to invest more into student’s mental health and physical safety in schools with $150 million for per-pupil grants to districts to address student mental health, $168 million for school safety grants, $25 million for school resource officers and $15 million for cross-system interventions.

Special education also would see greater funding by allotting special education students the full $9,150 per-pupil amount, regardless of time spent in the general education classroom, plus 28%. The plan is to phase in the funding over two years, starting with 75% of the funding within the first year and 100% of the funding in the second year. 

The budget also prioritizes getting more teachers in the classroom and keeping them in the field with investments into retention and attraction programs. 

The budget includes $175 million for Grow-Your-Own programs for districts and intermediate school districts to implement programs providing no-cost pathways for support staff to become certified teachers, $50 million for student teacher scholarships and stipends to pay eligible student teachers $9,600 per semester for their work, $25 million for MI Future Educator Fellowship Grants that will pay tuition costs up to $10,000 per year for eligible students enrolled in eligible educator preparation programs, $20 million for Teach for America, $15 million for Troops to Teachers and $10 million for CTE Teacher recruitment and retention. 

The Legislature also deposited $280 million into the current fiscal year budget in a reserve fund for MI Future Educator Fellowship grants.

The budget includes $25 million for before- and after- school programs, and includes $52 million of federal funds in the current budget for a per-pupil grant to districts to address learning loss.

At the college level, all 15 state universities would have a new floor of $4,500 per-pupil over three years.

George Frey/Getty Images

Cities see increased funding, money left to cut taxes

In recent months, debates over tax cut plans haven’t gone smoothly between the governor and the GOP-led Legislature, and tax cuts didn’t make their way into the state budget this year. 

However, the budget does leave up to $7 billion for potential tax relief in the future. 

“There’s plenty of room for an economic downturn to cushion that blow,” said House Appropriations Committee Chair Rep. Thomas Albert (R-Lowell). “What I’m hopeful for is we can use some of those funds to provide some tax relief for Michigan families.”

Senate Majority Leader Mike Shirkey called the leftover funds a “substantial sum that Republicans are ready to return to Michiganders struggling with record-high inflation and gas prices.” 

Senate Majority Leader Mike Shirkey (R-Clarklake), April 20, 2022 | Laina G. Stebbins

The budget also includes $6 billion for roads and infrastructure and $180 million for the state’s rainy day fund. 

The General Government budget also includes $2.6 billion to support various public pension funds, including $750 million to boost underfunded municipal pension plans to boost local governments’ pension funds to a 60% funding level. 

The city with the largest allotment is Flint, with $170 million going to the city’s pension fund.

The Michigan State Police pension fund will receive $100 million, bringing it up to 80% funded. 

The bills now head to the desk of Whitmer, who is expected to sign them.

Advance reporter Kyle Davidson contributed to this story.

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Allison R. Donahue
Allison R. Donahue

Allison R. Donahue covers education, women's issues and LGBTQ issues. Previously, she was a suburbs reporter at the St. Cloud Times in St. Cloud, Minn., covering local education and government. As a graduate of Grand Valley State University, she has previous experience as a freelance researcher for USA Today and an intern with WOOD TV-8. When she is away from her desk, she spends her time going to concerts, comedy shows or getting lost on hikes in different places around the world.

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