Gov. Gretchen Whitmer, right, presents her budget proposal to the Michigan House and Senate Appropriations Committees with Budget Director Christopher Harkins, left, on Feb. 8, 2023. (Andrew Roth/Michigan Advance)
Updated, 6:17 p.m. with additional comments and details
Seated before lawmakers on Wednesday in Lansing’s new Heritage Hall, Gov. Gretchen Whitmer offered her $79 billion Fiscal Year (FY) 2024 budget proposal on Wednesday to boost priorities in education, infrastructure and more.
In stark contrast with the projected $3 billion deficit the state was facing three years ago at the onset of the COVID-19 pandemic, Whitmer’s newest budget plans are propelled by an unprecedented $9.2 billion surplus.
That surplus includes $5.8 billion in one-time money and $3.4 billion in ongoing funds, according to fiscal experts during the Consensus Revenue Estimating Conference (CREC) last month.
The remaining surplus after Whitmer’s proposed budget would come to about $250 million. The state’s new fiscal year starts Oct. 1.
“The last four years, we’ve really put our fiscal house in order, paying down $14 billion of debt, amassing a record rainy day fund and getting our credit rating upgraded in the process,” Whitmer told reporters Wednesday.
‘That’s why we’re in a position to make investments that were long overdue.”
Whitmer also was proposing a budget plan for the first time to a Democratic-controlled Legislature. For her first term in office, Republicans were in charge of both the House and the Senate, leading to some tense budget negotiations.
For Fiscal Year (FY) 2024, Whitmer’s General Fund (GF) budget — which includes funding for public safety, higher education and state departments — is $14.8 billion. Federal dollars make up 41% of the proposed budget.
The state’s School Aid Fund (SAF) budget proposal, which primarily goes to K-12 schools, is $19 billion and includes the highest per-student funding in Michigan yet.
The budget proposal includes $614 million to support school operations through a 5% increase to the base per pupil amount, or $458 per student, for a total of $9,608 per pupil.
Whitmer said that since taking office in 2018, the per pupil funding has increased by 22%.
The proposed budget puts $200 million into the state’s rainy day fund, bringing the balance to nearly $2 billion by the end of the fiscal year. Whitmer also proposed a new rainy day fund that is solely for schools, with a $900 million proposed deposit into the School Aid Fund
Budget Director Chris Harkins, who presented the plan Wednesday alongside Whitmer, said these two state savings accounts could bring the state’s rainy day funds to nearly 9% of the GF and SAF combined revenues.
In an uncommon move, the governor brought along two outside advocates — UAW President Ray Curry and Susan Tellier, president of JetCo Packaging Solutions and a member of the Small Business Association of Michigan (SBAM) — as she did a roundtable with reporters after her budget proposal.
“The economic development investments in the governor’s budget will help businesses of all sizes across the state as we create more good jobs and drive innovation and opportunity for workers,” Tellier said.
In the coming months, legislative leaders will offer their own budget proposals before negotiating with the governor. A finalized budget is due in July, but there is no penalty if Whitmer does not sign bills by that time.
In February 2022, Whitmer recommended a $74.1 billion budget for FY 2023. After negotiations with the GOP-led Legislature, the FY 2023 budget totaled $76 billion.
Harkins said that the “strategic investments” proposed Wednesday “can leverage our state and federal resources to rejuvenate and reinvigorate our state.”
Whitmer said the budget proposal builds on criminal justice reform enacted by the Legislature over the last few years, invests in infrastructure needs, lowers medication costs, bolsters public safety, expands child care accessibility and more.
“I’m really excited to work with our Legislature to get this done,” Lt. Gov. Garlin Gilchrist said after the budget presentation Wednesday. “There is still a lot of work to do, but know that we are committed to doing it, and doing it judiciously.”
Here’s a look at the details of Whitmer’s largest budget proposal yet:
Pre-K and K-12 education
Whitmer’s FY 2024 budget plan invests a significant amount of the SAF funds to correct the state’s learning deficit caused by the pandemic and improve literacy rates in the state. This plan includes $300 million for tutoring through Whitmer’s MI Kids Back on Track program, approximately $214 per student; $30 million for new math intervention programs; and $25 million for before- and after-school programs funded through federal American Rescue Plan funding.
The SAF proposal also includes $1 million for English language learners; a $65 million increase in funding for academically at-risk, economically disadvantaged students, for a total of $812 million; and $80 million — a 12.5% increase — to expand support for special education students.
Whitmer’s proposal also allocates $94 million for literacy-related programs and activities in Detroit public schools, which is a result of the Gary B. v. Whitmer lawsuit in 2016 that was originally filed against GOP former Gov. Rick Snyder. Whitmer settled the lawsuit in May 2020 and agreed to propose legislation that would give Detroit Public Schools Community District at least $94.4 million for literacy programs, among other things.
To address school safety and students’ physical and mental health the budget proposal includes $318 million over two years to expand existing school safety grant opportunities for districts, $300 million over two years to invest into student mental health and $160 million to provide free breakfast and lunch to all Michigan public school students.
“Many students fell behind during the pandemic, and we must help them get back on a path to success,” said Michigan Education Association President Paula Herbart. “The governor’s proposed ‘MI Kids Back on Track’ tutoring program will provide one-on-one, school-based support for students who need extra help. Combined with free breakfast and lunch funding to ensure students aren’t hungry at school, this budget provides critical and specific support to help our kids achieve their full potential.”
To address the state’s leaky teacher pipeline and improve educator retainment, the governor’s budget proposal includes $25 million for the MI Future Educator Program, which provides a tuition free path for college students to become certified teachers; $50 million for student teacher stipends; $25 million for a teacher mentorship program; $15 million to fill teaching positions in rural parts of the state; and $5 million for special education training.
For Michigan’s youngest learners, Whitmer’s budget proposal lays out a plan to implement universal Preschool for all four-year-olds in Michigan by the end of Whitmer’s second term in 2026. The proposal includes $244 million for the Great State Readiness Program, $50 million to recruit and retain early childhood education teachers and $4 million to provide free books for children through the Dolly Parton Imagination Library.
Whitmer’s budget proposal for higher education includes a 4% increase for university and community college operations. The budget plan also allocates $55 million for a Student Wellness Fund to improve student wellness resources on university and community college campuses and a $30 million investment in adult literacy.
The budget plan also sets aside money to help Michiganders further their education, including $140 million to expand the Michigan Reconnect program, which provides tuition-free paths to an associate degree or skills certificate, by dropping the eligibility age from 25 to 21; $75 million for the Reconnect Bachelor’s Degree Pathway program to provide college affordability grants to students whose education was disrupted by the pandemic; and $100 million additional investment into the Michigan Achievement Scholarship, which lowers tuition costs for college students.
Michigan College Access Network Executive Director Ryan Fewins-Bliss shared his support for the governor’s programs to help Michiganders attain a degree or skills certification.
“It is vital that we re-engage these young adults and put them on a path toward college completion and greater career possibilities,” said Fewins-Bliss.
To help boost the state’s workforce, the budget plan also allocates $35 million of additional funding from ARP funding and $55 million from the FY 2024 budget for the Going Pro program to expand employer-based training grants.
Several budget recommendations address racial and economic disparities in health care, including $58 total to carry out recommendations from the Racial Disparities Task Force and $130 million in gross ongoing funds toward Medicaid health access and equity.
Funding will also go toward lowering the cost of insulin and other medications; continuing the Healthy Moms, Healthy Babies program for new moms; bolstering mental health care; and investing in frontline health workers and more.
Whitmer’s proposal also aims to expand access to health screenings and birth control by investing $6.2 million in the Medicaid Plan First! family planning program, which includes birth control at low or no cost.
“Planned Parenthood of Michigan is grateful for Gov. Whitmer’s continued commitment to advancing health equity and for tirelessly working to ensure that all Michiganders can access the sexual and reproductive health services they deserve,” said Paula Thornton Greear, Planned Parenthood of Michigan president and CEO. “At a time when reproductive rights are under attack nationwide, Michigan continues to light the way forward, providing a blueprint to other states for breaking down barriers and expanding access to essential health care.”
In addition to improvements in groundwater data collection, environmental permitting, green energy buildings and forest land management, Whitmer’s budget proposal proposes $2 million for climate and carbon sequestration, among a slate of other initiatives.
About $10 million total ($5 million GF) would go toward remediation of the state’s hundreds of orphan wells within the next five years. One-time support for restoring Michigan waterways, including projects to fund dam removals, would total $25 million.
For agriculture, Whitmer seeks funding for herd protection, emerging contaminants research and response, technology for the industry and a boost to implement the U.S. Department of Agriculture’s (USDA) “Climate Smart Farming” approach.
Invasive species are also a source of focused funding. An investment of $12 million would create an invasive species response task force to lead and accelerate efforts to address new and current invasive species in the state.
That is joined by a $64 million boost for aquatic invasive species prevention within the FY 2023 supplemental.
For outdoor access, Whitmer proposes increased support for state parks, along with programs like Nature Awaits — a $4 million program to allow every fourth-grade class in Michigan to experience the state’s park system.
Whitmer recommends an $11 gross investment to establish the Office of Community Violence Intervention services, using $6 million in general funds, to pilot community violence intervention and gun violence prevention grants. Another $2 million will expand law enforcement’s capacity to collect information and intelligence on gun crimes to prevent future gun violence.
“Let’s deliver on some common sense gun safety legislation, universal background checks, safe storage and extreme risk protection orders,” Whitmer said.
Among other proposals in this realm, Whitmer’s office seeks $7 million to equip Michigan Department of Corrections (MDOC) officers with body cameras; an ongoing $2 million boost supporting a victim support program with victim advocates assigned to each state district; and several investments providing resources to fund juvenile justice reforms enacted by Michigan’s Juvenile Justice Taskforce.
Detroit Action Executive Director Branden Snyder applauded the governor’s budget plan for investing in “priorities for all Michiganders, including infrastructure, education, food access, affordable housing, workforce development and good jobs,” but says the proposal could have gone further to support “Black, Brown and immigrant communities who have been left behind.”
“For far too long, Michigan’s economy has worked for a handful of wealthy corporations at the expense of working class communities, while pumping money into law enforcement. Millions of Michiganders across the state continue to be underserved, overlooked, and overpoliced,” Snyder said in a statement.
“This lopsided budget is an affront to working families teetering on the brink of economic instability, joblessness and homelessness. It is time for real long-term solutions that reduce economic and racial inequality in Michigan, like fully funded right to counsel for those facing evictions, reparations for overtaxed Black homeowners, violence prevention offices and crisis alternative programs.”
Whitmer, who has been campaigning on “fixing the damn roads” since 2018, included $200 million in her proposal to fix dozens of bridges across the state.
Her budget proposal also includes a significant investment into affordable housing, including $150 million for housing gap financing and affordable housing; $50 million to repair and upgrade existing homes; and $15 million to improve living conditions for migratory agricultural workers.
Whitmer also lays out a plan to invest $26 million ongoing and $200 one-time funds into lead service line replacements, as the state seeks to replace 40,000 lead lines around the state.
Republican response to Whitmer’s proposal
Now in the minority for the first time in four decades, Republicans from both chambers responded to the governor’s budget proposal, criticizing her for an “unsustainable” spending plan.
Sen. Thomas Albert (R-Lowell), who served as House Appropriations Committee chair last term, said Whitmer’s budget plan “fails taxpayers and leaves our state unprepared.”
“We should hope for the best and plan for the worst — that is the financially responsible approach with any budget. There are continuing signs of economic weakness and we do not know how much the economy might worsen in the coming months or years,” Albert said in a statement Wednesday. “We cannot carelessly overspend — especially on ongoing programs — and put the state in a precarious position where cuts to essential services might be necessary if revenues come in below expectations.”
Albert also said the governor’s budget plan needs to be considered with her tax package — which aims to increase the Earned Income Tax Credit (EITC), repeal the state’s pension tax and give Michiganders a $180 inflation stipend.
“Today the governor made clear that she expects every Michigan taxpayer to continue paying higher income taxes so she can afford the unprecedented level of spending she laid out for the new state budget. Instead of cutting taxes and putting more money in people’s paychecks, she wants to spend taxpayer money on special projects and new government programs,” said Rep. Sarah Lightner (R-Springport) in a statement Wednesday.
“The governor failed to address the state’s most pressing challenges, like paying down debt, dutifully funding pensions, and helping Michigan families cope with the pressure from inflation they face every day.”
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