Michigan House passes $80.1B budget for 2024 fiscal year

Democrats leading the Michigan House pushed through this week an $80.1 billion Fiscal Year (FY) 2024 budget, topping Gov. Gretchen Whitmer’s $79 billion proposal put forward in February.

The House plan includes a $21.5 billion School Aid budget, which Democrats called “the largest investment in education in Michigan’s history,” as well as significant investments in workforce recruitment and retention, infrastructure, and public safety. In addition, $400 million would go toward local road repairs throughout the state. 

“This budget reinvests in the people of Michigan,” said House Speaker Joe Tate (D-Detroit). “The scale of the challenges we face — from crumbling infrastructure to pandemic learning loss, to high costs for parents and families — demand an aggressive response, and this budget rises to the occasion.”

But House Republicans blasted the plan.

“House Democrats’ wasteful spending ignores the priorities of the people of Michigan,” said House Minority Leader Matt Hall (R-Richland Twp.), who said the plan is instead “shoveling taxpayer dollars to unsustainable new programs, pork, and partisan pet projects instead of investing critical resources into education, infrastructure, and local law enforcement.” 

One major partisan difference concerns road funding. Majority Democrats propose a new funding formula based on each county’s population, with cities and villages potentially receiving a share of money allocated to county road commissions. 

Republicans say that would mostly benefit Detroit, Michigan’s largest city. Their amendment to increase local road funding by 50% to $600 million was rejected by Democrats. The GOP plan would have found the additional money through eliminating programs they say are unnecessary such as funding for e-bikes, speeding enforcement cameras, electric vehicle chargers and redesigning bus stops.

The Democratic-led Michigan Senate is also taking up budget bills, with differences between the various plans needing to be negotiated with leaders in the House and Whitmer.

Next week, state fiscal leaders will convene the Consensus Revenue Estimating Conference and determine what the state’s fiscal picture looks like, which could also factor into budget negotiations. During the January conference, economists said that Michigan has a historic $9.2 billion surplus.

Economists have been warning that if the U.S. defaults on its debt next month, the nation will plunge into recession and it would be destabilizing for the world economy. House Republicans have been demanding big federal budget cuts in order to agree to raise the debt ceiling and avoid default.

State has huge $9.2B surplus to help navigate a likely economic downturn

The Legislature is supposed to pass a final budget plan by July 1 under state law — the fiscal year for most K-12 schools begins — although there is no penalty for not meeting that deadline. The new state fiscal year begins Oct. 1.

The House-passed budget includes a 17% increase for the state’s preschool initiative. The Great Start Readiness Program, currently funded at just over $452 million, would see a $78 million boost, while the program’s eligibility threshold would go from 250% of federal poverty guidelines to 275%.

It also provides tutoring through the MI Kids Back on Track program, which would help students catch up following the pandemic. In all, the House plan would increase the school operations budget by 6.4% for a total of over $1.5 billion in operational funding.

“There’s no better investment than our kids,” said state Rep. Regina Weiss (D-Oak Park), chair of the Appropriations Subcommittee on School Aid and Education. “Ensuring that no student in our state goes hungry, every family has access to affordable pre-K and we are meeting the mental health care needs of our kids have always been top priorities for families in our state. I’m incredibly proud that we are finally achieving these goals.”