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 Added on July 29, 2024  Sara Swanson

Whitmer signs record $83B Michigan budget. What to know

by Jordyn Hermani  (Bridge Michigan)

LANSING — Michigan Gov. Gretchen Whitmer on Wednesday signed the second part of a record $82.5 billion state budget for next year, which includes new money for housing, free community college and more

In a statement released shortly after she signed a $59 billion general government budget bill in Detroit, Whitmer called it a plan that prioritizes public safety, infrastructure, and Michigan workers without raising taxes by a dime.”

The second-term Democrat on Tuesday signed a separate $23 billion education budget, which she hailed as delivering “on so many of the goals and policies I proposed.”

Not everyone was as enthused, however, with many Republicans panning the budget for reducing dedicated funding for school safety and mental health but funding pet projects in Democratic areas.

The spending plan, developed with fellow Democrats in the Michigan Legislature, tops the $81.7 billion budget the governor signed last year amid a flood of federal pandemic relief and stimulus funds.

It also tops the $77 billion budget Whitmer signed in 2022 and is 45% larger than the $57 billion version former Gov. Rick Snyder signed in his last year.

As the dust settles on another budget cycle, here what did and didn’t make the cut.

More housing on the horizon

The new budget sets aside $100 million to construct more affordable housing in Michigan, with another $3.3 million going toward the Housing Readiness Incentive Grant Program.

The effort is focused on providing grants to local communities to cover the costs associated with master plan updates and zoning amendments — as well as other actions to encourage increasing housing supply and affordability.

Another $5 million within the budget will go toward helping low-income households make energy improvements to their homes, with the goal of improving energy efficiency and reducing utility costs.

School safety and mental health funding backslides

Among the more contentious parts of the budget: A decrease in dedicated funding for school safety and mental health supports, from $328 million in the current fiscal year to $26.5 million in the upcoming one.

Whitmer has touted other parts of the education budget, saying it includes separate new pots of money that districts can choose to spend on mental health and school safety, including a combined $500 million in state reimbursements for retirement fund contributions.

But educators have voiced concerns about the cut in dedicated funding, including state State Superintendent Michael Rice.

“This reduction will slow Michigan recent momentum in addressing student mental health challenges,” Rice said in a Tuesday statement. The roughly $300 million cut “fails to recognize the physical and mental health needs of our students.”

Republicans, who largely opposed the budget, have also seized on the cuts.

“We can only pray that this budget does not leave a child without a professional to talk to when they need one most,” state Rep. Ken Borton, R-Gaylord, said in a Tuesday statement.

Free community college

As part of the $23 billion education budget signed Tuesday, Whitmer followed through on her goal of creating a Community College Guarantee — a combination of state and federal aid to make local community college tuition-free for recent high school graduates.

The new budget eliminates income caps that had restricted access to free community college and raises the yearly amount some students can receive.  Beyond tuition, the state will also cover some additional expenses for students who qualify for a federal Pell Grant.

 Lawmakers dump proposed trash fee hike

Republicans and business groups raised concerns earlier this year when Whitmer proposed raising Michigan “tipping fee” — or the cost of dumping trash in landfills — from 36 cents a ton to $5.

The hike would have brought Michigan more in line with regional fees, and Whitmer promoted it as a way to stop neighbors from treating the state like a dumping ground.

But those opposed believed the costs would be passed on to Michigan residents and businesses, with Midland Republican state Rep. Bill G. Schuette telling Bridge the administration wasn’t looking to “solve a problem” but instead raise “revenue on the backs of Michigan residents.”

That tipping fee change ultimately did not make it into the final budget deal, which the Legislature passed in late June.

Civil right expansion backlog bucks

In an effort to help the Michigan Department of Civil Rights get through its reported backlog of complaints, the budget will earmark an additional $2 million in spending for the agency.

The budget additionally adds stipulations for the money aimed at improving the investigation process.

A state audit released last year concluded the department took an average of 19 months to resolve complaints of alleged discrimination, far exceeding its half-year turnaround goal and leading to delays in 62% of cases.

Did someone say pork?

As with many recent budgets, the new one has some pork: As passed by the Legislature, it had about $411 million-worth of earmarks for individual projects in lawmakers’ districts.

That included around $336 million in “enhancement grants,” along with another nearly $75 million set aside for “critical infrastructure projects.”

Among them: $10 million for a youth sports complex in Frankenmuth, $10 million for Lansing Potter Park Zoo, $2.5 million for an indoor sports facility in Shelby Township and $2 million for Detroit Downtown Boxing Gym.

Whitmer reportedly vetoed about $9 million of the earmarks, including $3 million for a Muskegon housing project, $3 million in ethanol rebates for gas stations and $425,00 for a Bridgeport gun range.

The education budget  Whitmer signed included around $67 million for specific projects like athletic fields in Detroit, as well as new schools in Taylor and near Flint.

Craig Thiel, research director for the Citizens Research Council of Michigan, criticized the lack of transparency that went into awarding these project dollars when speaking to Bridge Michigan earlier this month.

“These may well be needy projects, and they may well serve a public purpose,” he said, “but we don’t know that because they didn’t go through any of the scrutiny” typically required for government contracts.

Expanded — but not universal — pre-K

Michigan will expand access to the state free preschool program for 4-year-olds under the budget signed Wednesday, but the Great Start Readiness program will not be open to all, as Whitmer had proposed.

Under the final deal, a family will qualify for a free preschool spot if they are at or below 400% of the federal poverty line. Using 2024 federal poverty guidelines, a family of four with an income of up to $124,800 could qualify.

While applauded by many, some — such as the conservative-leaning Mackinac Center for Public Policy — have panned the move as subsidizing preschool for affluent families.

An estimated 5,000 kids would benefit from the expansion — down from the 6,800 who would have benefited from Whitmer’s proposal for universal pre-K, according to an analysis by the nonpartisan House Fiscal Agency.

Electric vehicle rebates die out

Michigan lawmakers hit the brakes on Whitmer proposed $25 million vehicle purchase rebates program, which would have provided larger rebates for hybrid and electric vehicles.

It marks the third year in a row the governor has proposed a rebate or tax break to encourage electric vehicle sales, but past efforts did not gain traction and never received needed funding.

Free school meals continue

Michigan school children will continue to receive free breakfasts and lunches under a continuation of funding from the 2023-24 state budget. Another $40 million has been earmarked for a reserved fund to pay for the program.

And some economic development, too

The budget retains a $500 million deposit into the Michigan Strategic Outreach and Reserve Fund, otherwise known as SOAR, but a Democratic push to expand and extend the program stalled last month.

The fund aims to attract businesses in certain sectors — such as semiconductor creation and clean energy — but has proven controversial because promised jobs have been slow to materialize.

The budget also includes:

• $60 million for an Innovation Fund, with a goal of investing in startups and launching Michigan-based companies
• $10 million for Minority-Owned Business grants to continue the work of the Inclusive Entrepreneurship Support Grant program
• $15 million to the Pure Michigan campaign — on top of a $15 million earmark in existing General Fund money for the program — to further attract tourists