Michigan’s $77B budget lacks tax relief but bails out pensions, offers record funding for schools

(The Center Square) – The GOP-led Michigan Legislature approved a $77 billion budget for fiscal year 2023, striking a deal with Gov. Gretchen Whitmer that left $7 billion of taxpayer money on the table.

State officials welcomed the budget. Although it doesn’t raise taxes, it also doesn’t contain tax breaks. In fact, the new budget would increase spending by about $7 billion, or 10% above the previous budget.

“This is our fourth collaboration on a fiscally-responsible budget delivers on the kitchen-table issues that matter and lowers costs for families struggling with inflation,” Whitmer said in a statement. “I am proud that the budget will grow Michigan’s economy and workforce, make record investments in every student and classroom, protect public health and public safety, expand mental health resources, and empower working families and communities.”

Highlights include:

$2.6 billion to bail out public pensions

  • $1.7 billion in K-12 and university systems.
  • $750 million for local municipalities.
  • $100 million in the Michigan State Police system.

$19.6 billion school aid fund

  • includes a record-high per-student base grant of $9,150 and $575 million to recruit and retain teachers.
  • $1.9 billion for special education, including a $246 million increase in reimbursements to help districts improve services. An additional $168 million will support school safety, and $25 million will support school resource officers. A $500 million fund will help schools consolidate buildings or improve efficiency.

Better roads:

  • A $6 billion Department of Transportation budget – up from $5.4 billion.

Safer and stronger communities:

  •  $130 million to support local law enforcement and public safety personnel, including scholarships, community policing investments, EMS training, fire department equipment, and communications tower upgrades. Revenue sharing to support local community services increases by six percent, and a one-time additional $300 million investment will support community and economic development in communities statewide. Mental and behavioral health facilities and programs receive a $625 million boost to improve services for children and adults across the state.

Family and maternal health:

  • $20 million will increase access to prenatal and postnatal care for pregnant mothers and their babies.

Other spending includes $94 million for local federal aid road and bridge construction, $75 million for blight removal statewide, $35 million for Mackinac Island upgrades, and $31 million for city and village streets.

Brian Peters, CEO of the Michigan Health & Hospital Association, applauded the news.

“Michigan lacks adequate capacity to treat patients with behavioral and mental illness and this new funding is an important and necessary step to address the shortage,” Peters said in a statement. “The investment of state funds to expand access to bachelor of science in nursing degree programs at the state’s community colleges is a significant movement towards replenishing Michigan’s healthcare talent pipeline.”

The budget includes about $1 billion in earmarked projects. Senate Majority Leader Mike Shirkey, R-Clarklake, said that Republicans aim to return billions of state revenue to Michiganders.

“A budget is a statement of priorities, and this budget prioritizes education, safe schools, road repairs, and job training,” Shirkey said in a statement. “It also sets aside a substantial sum that Republicans are ready to return to Michiganders struggling with record-high inflation and gas prices.”

The budget bills advance to Whitmer’s desk.