Michigan’s $83B budget deal boosts housing, scraps Whitmer’s trash fee hike

• Michigan lawmakers work through night to pass $82.5 billion spending plan
• As approved, general government budget includes $100 million for affordable housing, more money for local governments
• Deal does not include Gov. Gretchen Whitmer’s proposal to boost trash fees to pay for environmental cleanups

LANSING — Michigan’s Democratic-led Legislature worked through the night to approve an $82.5 billion state budget deal early Thursday morning, with a key lawmaker hailing the plan as a win for “every Michigander.”

Action on the budget deal negotiated by Gov. Gretchen Whitmer and legislative leaders was delayed amid debate over a controversial $23.4 billion education spending bill ultimately approved around 4:45 a.m. in party-line votes. 

A $59.1 billion general government spending bill proved only slightly less contentious, winning support from a single Republican in the state Senate. 

Related:

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The plan includes new money for affordable housing, local governments, family planning programs and staffing to help resolve a backlog of complaints in the state’s civil rights department, along with more than $330 million in earmarks for legislator pet projects. 

The budget deal — publicly unveiled for the first time past midnight — does not include a trash fee hike Whitmer had proposed to boost environmental cleanup efforts, nor a vehicle rebate program she had proposed to boost sales of electric, hybrid and traditional cars. 

With the final plan, legislators are “supporting common-sense priorities that will make a difference in the lives of Michigan residents across our entire state,” House Appropriations Chair Angela Witwer, D-Delta Township, said in a Thursday morning floor speech. 

“This budget is for the people of Michigan, because people are the reason that we are here,” she added. 

Republicans generally panned the budget deal, however, pointing to specific spending proposals that they deemed wasteful, including $2.9 million for e-bike incentives and $7.5 million for aerial drone projects.

The spending plan is “out of touch and a continuing example of unnecessary government spending,” said Rep. Donni Steele, R-Orion Township. If Michigan can fund e-bikes and drones, the state should be able to “fix the roads,” she said.

Negotiations dragged well into the night as lawmakers sought to finalize the budget before a planned summer recess and upcoming election season. Lawmakers have traditionally sought to have the budget completed by July 1, but the state constitution gives them until Oct. 1 to finalize a balanced budget. 

All told, the $82.5 billion state budget is slightly larger than the $81.7 billion version Whitmer signed last year amid a state surplus and federal pandemic funds that have since run out. 

Read more about the education portion of the budget here, and read below to see what made the final cut in the general government spending plan.

More housing

The final budget deal includes $100 million for affordable housing projects that Whitmer had not initially proposed but has generally championed as a means to addressing statewide shortages. 

Democratic legislators pushed to add the funding, which will be allocated to general housing programs and a series of specific housing initiatives, including $15 million for Ingham County support programs, $5 million for teacher housing in Traverse City and $5 million for mixed-income housing in Portage. 

Landfill cleanup fees scrapped

Whitmer’s initial budget proposal sought to raise $80 million in new revenue by increasing the trash tipping fee, a tax paid by landfill owners, to bring Michigan into “competitive parity with neighboring states.”

Michigan is home to more landfill garbage per resident than anywhere else in the country, and the Whitmer administration contends low fees have made the state a convenient dumping ground for other states and Canada.

Whitmer’s proposed fees would have funded contaminated site cleanup, landfill mediation, and preparing sites for future economic development — with the goal of reducing greenhouse gas emissions and increasing landfill lifespan.

Lawmakers ultimately ditched the proposed fee hike entirely, a win for Republicans and other opponents of the idea who argued the higher fees would lead to higher trash costs for Michigan residents and businesses. 

Rep. Rachel Hood, D-Grand Rapids, previously told Bridge Michigan she’s open to discussing a gradual landfill tipping fee increase over time if local governments also got a share of the resulting revenue. 

Boon for local governments 

Whitmer came to lawmakers asking for a boost in state revenue sharing for local governments. 

Lawmakers agreed, with the final budget deal including a $34.2 million increase in statutory revenue sharing for cities, villages and townships and $20.7 million for counties.

The deal also includes boilerplate language requiring “timely reimbursements” to local governments within 60 days after a municipality submits a reimbursement request. 

No vehicle rebates

Whitmer failed to gain support for her push to incentivize Michigan vehicle sales, especially electric vehicles.

Lawmakers rejected the governor’s $20 million proposal to help local governments, colleges and airports replace existing vehicles with electric and hydrogen versions.

They also declined to fund Whitmer’s plan to put $25 million toward incentives for consumers buying new vehicles, with bonus offerings for drivers purchasing hybrids or electric vehicles. 

This is 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.

The budget deal does include $25 million Whitmer proposed to continue to build electric vehicle charging stations and hydrogen fueling facilities. 

The plan also sets aside $2.5 million to fund 10 new full time positions for the Community and Worker Economic Transition Office, created in 2023 to help communities, workers and businesses navigate the transition from gas-powered to electric vehicles and renewable energy sources, among other things. Whitmer had asked for $5 million. 

Pork aplenty

The budget deal includes more than $334 million in legislative earmarks to fund  specific projects in lawmaker districts, which are commonly used by leadership to secure votes on the overall budget.  

Such earmarks have become increasingly common in Michigan budgets, but some past grants have proven controversial and sparked criminal investigations. 

Some of the projects funded in this year’s budget include:

• $17 million for two Michigan zoos: $10 million for Potter Park Zoo in Lansing and $7 million for the Detroit Zoo
• $1 million for a ski jump in Ironwood
• $10 million for a youth sports complex in Frankenmuth
• $1.5 million for Jimmy John’s Field in Utica and $1 million for infrastructure improvements at Lansing Lugnuts baseball stadium and $2 million for Hamtramck’s Negro League Field 
• $2 million for a boxing gym in Detroit
• $3.2 million for land acquisition in Mackinac Island 

Economic development

Whitmer’s budget plan included $60 million for the Michigan Innovation Fund she first proposed in her State of the State speech. 

The budget deal made the funds contingent on passage of legislation setting up the program and outlining guidelines for how to disburse grants. The state House did not take up that legislation before adjourning Thursday morning. 

Lawmakers did not vote on a separate $6 billion plan to extend the state’s corporate incentive program but expand it to include transit and housing. 

Civil rights boost

Lawmakers agreed to a more modest increase to the Michigan Department of Civil Rights to address a reported case backlog. 

The governor proposed an additional $5 million to fund 29 additional employees to investigate and resolve discrimination complaints. 

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.

Lawmakers and the administration ultimately agreed to the House plan, which would net the department an additional $2 million and add additional stipulations for the money aimed at improving the investigation process. 

Some funds for family planning

Whitmer proposed a total of $26.6 million in funding for family planning and maternal health services aiming for improved maternal and infant health and increased access to contraception and other reproductive health care. 

She called for $14.2 million in allocations to local health departments and agencies for family planning services, including preventative health screenings, unintended pregnancy prevention and birth planning. House and Senate budgets didn’t initially include the funding, but the budget deal landed at $5.6 million for that purpose. 

Lawmakers and the administration included $6.8 million for supporting doula services, up from Whitmer’s suggestion of $4.9 million.