Whitmer proposes $80.7B budget for a ‘Michigan Guarantee’

• Whitmer budget plan for coming fiscal year clocks in at $80.7 billion 

• Budget includes spending plans for free community college, universal preschool and other Whitmer priorities

• Recommendations kick off budget negotiations with the Legislature

Gov. Gretchen Whitmer unveiled an $80.7 billion spending proposal for the state’s next budget cycle, calling for a handful of initiatives centered around a “Michigan Guarantee” of educational access and economic opportunities. 

During a presentation to the House and Senate Appropriations committees Wednesday morning, Whitmer and state budget officials laid out a spending blueprint for several of the administration priorities, including universal preschool, free community college for high school graduates, a caregiver tax credit and a rebate program for new vehicle purchases. 

The budget plan incorporates a 2.5% operational increase for K-12, community colleges and universities, as well as modest funding increases for road and bridge fixes, revenue sharing with local governments and assistance for low-income families. 

“Michigan's fiscal house is strong, and we're making investments on the dinner table issues to make people's lives more manageable and ensure every person has a path to prosperity in the state of Michigan,” Whitmer said Wednesday. 

The recommendation clocks in slightly below the $82 billion spending plan Whitmer signed last year, reflecting the fact that post-pandemic boosts of one-time federal funding and billions in tax revenue surpluses are all but dried up. 

State Budget Director Jen Flood said the budget reflects a “return to normal” that capitalizes on positive economic headwinds and relies on long-term, sustainable funding sources, as well as sets aside additional money for the state’s “rainy day” fund to bring the total to $2.2 billion.  

Republicans were less enthusiastic about the plan. House Republican Leader Matt Hall, R-Richland Township, said the governor’s priorities amount to ​​“fool’s gold programs that feel good but don’t provide real value for their tax dollars.”

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Wednesday’s presentation kicks off negotiations with the Democratic-majority Legislature on how to fund state government operations for the coming fiscal year, which begins Oct. 1. Lawmakers in recent years have aimed to get the budget done earlier than that to give schools and local governments time to plan. 

Here’s a look at some of the big-ticket items included in the governor’s budget proposal. 

Free community college

Whitmer’s plan for free community college for high school graduates would house the “Community College Guarantee” within the Michigan Achievement Scholarship, covering last dollar tuition costs for high school graduates after leveraging other available funds. 

The plan calls for an extra $1,000 for students with higher financial needs to offset other costs of attending school, including food, housing, transportation and childcare. The administration estimates the plan, once fully implemented, would save 18,000 students up to $4,820 on tuition costs. 

The budget also contains a $62 million allocation for Michigan Reconnect, an existing program for college education for adult learners. 

Community colleges and universities would see an across-the-board 2.5% funding increase for operations under the plan: an $8.9 million increase from the current fiscal year for community colleges and a $42.5 million increase for universities. 

The budget plan also suggests a $20 million increase to the Tuition Incentive Program, which provides tuition support for lower-income students, which would bring the total investment to $93.8 million. 

Universal preschool, free lunch

The proposal recommends continued expansions of the state’s Great Start Readiness Program with the ultimate goal of offering preschool to all eligible children, bringing the total investment in the program to $650 million.  

The budget also includes a $200 million investment for free lunch programs in public schools. 

A key feature of the education budget plan involves redirecting $670 million from the state’s retirement system for public school employees, citing recent payments by the state to pay down debt obligations early.   

Flood said that by freeing up money now for educational spending, “we are able to inject incredible resources that are going to benefit for decades to come.” 

Republicans were concerned about the precedent of avoiding paying down debt to fund other initiatives. Senate Minority Leader Aric Nesbitt in a statement called the plan “irresponsible.” 

Landfill cleanup, energy investments

The governor wants to raise $80 million in new revenue by increasing the tipping fee, a tax paid by landfill owners, to bring Michigan into “competitive parity with neighboring states.” 

The funds would pay for contaminated site cleanup, landfill mediation, and preparing sites for future economic development with the goal of reducing greenhouse gas emissions and increasing the lifespan of Michigan landfills.

Elsewhere in the budget, Whitmer proposed setting aside $7 million for the Michigan Public Service Commission to hire 31 new positions for implementing new clean energy laws. Those laws call for the state to be carbon neutral by 2050 and require utilities to get 100% of their energy from clean energy sources by 2040. 

Economic development

The budget plan includes $60 million for the Michigan Innovation Fund proposed by the governor in her State of the State speech, as well as $25 million for site readiness. 

Other proposed spending includes $20 million to attract business and $10 million for an “economic transition fund” to be used for the move to green energy and to cover any job losses.

Civil rights fixes

In the wake of a reported case backlog at the Michigan Department of Civil Rights, 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 19 months on average to resolve complaints of alleged discrimination, far exceeding the department’s 6-month turnaround goal and resulting in delays in 62% of cases.

Family programs 

As previously reported by Bridge, the governor’s budget recommendations also includes $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. 

Electric vehicles

Several initiatives outlined in the budget plan would increase the state’s investment in electric vehicles, including $25 million for installing new electric vehicle charging stations and $20 million for transitioning state and local heavy-duty vehicles to greener alternatives. 

Another $25 million was proposed to support a one-time Vehicle Rebate Program Whitmer has called for to offer incentives for consumers buying new vehicles, with additional incentives for buying hybrid cars or electric vehicles. 

Fixing roads and bridges

The proposal includes a $397.6 million overall increase for road and bridge repairs using state and federal funding, including $247.6 million for state and local roads and another $127.2 million for local municipalities and road commissions.

The Michigan Department of Transportation is also planning to wrap up projects included in a 2019 road bonding program authorized by the governor. 

Whitmer — who in 2019 proposed a gas tax increase that was a nonstarter in the Legislature —  acknowledged there is “a lot more work to do in this space,” but said she’s not currently proposing tax hikes.