7 things you should know about Michigan’s new budget
Lawmakers on Wednesday unveiled details of a 2021 state budget agreement for the first time, and by the end of the day, the deal was approved and headed to the governor’s desk.
Crafting a plan for how the state should spend taxpayer money looked a lot different this year because of the COVID-19 pandemic. Budget officials and lawmakers condensed what’s typically a months-long negotiation with multiple proposals and public committee hearings into a few weeks of closed-door negotiations, ultimately coming to an agreement on a framework in mid-September.
Under the new budget, which will go into effect Oct. 1, Michigan’s education spending for K-12 schools, community colleges and universities clocks in at about $17.65 billion, with the School Aid Fund budget coming in at roughly $15.5 billion. The general government budget includes about $45.1 billion to fund other state agencies and programs.
Notably, funding to public education and statutory revenue sharing for local governments stayed flat from last fiscal year, alleviating fears that a dip in tax revenues due to the COVID-19 pandemic would result in a need for drastic cuts.
It could have been a very different story without help from the federal government — the budget was buoyed by better-than-expected sales tax revenues and the initial wave of federal aid from the CARES Act.
For a full breakdown of the state budget, check out the nonpartisan House Fiscal Agency’s analysis of the general omnibus budget here, and the education budget here. The Senate Fiscal Agency’s analyses of the two budget bills can be found here and here.
Below are some of the key highlights of the budget, which is expected to be signed by the governor soon and take effect when the new fiscal year begins Oct. 1.
Slight increase for K-12
The budget contains a modest uptick for K-12 spending, with the state’s School Aid Fund increasing 1.4 percent from last fiscal year.
School funding in the budget includes a one-time $65 per-pupil increase for K-12 schools, and additional money is available for school districts with increasing enrollment based on a blend of pre- and post-pandemic enrollment levels.
Elsewhere in the budget, $53 million is allocated toward providing K-12 teachers hazard pay, as well as $5 million for retaining first-year teachers, $5.6 million for mental health funding, $2 million for virtual learning grants and $1 million for forgiving student lunch debt.
Wanda Cook-Robinson, superintendent of the Oakland Intermediate School District, said in a Thursday press conference that lawmakers should be making multi-year commitments to educators as they navigate new ways of teaching during and after the pandemic.
“Every educator in Michigan right now is really focusing on how we can help students recover from this unprecedented disruption to their education,” she said. “But the recovery is not going to be quick.”
Related: Michigan lawmakers poised to approve $62.8B state budget with slight increase in K-12 spending
More money for new moms
A new initiative to expand Medicaid maternal health services to thousands of new moms in Michigan was also included in the state’s Department of Health and Human Services budget.
About $12.6 million in state funding for the “Healthy Moms, Healthy Babies” initiative, proposed by Whitmer in February, would extend post-partum coverage from 60 days to 12 months after birth for moms who qualify and provide home-visiting services designed to support families.
The budget did not include expanded access to family planning services, which was initially part of Whitmer’s plan.
Related: 30,000 more Michigan women would get access to family planning in Whitmer’s budget
Pure Michigan revived
Under the budget deal, the Pure Michigan program would get $15 million in general fund money. The budget also allows for matching contributions from the tourism industry in addition to state funding.
The future of the campaign was thrown into limbo last fall when its funding was scratched in a line-item veto from Gov. Gretchen Whitmer. In Fiscal Year 2019, the program was allocated $36 million. In Fiscal Year 2020, the program didn’t get any funding and was not included in subsequent supplemental spending bills.
In February, the Whitmer administration proposed a reduced budget for Pure Michigan with options for buy-in from the tourism industry as part of the administration’s pre-COVID-19 budget plan.
Related: $15 million for Pure Michigan included in budget plan
Grants for broadband internet
The budget includes $14.3 million for the Connecting Michigan Communities grant program, which is designed to expand access to high-speed internet around the state.
Access to broadband internet service has long been an issue in Michigan, especially in rural areas and for low-income residents who are priced out of the service.
But the issue has been compounded in the era of COVID-19, when many students are being asked to learn remotely and many businesses are still asking employees to work from home.
Related: Shaky internet access across Michigan poses problems for online schooling
Community college, training costs covered
Money to educate and re-train adults in high-demand fields was also included in the next fiscal year’s budget.
In the general operating budget, the Whitmer administration and legislature agreed to fund the governor’s Michigan Reconnect proposal at $30 million to offer adults financial assistance to attend community college.
The Michigan Reconnect scholarship would cover community college tuition for adults who need to re-tool their skills.
Another $28.7 million was allocated to the Going Pro initiative, which funds employer-based grants to help employers train incoming talent. Funding for the program was vetoed in last fiscal year’s budget.
Some cuts to corrections
A number of the cuts among $250 million in budget reductions came from the Department of Corrections, including closing down a residential reentry program in Lake County, $2.5 million in administrative savings and a planned closure of the Detroit Reentry Center next year.
The $12.3 million cut to close the center earned the budget plan one of the few dissenting votes in the Michigan House from Rep. Tenisha Yancey, D-Harper Woods, who said she was disappointed in Whitmer and the legislature for not considering the potential issues closing the facility would cause the community.
“The city of Detroit has supported this governor… This is not the first time that she has not returned the favor,” she said.
Funding for road fixes
During the COVID-19 pandemic, Michigan’s traffic volumes have been at an all-time low.
Fewer people driving meant fewer people buying gas, and fuel taxes are a big component of how road repairs are funded in Michigan.
That said, the budget deal agreed upon this week fully funds the road funding plan signed into law in 2015 that diverts $600 million in income tax revenue toward fixing roads and bridges.
Local road agencies are expected to get $1.8 billion in the coming fiscal year, an increase from last fiscal year. Funding for state trunkline construction is roughly $1.3 billion, a decrease of $2.5 million.
Related: One more thing coronavirus could impact? Repairing Michigan roads
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