Governor Gretchen Whitmer’s budget proposal is now on the table, with a record-setting $74 billion in revenue to work with. The governor called calling for money for schools, for roads, even some tax cuts.
Bad times led to big money for the state of Michigan as sales and income tax windfalls, combined with federal COVID-19 recovery funds, dropped billions of dollars into the treasury.
And that is a lot of money, marveled Senate Appropriations Committee Chair Jim Stamas.
“This is $74 billion. All I've got to say is, damn,” quipped Stamas, a Republican.
It is not only a lot of money; it’s also very good news following two years of COVID-19 and hopes of some return to life resembling what it was before the pandemic.
It was up to the governor’s budget director, Christopher Harkins, to deliver the news to a joint meeting of the House and Senate appropriations committees on Wednesday.
“It is truly an honor for me to be here today to present the governor’s budget recommendation,” said Harkins, who formerly led the state Senate Fiscal Agency.
The budget he outlined offers something to please almost everyone.
There is more money for roads, bridges, and water infrastructure. More money for colleges and universities, and more money for K-through-12 schools.
Harkins said education is the biggest priority — not just per-student funding, which would also set a record. But, also incentives to keep teachers and other school personnel from leaving, despite the stresses created by the pandemic.
“In order to ensure that our students are successful, we need to ensure that our teachers and support staff and administrators are successful,” he said. “This budget recommends an additional $1.6 billion to retain our valued educators.”
Harkins said the plan is to offer bonuses of two thousand dollars per year for at least the first two years to keep educators from leaving, as well as incentives to bring more teachers into the profession.
The plan also includes tax breaks, such as an expansion of the earned income credit for low-income households and a rollback of a state tax on pensions.
Republicans have their own tax cut ideas that are not in the governor’s proposal. Republican leaders — including House Appropriations Committee Chair Thomas Albert — are looking to provide some across-the-board income and business tax breaks.
“All of these inflationary pressures that we’re having, that’s impacting family budgets, and your working class folks, they’re the ones who are paying, who are seeing — that’s where all this excess state revenue is coming from,” he said after the hearing. “We want to make sure we bring them some tax relief to offset all of the new costs that they’re having.”
Governor Whitmer was not at the budget rollout. Instead, she traveled to Grand Ledge High School to deliver her first public pitch for her record-setting spending plan.
“Now we are in a position where we have an opportunity to make investments,” she said. “We have to be strategic about it.”
And the choice of a high school, to announce record school spending, was also strategic. The Democratic governor not only has to bargain with Republican majorities to get this budget adopted by the October first deadline. She also has to do it as she campaigns for reelection.
