Michigan lawmakers voted this week to help a handful of school districts, including Ypsilanti Community Schools, Muskegon Heights School District, and Pontiac City School District pay off their debt.
The money is part of a $615 million spending bill to supplement the Fiscal Year 2023 and 2024 budgets.
Supporters of the debt forgiveness say it makes a large stride toward removing obstacles for disadvantaged communities.
Speaking to a possible $12 million that would go toward forgiving debt for the now-defunct Inkster Schools, Senator Dayna Polehanki (D-Livonia) said.
“My constituents in Inkster need this relief, they deserve this relief, and if they choose to try to resurrect their school district, it can’t happen without remaining debt forgiveness,” Polehanki said during a floor speech ahead of voting.
The spending bill would also contribute $30 million to help put to bed the City of Highland Park’s debt to the Great Lakes Water Authority.
There had been talks of adding that into the original Fiscal Year 2024 budget, but was removed from the final version that passed earlier this year.
Senator Sarah Anthony (D-Lansing) chairs the Senate Appropriations Committee.
She says beyond the debt forgiveness, the legislation closes the books on the state’s previous fiscal year budget.
“When you get $80 billion worth of grants and programs and funds out the door, there’s a lot of technical changes and cleanups and departmental transfers that need to happen. So this, in many ways, was a traditional close of books, but also had some additional investments we wanted to make before the end of the year,” Anthony said.
On top of the $615 general government appropriation, lawmakers also approved a $29 million education spending bill.
That would revise the Fiscal Year 2023 budget to provide an extra $20 million for special education.
Both pieces of legislation largely passed along party lines.
Jeremiah Ward is a spokesperson for House Minority Leader Matt Hall (R-Richland Twp). Ward accused Democrats of working without Republicans.
“We had no input on that, spending hundreds of millions of taxpayer dollars, we already spent a record $82 billion this summer, dwindled the $9 billion surplus,” Ward said.
He also pointed to questions over whether the state’s income tax rate would rebound to 4.25% next year or stay at the current rate of 4.05%.
The lowered rate had been triggered this year by high state revenue. But ongoing litigation to work out whether that is a temporary or permanent reduction remains in court.
Ward said the math on spending more money only works out if the income tax rate jumps back up.
Supporters of the bill say lawmakers put enough money aside in the Fiscal year 2024 budget to plan for the future.
Lawmakers will hear an official update on state funds in January at the state’s next Consensus Revenue Estimating Conference.
