Governor Gretchen Whitmer’s administration rolled out its $83.5 billion spending blueprint for the coming fiscal year in a Wednesday presentation to state lawmakers.
“While inflation is cooling, families are still struggling with rising costs and that’s why the No. 1 focus of this budget is lowering costs,” Whitmer Budget Director Jen Flood said in her opening remarks to a joint meeting of the House and Senate appropriations committees.
The plans include more help for families with the costs of childcare and pre-K education, financial assistance for post-secondary education, and increasing the K-12 foundation allowance to $10,000 per student.
The Whitmer administration is also looking to taxes on vape pens and other nicotine delivery products and higher landfill tipping fees as sources of revenue. The aim is not strictly budget related, but to discourage vaping and to make the cost of business more expensive for out-of-state waste haulers that take advantage of Michigan’s relatively low rates.
But the budget proposal is almost silent on a source of new revenue for roads and progress on the Democratic governor’s marquee 2018 campaign promise.
That is a big missing piece, said Senator Sarah Anthony (D-Lansing), who chairs the Senate Appropriations Committee.
“Having a roads plan baked into the large budget presentation is helpful, so we can actually start getting some of these conversations and decisions,” said Anthony. “So, we’ll just love to hear more. I look forward to hearing more hopefully in the weeks to come.”
There could be more on road funding when the Democratic governor presents her State of the State address in three weeks. Flood said those discussions are already underway.
“The budget we put forward today is balanced, fiscally responsible, and we look forward to picking up conversations on road funding next week,” she said.
House Republicans, who took control of the chamber this year, have rolled out their own plan to divert spending to roads from other budget items, including business subsidies.
Flood cautioned that spending plans might have to be recalibrated based on budget actions by President Donald Trump. She said the short-lived “spending freeze” infused a dose of uncertainty into budget planning.
“There’s a lot of chaos following the orders,” she said. “The courts have weighed in and everything is on pause right now, and so we are going to continue to monitor the potential impacts.”
She said federal funds make up more than 40% of state spending, including funds for healthcare, schools, and veterans’ services.
Representative Ann Bollin (R-Brighton), who chairs the House Appropriations Committee, said many of those are worthwhile, but she thinks federal grants are not always a good bargain.
“We have seen over the years, we say yes to the federal money and while the money grows, so do the requirements,” she said. “And I don’t think necessarily that the requirements of the federal government and what works at the federal level really fits the personality of the state of Michigan in all ways.”
The next step is for the appropriations subcommittees to open hearings on budget bills with the goal of getting them adopted by the Oct. 1 start of the state’s fiscal year. Local governments, public universities, community colleges, and school districts would be pleased to see that done even sooner because their fiscal years begin on July 1.
With the House under Republican control, a Senate run by Democrats and a Democratic governor, the final budget will be made up of a host of bipartisan budget deals. This year, Whitmer endorsed public disclosure of earmarks that benefit businesses or non-profit organizations in legislators’ districts before the budget bills are put up for votes.
