Michigan Lawmakers Pass $81.7 Billion Budget Plan for 2024 with Record Surplus Allocation

Michigan Lawmakers Pass $81.7 Billion State Budget Plan for 2024

LANSING — Lawmakers in Michigan have sent an $81.7 billion state budget plan for 2024 to the desk of Democratic Governor Gretchen Whitmer. The budget, which is expected to be signed by Whitmer, aims to utilize a record surplus to address various infrastructure needs, invest in low-income housing, and combat learning loss among K-12 students caused by the pandemic. Additionally, the budget includes tax cuts and provisions to bolster state reserve funds.

Despite criticism from many Republicans who deemed the budget excessive, it received bipartisan support in both chambers. The Senate approved the $57.4 billion “omnibus” budget in a 26-10 vote, with only two Republicans voting against giving the bill immediate effect. The House also approved the bill with a vote of 61-47.

The budget details were released in conference reports on Wednesday, outlining spending plans for the fiscal year starting on October 1. The surplus, estimated at $9.2 billion in January, will largely be utilized to fund new and expanded programs. The budget also includes significant targeted and across-the-board tax cuts.

The omnibus bill for state agency funding, House Bill 4437, also includes nearly $5.4 billion in new supplemental spending for the 2023 fiscal year. This marks the first state budget developed under full Democratic control of the legislative and executive branches in 40 years.

Governor Whitmer expressed gratitude to the new leadership in the Legislature for their efforts in passing the budget. Democrats praised the budget for providing tangible opportunities to improve the lives of constituents. However, several Republicans criticized the bill for being bloated and filled with political pork. Some also argued that it did not allocate enough funds for road repairs and spread the surplus too thin.

Highlights of the budget include a 5% increase in K-12 per-pupil grants, a $160 million program to provide free meals to all students from pre-kindergarten through 12th grade, and a freeze in funding for cyber schools. The budget also includes grants for community enhancement, public safety, public infrastructure, statewide housing, and improvements to parks. Additionally, it allocates funds for the Michigan Department of Transportation, the Budget Stabilization Fund, and the Department of Health and Human Services.

Whitmer’s tax plan, which was approved earlier this year, includes reductions in taxes on retirement income and a significant boost in the state Earned Income Tax Credit. However, a cut in the personal income tax rate from 4.25% to 4.05% for the 2023 tax year, mandated by a law passed during Republican control in 2015, has caused a dispute between Republicans and Democrats. Republicans argue that the tax cut is permanent, while Democrats claim it applies for one year only, potentially leading to a legal battle.

The passage of the budget marks a significant milestone for Michigan, as it is the first time in four decades that Democrats have had full control over the legislative and executive branches.

How does the budget plan allocate funds to address infrastructure issues in the state and promote economic growth?

O includes provisions to invest in infrastructure, allocating $2.5 billion for road and bridge repairs, $250 million for water infrastructure improvements, and $512 million for broadband expansion. These investments aim to address long-standing infrastructure issues in the state and promote economic growth.

Another major focus of the budget is addressing the impact of the pandemic on education. The plan includes $1.4 billion for K-12 education to support efforts to combat learning loss and provide resources for students and educators. This includes funds for tutoring, summer school programs, and mental health services.

Additionally, the budget allocates $100 million for the MI Clean Water Plan, which aims to address water contamination issues in the state, particularly in communities like Flint that have been affected by lead contamination.

There are also provisions for low-income housing, with $800 million set aside for the Michigan Housing and Community Development Fund. This funding will be used to create affordable housing opportunities and assist with eviction prevention efforts.

While the budget plan received bipartisan support, not all lawmakers are in favor of the spending levels. Some Republicans argue that the surplus should be returned to taxpayers through additional tax cuts, while others raise concerns about the potential for inflation and increased government spending. However, the majority of lawmakers recognize the importance of investing in infrastructure, education, and housing to promote long-term economic growth and address urgent needs.

Governor Whitmer is expected to sign the budget plan into law, as it aligns with many of her priorities. The budget reflects a combination of strategic investments and tax cuts to support Michigan’s recovery from the pandemic and address longstanding challenges in the state.