Gov. Gretchen Whitmer signed the state’s $62.75 billion budget for next fiscal year Wednesday, wrapping up a condensed and undramatic budget cycle overshadowed by the COVID-19 pandemic.
Under the new budget, which will go into effect Oct. 1, Michigan’s education budget 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.
“We developed a budget amidst a global pandemic, amidst all of these challenges, and it is a budget that will move Michigan forward,” Whitmer said in a Wednesday afternoon press call. “And it was robustly supported in a bipartisan way, which in this current political climate is quite a feat.”
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 the need for drastic cuts. K-12 spending increased slightly, with the budget including a one-time $65 per-pupil increase.
It could have been a 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.
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In addition to the one-time per-pupil increase, the education budget includes funding for special education spending, at-risk students and mental health funding, as well as money for teacher hazard pay and incentives for first-year teachers to stay in Michigan.
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, $28.7 million for the Going Pro initiative to help businesses recruit students, $12.6 million for the Healthy Moms, Healthy Babies program assisting pregnant women and $15 million for the state’s Pure Michigan campaign. The budget also includes $14.3 million for funding expanded access to broadband internet around the state.
The plan trimmed about $250 million from the budget overall, including savings from a planned closure of the Detroit Reentry Center run by the Michigan Department of Corrections.
Funding for universities and community colleges will remain at the same levels as the previous fiscal year under the deal.
Jeff Donofrio, Director of the Department of Labor and Economic Opportunity, said when the budget process began, “I think many of us had little hope that we’d be able to talk about investing in anything other than cuts.”
“Not only do we have a balanced budget, but we found a way to invest in the future of our economy,” he said.
Unlike previous budget cycles, negotiations were conducted almost completely behind closed doors, and lawmakers skipped the typical process of offering up separate House and Senate budget proposals.
Instead, legislative leaders and the Whitmer administration reached an agreement on the framework in advance and only released the details publicly on the same day the plan passed both chambers.
“This was not an easy process for anyone,” Whitmer said. “COVID-19 created many challenges for us this year. And those challenges made for a very unique budget development process.”
The process itself was nearly a complete 180 from how last year’s budget cycle played out. In 2019, the Whitmer administration and Republican legislative leaders publicly argued over how best to spend state tax dollars for months, culminating in a standoff that dragged into December.
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