Governor Whitmer presented a historic $74.1 billion budget early this month with funding increases across every department and budget area for the 2022-23 fiscal year.
The massive size of the budget, which now needs approval from the Republican-led Legislature, comes from $5.8 billion in surplus revenue, most of which is expected to be a one-time surplus. The amount comes from both federal funds directed to states as a response to the coronavirus pandemic, and higher-than-anticipated state income and sales tax revenue.
The administration said that the enormous budget could be transformational in many areas, setting a generational foundation for Michigan’s present and future. Some of the major proposals include addressing the teacher shortage with $1.5 billion in retention bonuses; fixing infrastructure, adding $500 million to attract large corporations and fund a new Office of Rural Development; and $13.1 million for the Department of Attorney General and Unemployment Insurance Agency to investigate and prosecute fraud, plus $75 million to replace its computer system.
Of the $74.1 billion, $14.3 billion is General Fund – this is a hefty 21.6% increase in the General Fund compared to the 2021-22 fiscal year.
The budget plan also includes a $51.8 million deposit to the state’s “rainy day fund,” bringing the total fund to about $1.5 billion.
Governor Whitmer’s budget also includes an unprecedented 8.1% increase in the K-12 school aid budget. The proposal includes a 5% increase in per pupil funding, bringing the foundation grant to $9,135 per pupil, and $600 million for teacher recruitment.
Additionally, the budget allows follows through on commitments Governor Whitmer made at the State of the State address, including tripling the Earned Income Tax Credit for low-income workers.
Some criticized the budget, comparing it to a spending spree, but others applauded the governor commenting that the one-time investments will be used in the areas of highest need. The Republican-led Legislature will now work to send a budget to the governor, as well as negotiate the policies the budget includes viruses the priorities of the majority leaders in the legislature.
For more information, contact Andy Johnston at Andy@grandrapids.org.
