Honigman Capitol Report
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Whitmer Announces Budget Proposal |
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Governor Gretchen Whitmer revealed a $79 billion budget proposal on Wednesday focused on investments in education, infrastructure, the environment and economic development. The proposal is up from the $76 billion spending plan signed last year, buoyed by an estimated $9 billion state surplus. Much of the surplus is linked to one-time funding due to circumstances caused by the COVID-19 pandemic. At least $1.1 billion of proposed spending would be allocated to savings accounts, $200 million for the rainy day fund and $900 million for a new school aid rainy day fund. The budget plan follows a tax deal announced last week that would give every state tax filer a onetime $180 check, expand the Earned Income Tax Credit and rollback the so-called pension tax on retirement income. |
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Education |
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Education was the big winner in Whitmer’s proposal, with several major expenditures directed to school programs. Notably, $724.4 million was proposed for literacy grants and coaches, math intervention programs, tutoring and other measures designed to address learning loss during the pandemic. In addition, a $614 million increase for basic school aid operations, $500 million for school infrastructure, $300 million to address health and safety issues in schools and $160 million to provide universal free breakfasts and lunches at K-12 public schools were included in the proposal. These expenditures are on top of the $224 million proposed to expand the Great Start Readiness Program. Whitmer also called for expanding the Great Start Readiness Program so that all 4 year olds have access to Preschool. Currently the program is available to children whose family household income is up to 250 percent of the federal poverty level. |
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Infrastructure |
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| Another focus of Whitmer’s proposed budget was drinking water improvements. Whitmer has proposed a total of $523 million to improve drinking water infrastructure throughout the state. This includes a $226 million investment to remove and replace 40,000 lead service pipes, $122.5 million for water filter distribution and faucet and plumbing replacement and $100 million to create an environmental justice cleanup fund for contaminated sites. Whitmer also wants to set aside $350 million to match federal government infrastructure grants and $200 million more for the Michigan Bridge Building initiative to replace 30 more state and local bridges. | |
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Environment |
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| The Governor is also proposing investment into the environment through promotion of electric vehicles. The proposed budget includes $170 million to support this purpose with $48.4 million of that going towards temporarily exempting the first $40,000 of the purchase price of an electric vehicle from the state’s 6 percent sales tax. The plan also includes $10 million for the state to buy new electric vehicles and another $45 million for grants to help local governments, airports and other agencies buy climate-friendly vehicles and convert existing fleets to zero-emissions. | |
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Economic Development |
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Whitmer’s proposed budget includes $500 million per year to the Strategic Outreach and Attraction Reserve (“SOAR”) Fund. The Governor wants to provide a permanent funding mechanism for the SOAR fund which is a business incentive program credited for helping with projects like the General Motors expansion into Lansing, Ford’s electric vehicle production in metro Detroit and Hemlock Semiconductor’s investment in Saginaw County. |
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