Honigman Capitol Report

FY2024 Budget Passes

A 1,600 page budget with over $87 billion in state spending was revealed yesterday after 3pm and then passed by both the House and Senate within 7 hours without any changes. The end result of weeks of negotiations, the spending plan combined with the additional $6 billion in spending for the current fiscal year accounting for the most money every approved by the legislature in history. The FY2024 budget is 3% larger than last year’s and larger than initial proposals put out by the Governor, the House or the Senate. Coined the “Big Bus”, the budget received bi-partisan support in both chambers. Rep. Rachel Hood (D-Grand Rapids) called the budget “Christmas right before July” with $200 million going into the Rainy Day Fund, $450 million into a new School Aid Fund savings account and over $1 billion on hundreds of projects across the state. While the Senate didn’t get what it wanted for the Michigan Partnership Initiative and the Governor did not get more Strategic Outreach and Attractive Reserve (SOAR) Fund money than originally allocated, the budget did include a brand-new $336 million “Make It In Michigan Competitive Fund”. The fund will be used to match federal dollars to fund infrastructure, health and public safety projects.

Other notable spending includes:

Education

• $611 million to increase per-pupil funding by 5% and an additional $458 per student for a total of $9,608 per pupil
• $328 million for mental health and school safety
• $125 million for matching grants for school districts to modernize their bus fleet by switching to electric vehicles
• 5% ongoing increase for university and community college operations

• $112 million in Infrastructure, Technology, Equipment Maintenance, and Safety (ITEMS) funding to assist community colleges and universities improve facilities and campus security

Public Health & Public Safety

• $140 million to increase wages for direct care workers and other staff who assist those with disabilities and seniors
• $156.8 million to increase reimbursement rates for Medicaid services
• $171.5 million in public safety grants to communities across the state
• $34.2 million for Juvenile Justice Reform
• $30 million for cameras on Detroit freeways

Infrastructure

• $416 million for fixing the roads and building up public infrastructure
• $80 million for Michigan’s Bridge Bundling program to replace or rehabilitate more than 20 structurally deficient bridges across the state
• $1 million to begin transitioning the state’s fleet to electric vehicles
• $600 million for water infrastructure

Economic Development

• $500 million annual deposit into the SOAR Fund
• $10 million for promoting the tourism industry
• $5 million for the Michigan Defense Center to grow the defense and homeland security industry in Michigan

Looking Ahead

The completed budget culminates a frenetic first half of the year for the Michigan legislature. July and August are likely to bring a stark contrast in activity with session days scheduled only during the third week of each month. While members will likely enjoy the opportunity to recharge, we anticipate that the ambition shown by the new majority will not dissipate. For every high profile education, tax, civil rights, economic development or labor issue that has been heard so far, there are countless issues with less media profile in the queue. 

Technical policy questions related to renewable energy, water quality, cannabis industry regulation, to name a few, have been simmering while tax cuts, education, election reform, civil rights and labor issues took center stage. For those still looking to make the cut in this year’s packed policy agenda, we recommend using the summer months wisely to develop needed support in advance of the fall return to a full session schedule. When September arrives, you will be thankful you did.