Seated before lawmakers on Wednesday in Lansing’s new Heritage Hall, Gov. Gretchen Whitmer offered her $79 billion Fiscal Year (FY) 2024 budget proposal on Wednesday to boost priorities in education, infrastructure and more.
In stark contrast with the projected $3 billion deficit the state was facing three years ago at the onset of the COVID-19 pandemic, Whitmer’s newest budget plans are propelled by an unprecedented $9.2 billion surplus.
That surplus includes $5.8 billion in one-time money and $3.4 billion in ongoing funds, according to fiscal experts during the Consensus Revenue Estimating Conference (CREC) last month.
The remaining surplus after Whitmer’s proposed budget would come to about $250 million. The state’s new fiscal year starts Oct. 1.
“The last four years, we’ve really put our fiscal house in order, paying down $14 billion of debt, amassing a record rainy day fund and getting our credit rating upgraded in the process,” Whitmer told reporters Wednesday.
‘That’s why we’re in a position to make investments that were long overdue.”
Whitmer also was proposing a budget plan for the first time to a Democratic-controlled Legislature. For her first term in office, Republicans were in charge of both the House and the Senate, leading to some tense budget negotiations.
For Fiscal Year (FY) 2024, Whitmer’s General Fund (GF) budget — which includes funding for public safety, higher education and state departments — is $14.8 billion. Federal dollars make up 41% of the proposed budget.
The state’s School Aid Fund (SAF) budget proposal, which primarily goes to K-12 schools, is $19 billion and includes the highest per-student funding in Michigan yet.
The budget proposal includes $614 million to support school operations through a 5% increase to the base per pupil amount, or $458 per student, for a total of $9,608 per pupil.
Whitmer said that since taking office in 2018, the per pupil funding has increased by 22%.
The proposed budget puts $200 million into the state’s rainy day fund, bringing the balance to nearly $2 billion by the end of the fiscal year. Whitmer also proposed a new rainy day fund that is solely for schools, with a $900 million proposed deposit into the School Aid Fund
Budget Director Chris Harkins, who presented the plan Wednesday alongside Whitmer, said these two state savings accounts could bring the state’s rainy day funds to nearly 9% of the GF and SAF combined revenues.
In an uncommon move, the governor brought along two outside advocates — UAW President Ray Curry and Susan Tellier, president of JetCo Packaging Solutions and a member of the Small Business Association of Michigan (SBAM) — as she did a roundtable with reporters after her budget proposal.
“The economic development investments in the governor’s budget will help businesses of all sizes across the state as we create more good jobs and drive innovation and opportunity for workers,” Tellier said.
In the coming months, legislative leaders will offer their own budget proposals before negotiating with the governor. A finalized budget is due in July, but there is no penalty if Whitmer does not sign bills by that time.
In February 2022, Whitmer recommended a $74.1 billion budget for FY 2023. After negotiations with the GOP-led Legislature, the FY 2023 budget totaled $76 billion.
Harkins said that the “strategic investments” proposed Wednesday “can leverage our state and federal resources to rejuvenate and reinvigorate our state.”
Whitmer said the budget proposal builds on criminal justice reform enacted by the Legislature over the last few years, invests in infrastructure needs, lowers medication costs, bolsters public safety, expands child care accessibility and more.
“I’m really excited to work with our Legislature to get this done,” Lt. Gov. Garlin Gilchrist said after the budget presentation Wednesday. “There is still a lot of work to do, but know that we are committed to doing it, and doing it judiciously.”
This story will be updated with more details.
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authored by Laina G. Stebbins
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