LANSING, Mich. (AP) — Michigan Gov. Gretchen Whitmer on Wednesday proposed a $79 billion budget that aims to substantially invest in schools and public health while cutting taxes for the state's retirees and low-income households.
Unveiled in a joint session between the House and Senate appropriations committees, Whitmer's proposal for the 2024 fiscal year would be the the state's highest ever and comes as the state’s surplus is projected to exceed $9 billion.
Whitmer said Wednesday that she knows the “number one concern for Michiganders across our state right now is costs,” and that her budget will “lower costs, grow our economy and build a brighter future for Michigan.”
If passed by the Democratic-controlled Legislature, Whitmer said her plan would be a “historic education investment” and would deposit $19 billion into the state’s School Aid Fund that would include a 5% increase in per-pupil funding for schools. The increased investment would include $300 million to fund a universal pre-K proposal that would provide free preschool, hire more teachers and fund transportation for the state’s 5,600 4-year-olds.
The governor said she also wants to put aside $160 million to become the fourth state to provide free breakfast and lunch for all students, which she said would save families an average of $850 a year.
“We know that a child whose tummy is growling has a very difficult time, if at all possible, to appreciate and to participate in the academics and other education that is happening in the school,” Whitmer said.
First announced in last month's State of the State, Whitmer once again highlighted her “Lowering MI Costs” plan to repeal the retirement tax and significantly increase earned income tax credit for low-income households. The governor announced Monday she plans to send $180 “inflation relief checks” to all tax filers, a plan that would cost $800 million.
The plan would put $800 million into a fund used to attract large corporations to the state and would also create a funding mechanism putting $500 million each year into the business incentive fund.
Republicans have refused to pledge their support for the tax relief plan, which Democrats would need if they want the plan to apply to the current tax season, and have said that Whitmer is diverting money into the state's business incentive fund to bypass an income tax reduction triggered by the state’s high revenue.
“I don’t know how many of these Democrats ran for office to give $500 million a year to corporations,” House Republican Leader Matt Hall said Wednesday.
Hall said “any plan that eliminates the income tax trigger like it appears this does” is not one that he would support.
Whitmer refused to say during a press conference Monday whether she would attempt to stop the income tax rollback but said the $180 check would “dwarf” any relief that might come from “doing nothing and hoping that something may or may not go into effect."
Infrastructure was once again a priority for Whitmer, who was first elected using the slogan “Fix the Damn Roads.” Her plan includes $200 million to rebuild and fix bridges across the state and $65 million to expand electric vehicle charging networks.
As she looks to expand access to electric vehicles in the state, the governor also wants to eliminate sales tax on electric vehicle purchases of up to $40,000, saving up to $2,400 in taxes.
Whitmer told reporters following the presentation that, if enacted, her budget would put $3 billion “into savings to prepare for any ups and downs,” including a $900 million into a new “Rainy Day Fund” for schools.
She told the House and Senate appropriations committees “the ball is now in your court.”
Budget Director Chris Harkins said the governor's budget would drain the state's $9 billion surplus and leave approximately $250 million on the balance sheet at the end of the 2024 fiscal year.