Lansing Capitol

Four Michigan State Police officers secure the front of the Capitol on Jan. 13, 2021 in preparation for possible weekend protests.

(The Center Square) – Gov. Gretchen Whitmer and the GOP-led Legislature struck a bipartisan budget agreement for fiscal year 2022, which begins October 1. The governor plans to sign the budget into law before the end of this month.

“The budget will make the biggest-ever one-time deposit into our rainy day fund, repair or replace nearly 100 bridges, expand childcare to 105,000 kids at low or no-cost, replace lead service lines, permanently raise pay for direct care workers, and do so, so much more,” Whitmer said in a statement. “I look forward to continuing in the spirit of collaboration to spend the billions in federal dollars we have available to us from the American Rescue Plan and the billions more we are expected to receive from the bipartisan federal infrastructure bill.”

The General Fund budget will total $11.8 billion, and when combined with the School Aid Budget of $17.0 billion ($2 billion from federal sources), the full budget will provide $26.8 billion in state spending. With federal funding and other restricted revenues included, the full budget will total just under $70 billion.

“This budget is going to help Michigan emerge as an even stronger state and it provides the type of investments that will foster real and lasting improvements to support Michigan’s families and businesses,” State Budget Director David Massaron said in a statement.

The budget includes:

  • $108.1 million that makes 105,000 more children eligible for child care by increasing income eligibility to 185% of the federal poverty level through fiscal year 2023, then 160% ongoing in the following fiscal years.
  • $13 million to waive parent copays for childcare through fiscal year 2022.
  • $158 million for an ongoing 30% rate increase for childcare providers, with an additional $222 million for a temporary rate increase.
  • $117.4 million to pay for enrollment in childcare through fiscal year 2023.
  • $36.5 million over three years to expand the number of childcare spaces for infants and toddlers.
  • $700.7 million for stabilization grants and another $100 million for startup grants for childcare providers.
  • $30 million for a one-time $1,000 bonus for childcare staff.
  • $100 million for community revitalization and placemaking grants to support economic development in local communities.

The budget will also provide direct support for education and skills training and provide Michigan employers with talent. That includes:

  • $55 million for the Reconnect program to provide a tuition-free pathway to an in-demand industry certificate or associate degree for Michigan adults age 25 and older.
  • $25 million for the Futures for Frontliners scholarship program paying for frontline workers to attend local community college tuition-free.
  • $40 million for the Going Pro program to expand employer-based training grants to get industry-recognized credentials and certificates to help raise wages and fill job openings.
  • $8 million for pre-apprenticeship/apprenticeship training programs will expand Michigan’s talent pool in the construction and building trades.
  • An increased base funding of 1% for operations at universities and community colleges with a one-time 4% increase in funds.

The budget will invest in state infrastructure, appropriating $196 million to repair or replace nearly 100 crumbling bridges, $14.3 million to help local governments prepare for climate change and extreme weather, including flooding and coastal erosion. Another $19 million would fund dam repairs and replacements to mitigate flooding and hazards caused by dam malfunction.

The budget will also fund initiatives focused on the health of Michigan families, including:

  • $460 million to give a permanent $2.35/hour raise to direct care workers
  • $7.4 million to expand the Infant Home Visiting program for evidence-based home visiting services to at-risk families with infants born with substance exposure.
  • $19.1 million for the MiChoice program expansion to provide alternatives to nursing home care and allow seniors to stay in their homes (an increase of 1,000 slots).
  • $8.4 million to reduce health disparities and expand the use of community-based navigators to enhance access to health coverage and improve screening, data sharing, and interoperability of existing data systems through the Michigan Health Information Network.

The budget also invests in water and the environment, including:

  • $10 million to continue replacing lead service lines in Benton Harbor to provide access to safe drinking water.
  • $15 million for the Emergency Drinking Water Fund to help the state address drinking water emergencies.
  • $14 million to address PFAS and another $22 million to clean up contaminated sites across the state.
  • $25 million to clean up the Western Lake Erie Basin by reducing phosphorus levels.
  • $10 million for the Lead Poisoning Prevention Fund to help eliminate lead poisoning in homes by injecting private capital into lead remediation efforts.
  • $5 million for the State Facility Green Revolving Fund, a catalyst for energy efficiency and renewable energy projects at state facilities.

A 2% increase is provided for statutory revenue sharing payments to cities, villages, townships, and counties, and Constitutional Revenue Sharing is adjusted to reflect higher-than-expected sales tax revenues. This is an increase of $71 million to local communities statewide to help fund police, fire and public safety.

The budget will also deposit $500 million into the Budget Stabilization Fund, bringing the total fund balance to nearly $1.4 billion, representing the most significant rainy day fund balance in state history.

Staff Reporter

Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.