Whitmer Proposes School Funding Boost, Bonuses and Tax Cuts

LANSING, Mich. (AP) — Awash in surplus revenue and federal pandemic aid, Gov. Gretchen Whitmer on Wednesday proposed a $74.1 billion state budget that would significantly boost education spending, pay bonuses to frontline workers and cut taxes for retirees and low-income families.

The election year plan, if approved by the Republican-controlled Legislature, includes a 5% increase in base aid for K-12 schools, universities and community colleges, and a 10% increase in revenue-sharing payments to municipalities.

The Democratic governor proposed “hero pay” for essential workers along with retention bonuses for school employees and first responders. She also formally unveiled previously announced tax relief plans, including rolling back the taxation of retirement income over four years and an increase in the state’s earned income tax credit.

“The budget I put forward today delivers on those tax cuts and makes strong investments in the kitchen-table issues that make a real difference in people’s lives,” Whitmer said in a statement.

In addition to calling for sizable funding hikes, she proposed new initiatives. They include creating a $1 billion school infrastructure modernization fund — $170 million in grants would be dispersed in the next fiscal year — and spending $200 million to help universities and community colleges make infrastructure upgrades.

The governor also requested $500 million to replenish a new fund that was used to award incentives for General Motors to convert a factory to make electric pickup tracks and to build a new battery cell plant in Michigan.

In building the proposal, her administration cited a $7 billion balance that was carried forward into the current fiscal year. The money would be directed toward “one-time” expenditures this budget year, next fiscal year or in future years.

Whitmer, for example, asked for $1.5 billion to give a $2,000 bonus to all preK-12 educators and non-instructional staff in 2022 and 2023. Teachers and certified staff such as counselors, social workers and nurses would get $3,000 in 2024 and $4,000 in 2025 amid educator shortages.

She sought $600 million to award competitive college scholarships to would-be teachers, stipends to student teachers and grants to districts and regional partners with plans to recruit, train and retain teachers from their own communities.

Republican lawmakers and the governor will iron out the budget in coming months. Republicans already have said they favor broader tax relief than Whitmer’s targeted cuts, such as a reduction in the income tax.

Enhancing Education

The budget recommendation provides for a school aid budget that marks the biggest state education funding increase in more than 20 years—without raising taxes.

  • $580 million to increase base per-pupil funding from $8,700 to $9,135, a five percent increase that equates to $435 per student.
  • $222 million to fully fund supports for economically disadvantaged students by providing an additional 11.5% of the base per-pupil amount per student and eliminating proration, increases total to $746.5.
  • $150 million to increase supports for special education students by increasing the reimbursement of costs for special education students by five percentage points, bringing the reimbursement rate up from 31% to 36%.
  • $31 million for additional supports for vocational education and career and technical education. This includes an increase in state reimbursed costs, additional funding for equipment purchases, and additional funding for millage equalization payments.
  • $5.3 million for increases for intermediate school district funding, English language learners supports, and students in rural and isolated districts. This amount represents a 5% increase in combined appropriated levels.
  • $1.6 billion for educator retention programs that make sure our educators have the supports they need and the recognition they deserve for the work they do, including:
  • $1.5 billion for payments to eligible teachers, administrators, and support staff who continue working in their school district over the next four years.
  • $50 million annually for teacher onboarding and mentoring programs.
  • $75 million for innovative approaches to addressing regional educator retention needs.
  • $600 million for educator recruitment programs to ensure the teacher talent pipeline continues to provide the education system with the best possible educators. Programs funded include scholarships for future educators, stipends for student teachers, training opportunities to create and improve school leaders, and expanded programs in school districts to recruit, train, and retain teachers from their communities.
  • $361 million for student mental health to ensure students with mental health needs can be identified and provided with the right support.
  • $66 million for school safety programs, building off existing school safety grant opportunities for districts and implementing cross-sector approaches to prevent mass violence through partnerships between schools, public safety, mental health professionals, and communities.
  • $72.6 million for pre-K education programs, including $56 million for the Great Start Readiness Program, which provides free preschool for income-eligible four-year-olds, to increase the full-day allocation from $8,700 to $9,135 per student and provide start-up funds for new programs and classrooms. The budget also includes increased funding for early identification and intervention services for younger children through the Early On Program as well as through home visitation and early childhood collaborative efforts.
  • $1 billion for the creation of a school infrastructure modernization fund to provide $170 million annually in future years, awarded to districts for significant infrastructure projects to offset the cost for districts.
  • $50 million for before and after school programs to help students with unfinished learning needs, provide a safe place outside of school hours, and provide the extra-curricular activities that foster academic success.
  • $94.4 million for literacy-related programs and activities in Detroit Public Schools.
  • A 5% ongoing increase plus a 5% one-time increase for university and community college operations as well as $200 million for campus infrastructure, technology, equipment and maintenance (ITEM) funds.
  • Allow Michigan National Guard members to transfer tuition benefits to their children and dependents.

Growing Michigan’s Economy and Investing in Workers

The budget recommendation calls for funding centered on economic and workforce development, including:

  • $500 million deposit into the Strategic Outreach and Reserve Fund to provide funding for economic development projects that invest in Michigan’s future and attract transformational projects that keep Michigan at the forefront of manufacturing.
  • $50 million for Electric Vehicle Rebates to provide a $2,000 point-of-sale rebate for the purchase of a new electric vehicle and a $500 rebate for at-home charging equipment for a new or used electric vehicle.
  • $40 million to provide aid to communities that have experienced significant economic impacts from the departure or disinvestment of large-scale employers and their workforces from their communities.
  • $500 million to provide hero pay for our frontline workers in support and recognition of their sacrifice during the pandemic.
  • $230 million for Transformational Education Infrastructure to promote new collaborative approaches among higher education institutions and other partners in health science and medical education, and the electrification of vehicles and mobility.
  • $200 million for the Michigan Regional Empowerment Program to support the growth, development, diversification, and resiliency of regional economies through a competitive grant program.
  • $88 million to strengthen Michigan’s Unemployment Insurance System.
  • $25 million for the Mobility Futures Initiative to support a statewide effort advancing Michigan’s position in the rapidly evolving mobility sphere.
  • $85.8 million for innovative workforce development programs for a range of new investments in Michigan’s workforce to address businesses’ needs for talent and to ensure Michigan residents have the skills, training, and opportunities they need for good-paying jobs.
  • Fund the Office of Rural Development to help rural communities meet workforce, education, infrastructure, and connectivity needs through a $10 million investment for rural development engagement and support.
  • A major investment of $200 million is recommended for the Michigan Regional Empowerment program to provide matching funds for regional empowerment programs that support the development and resilience of regional economies across the state.
  • A further $30 million in support for economic development in food and agricultural industries plus $10 million for rural development grants.

Improving Public Health

The budget recommendation calls for funding centered on the health of Michigan families, including:

  • $243.3 million for increased access to dental services for Medicaid enrollees that replicates the success of the Healthy Kids Dental program for adults by procuring Healthy Kids Dental, HMP dental, and fee-for-service adult dental services through a single combined managed care contract. Another $4.3 million is provided to increase Medicaid reimbursement for outpatient hospital and ambulatory surgical centers.
  • $8.3 million to provide ongoing increase for family independence payments, $100 per month per child ages five and under to assist low-income families with the unique costs of caring for very young children.
  • $10.5 million for a child welfare services rate increase, which increases state rates to residential child caring institutions serving foster children by 5% and private residential juvenile justice providers by 12%.
  • $20 million for to address racial health disparities.
  • $50 million for statewide nutritional and food bank support to assist with infrastructure improvements to distribute food more efficiently to families in need of assistance, including the creation of an emergency stockpile of food in each food bank warehouse.
  • $25 million for student loan reimbursement for behavioral health providers.
  • $325 million for a new State Psychiatric Facility Complex, funds construction on a single campus, serving to replace facilities for the Hawthorn Center and Walter Reuther Hospital to increase inpatient capacity and improve efficiency of services provided.
  • $15 million to the Jail Diversion Fund to be used by the Mental Health Diversion Council to distribute grants to local entities to establish and expand jail diversion programs in partnership with local law enforcement and behavioral health services providers, ensuring that individuals with mental illness receive appropriate treatment.

Rebuilding Michigan’s Infrastructure

The budget recommendation calls for historic investments in Michigan’s infrastructure, including:

  • $578 million in funding from the Infrastructure Investment and Jobs Act (IIJA) to provide resources for several Michigan infrastructure projects that will continue to fix roads, bridges, railways, and local and intercity transit, while also providing capital improvements at airports.
  • $480 million in fiscal year 2022 to increase road and bridge construction for state and local roads, highways, and bridges.
  • $150 million to support projects that are economically critical, carry high traffic volumes, increase the useful life of key local roads, or will be completed in conjunction with bridge replacement projects.
  • $66 million for generators for pump stations to ensure reliable generator backup power is available at all 164 MDOT-owned pumping stations, increasing public safety measures for highway flooding events.
  • $60 million for rail grade separation to support projects at key congested local rail crossings that impede efficient movement of commercial and passenger vehicles and jeopardize timely public safety response in an emergency.
  • $3.9 million for the Michigan Automated Weather Observation System Replacement Plan to increase public safety by replacing the state’s automated weather observations, some of which are 30 years old.
  • $5 million to fund and staff the newly formed Michigan Infrastructure Office to effectively and efficiently implement federal infrastructure funding and serve as an interagency coordinating body across state government and stakeholder groups.

Investing in Safe Communities

The budget recommendation calls for funding centered on safe communities, including:

  • $50 million for first responder retention, to provide payments to law enforcement officers and public safety personnel, including state troopers, conservation officers, firefighters, EMTS, and local and state corrections employees who have performed hazardous work related to the COVID-19 pandemic.
  • $9.2 million for a state police trooper recruit school to graduate 50 new troopers in addition to the 120 troopers that are anticipated to be hired and trained using existing attrition savings.
  • $1 million for state police trooper recruitment to help broaden the racial, ethnic, and gender makeup of the Michigan State Police to make it more representative of the communities it serves.
  • $48 million for community technical assistance for lead line replacement projects.
  • $40 million for home plumbing to provide grants to households earning up to 200% of the federal poverty level to make minor home plumbing repairs to ensure safe drinking water and help make homes eligible for weatherization assistance.
  • $34.3 million for high water infrastructure grants to local units of government for high water level and climate resiliency planning and infrastructure needs, focused on addressing flooding, coastline erosion, transportation networks, urban heat, and storm water management
  • $69.3 million for cleanup of contaminated sites and to improve the ability to identify, assess, and cleanup sites of legacy contamination plus additional funds for rapid response
  • $10 million to begin the conversion of the state government fleet to electrical vehicles.
  • $1.6 million for food and agriculture preparedness and response to address gaps identified during the pandemic, helping create and maintain disease response plans.