Hours before the start of the new fiscal year on Oct. 1, Gov. Gretchen Whitmer on Wednesday signed a $62.8 billion budget that was agreed to by legislative leaders weeks earlier.
The Fiscal Year (FY) 2021 budget does not include any funding cuts to local governments, schools, colleges and universities. The Democratic governor said the process was a “robustly” bipartisan process and, although not ideal given the circumstances this year, was successful and timely.
“It’s been an incredibly challenging budget cycle. The 2021 budget development process was different because it had to be different — through no choice of our own, though,” Whitmer said during a press call with reporters Wednesday. “It’s not what I wanted. It’s not what my administration wanted. It’s not what the legislative leaders would have chosen. But it’s what we had, and the good news is that we succeeded.”
The FY 2021 budget underwent a much different process than the one before. That budget fight was drawn out for months, kicked off by months of inaction before a last-minute Republican push of budget bills just before the deadline that lacked input from Whitmer. Whitmer chopped and moved around some of the GOP-proposed budget, infuriating Republican lawmakers and leading to strained relations with Whitmer’s administration that lasted into the winter.
This year, Republicans had agreed to a faster deadline, but COVID-19 upended those plans. Instead of having two Conference Revenue Estimating Conferences (CREC) as is usually done, fiscal leaders held a third CREC in August to get a better handle on the state’s revenue outlook.
When pressed by reporters on the unusual amount of budget negotiation that went on behind closed doors and the lack of transparency, Whitmer said Wednesday that COVID-19 is to blame for upending the process.
“I recognize that in an ordinary year, there’s a lot more ability for the public to participate,” Whitmer said. “I regret that that wasn’t able to happen in the midst of all the crises that we are confronting. … This process was unusual because 2020 is unusual, in many ways.”
Despite Whitmer and legislative leaders celebrating the bipartisan effort they made to come to a budget agreement, Senate Majority Leader Mike Shirkey (R-Clarklake) still used the opportunity to criticize Whitmer on last year’s budget process and her COVID-19 executive actions.
“We were able to achieve this by working together — not alone, like [Whitmer] did last year and throughout the pandemic,” Shirkey tweeted Wednesday.
We were able to achieve this by working together — not alone, like @GovWhitmer did last year and throughout the pandemic. The budget that we passed this year shows what can be done when we work together as our founding fathers intended. #MILeg #MIGov
— Sen. Mike Shirkey (@SenMikeShirkey) September 30, 2020
State Rep. Shane Hernandez (R-Port Huron) made a similar comment last week after leading legislative approval of the budget.
“We are putting the state in a good position to handle potential budget issues in the months and years to come. This proves good things happen when government functions the way it is intended – when the governor works with the Legislature, instead of making unilateral decisions without legislative input,” Hernandez said in a statement.
Both Whitmer and State Budget Director Chris Kolb have been vocal throughout the COVID-19 outbreak about the need for more federal aid to state and local governments.
As estimates from the rare third CREC meeting in August revealed, Michigan’s state budget is in a better place than experts had believed back in May — but Michigan Department of Technology, Management and Budget (DTMB) spokesman Kurt Weiss told the Advance last week that more federal funding is still needed for the state’s economy to continue its recovery into 2022.
“While the overall economic and revenue picture has improved since May, it’s important to remember that we are still down $4.2 billion combined for Fiscal Year 2021 and Fiscal Year 2022 when compared to the January consensus revenues,” Weiss said. “…We are still looking at massive budget shortfalls for [FY] 2022, and the additional federal aid is needed to help us with our long-term recovery.”
Weiss added that much of Michigan’s economic recovery so far has been fueled by dollars from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. After those funds dry up, “it’s unclear if revenues will continue to hold up,” he said, noting there is still uncertainty about what a second wave of COVID-19 could do to the budget.
Out of the $3.1 billion that Michigan’s state government received from the CARES Act, Weiss says that $2.8 billion was used in FY 2020 and the remaining $300 million will be used in this coming fiscal year.
The new FY 2021 budget signed includes many of Whitmer’s previously announced priorities, including the Healthy Moms, Healthy Babies program, while adding many COVID-19 related boosts to education, health care access and jobs.
Some highlights of the newly signed budget are:
- $161 million in flexible per pupil spending to help alleviate increased costs of educating students during COVID-19
- $30 million for the Michigan Reconnect program to provide a tuition-free pathway for adults
- $5.6 million for mental health counselors to assist Michigan students
- $5 million in incentives to attract and retain first-year teachers
- Increase of $5.7 million for funding literacy coaches and expanding resources to improve training for other educators
- $2 million in additional support to assist vulnerable students who are learning remotely, including special education students, students who are chronically absent and children in need of childcare while their parents are working
- $1 million for school meal debt forgiveness
- Teacher hazard payments of up to $500 per teacher, with additional payments of up to $250 for school support staff
- $135 million to extend the $2/hour wage increase for direct care workers assisting the elderly and other vulnerable individuals
- $26 million to expand access to childcare for families, by increasing the income limit from 130% to 150% of the federal poverty level
- $12.6 million for “Healthy Moms, Healthy Babies” to provide care during pregnancy and support for improved outcomes
- $20 million in additional support for nursing homes for COVID-19-related cost increases
- $20 million to support the state’s psychiatric hospitals
- $10 million to implement foster care policies to keep more children with families rather than entering congregate care
- $2.5 million to provide first responders with the mental health services they need, including treatment for post-traumatic stress disorder
- $2 million for the Lead Poisoning Prevention Fund
- $100 million for business attraction efforts
- $28.7 million for the Going PRO program to support job training grants to businesses
- $15 million for the Pure Michigan travel campaign
- $5 million (and more in federal funding) for the Conservation Reserve Enhancement Program, which aims to reduce runoff of contaminants into Lake Erie and other watersheds
- $7 million to increase the number of troopers within the Michigan State Police
- $4.2 million to begin implementing the pre-trial incarceration task force recommendation for crisis intervention and de-escalation training through the Michigan Coalition on Law Enforcement Standards
- $14.3 million in broadband funding to help expand internet access across the state