Whitmer and Michigan legislators agree on fiscal year 2021 budget

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Despite the battering incurred by COVID-19 on the state’s economy, the Michigan legislature and Gov. Gretchen Whitmer agreed on a fiscal year 2021 budget that includes significant spending increases as well as continuing funding of education, economic development, public health and safety, and environmental initiatives at current levels.

The agreement on the 2021 omnibus and School Aid Fund budgets was announced late Wednesday afternoon by the governor’s office. Neither budget will include an increase in taxes.

The budget increases came the same week the government watchdog group Truth in Accounting ranked Michigan 39 th in a state-by-state report. Only 11 states placed worse, with Michigan graded “D” along with 15 other states for its fiscal health prior to the COVID-19 outbreak.

The state is projected to report a revenue loss of $9 billion, partially as a result of the pandemic. According to the report, the state would require $17,000 from every taxpayer to reconcile its debt.

Among the spending increases announced are $14.3 million in broadband funding, which will be used to expand Internet access across the state. Schools, colleges, universities and local government receive the same funding as in fiscal year 2020.

Additionally, the 2021 budget includes $100 million for business attraction efforts and $15 million to restore the Pure Michigan campaign. Another $30 million will be allocated to the Michigan Reconnect program, which provides free tuition for adults seeking a postsecondary certificate or associate degree.

The Healthy Moms, Healthy Babies program will receive $12.6 million, and $26 million will be spent to increase the income limit to childcare access from the current 130% to 150% of the federal poverty level.

Although acknowledging the state faces an uphill economic battle, the governor and other political leaders celebrated the agreed-upon budget.

“Every budget faces it challenges, and this year that was especially true,” Senate Minority Leader Jim Ananich, D-Flint, said in a statement.

“Just four months ago, we were told to prepare to make devastatingly painful cuts to the tune of billions,” Ananich continued. “But today, we’re voting on a budget that contains meaningful increases in health care, education, career readiness programs and more.”

“COVID had an unexpected impact on the budget and the budget process,” Senate Majority Leader Mike Shirkey, R-Clarklake, said in a statement.

“The legislature and the Governor’s team worked together to move forward and deliver a spending plan for Michigan that increases school funding, protects funding for local communities, and supports the men and women who keep us safe. And, we did it all without raising taxes on our hardworking citizens.”

Speaker of the House Lee Chatfield, R-Levering, concurred.

“The economic impact of the coronavirus created an unprecedented challenge for state government, but more importantly it also created an incredible challenge for Michigan families,” Chatfield said.

“Our budget committees and representatives did great work finding a way to balance this budget while still protecting critical funding for healthcare, schools reopening safely, local public safety, fully phasing in the 2015 road funding plan, and other top priorities for Michigan families,” he continued.

Whitmer has said she will sign the bills prior to the beginning of the fiscal year beginning Oct. 1.

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