As the Legislature heads into budget negotiations fraught with competing policy changes, MIRS has laid out the 10 differences with the greatest potential impact between the Governor’s proposed budget and the plans passed by the House and Senate.
In general, the House’s $80.9 billion budget highlights included changes to local government revenue sharing, housing and water infrastructure funding, while the Senate focused on housing affordability and increased Medicaid reimbursements.
The Governor is big on funding free preschool for all Michigan four-year-olds, reworking the Michigan Achievement Scholarship (MAS) to fully cover community college and continuing the focus on large-scale attraction and retention spending.
Below are the details:
1. The Governor redirects $670 million in public school retirement debt payments to other K-12 priorities for Fiscal Year (FY) 2025, which she proposed using for programs like free Pre-K to every four year old and her K-12 free breakfast and lunch program.
While the House and Senate agree on the funding relocation, the Senate wants the dollars to go toward teacher student loan forgiveness and a higher foundation allowance, and the House wants to assist school district and educators with their own MPSERS obligations, including $51.6 million to reimburse public school employees for a portion of their 3 percent required MPSERS deposit.
School groups seem to prefer the House’s proposal to the Governor’s and Senate’s, due to an anticipated $290 million in freed up money for classroom operations.
2. Hand-in-hand with Gov. Gretchen Whitmer’s retirement debt rework is a promise to expand the Great Start Readiness Program (GSRP), offering free Pre-K to all four-year-olds and eliminating maximum income eligibility completely. The Senate proposed raising the income requirements from 300 percent of the federal poverty line to 400 percent, while the House wants it at 350 percent for prioritized households, and at 450 percent if there are GSRP spots still left over, which Rep. Regina Weiss (D-Oak Park) said would help Michigan ease into universal Pre-K without overpromising.
3. All three chambers made big changes to the MAS in their respective higher education budgets, with Rep. Samantha Steckloff (D-Farmington Hills)’s proposal expanding the scholarship’s scope most by allowing MAS dollars to cover non-tuition costs of attendance.
Her proposal keeps the dollar figure awards the same, while Whitmer’s plan would lift the $2,750 annual cap on community college scholarships and allow costs to be completely covered, though the funding could only be used on tuition and fees. The Senate’s plan would cover all tuition and fees for high school graduates if they attend an in-district community or tribal college, deploying as a “last dollar” scholarship to cover leftover expenses.
4. The Governor wants a 5 percent bump to local government revenue sharing, while the House and Senate want to burn the whole thing down and start over. The House proposed a plan to give local governments a set 8 percent of the 4-cent portion of the state’s 6-cent sales tax, instead of letting the number be decided in the budget each year, while the Senate set up a three-factor formula to determine how much locals get.
5. The House’s Department of Labor and Economic Opportunity (LEO) budget removed $163.4 million in Whitmer’s proposed large-scale job creation spending and replaced it with 30 smaller scale projects worth $236 million, including $6 million for symphony orchestra grants and $1 million for school psychologist training.
Similar to the Governor’s proposal, the Senate included more large chunks of money, with $201 million in community development and business attraction grant dollars, along with $150 million in housing affordability programs.
6. The Governor’s plan to increase landfill tipping fees from $0.36 per ton to $5 per ton, an issue that Democrats have campaigned on for years, was dumped from the House’s budget proposal, something Rep. Rachel Hood (D-Grand Rapids) said was due to timeline constraints and concern about the impact a sudden jump in cost could have on stakeholders. The Senate’s proposal still leaves a placeholder for the tipping fee increase, but doesn’t set anything in stone.
7. The Senate’s proposed Department of Health and Human Services (DHHS) budget included $194.9 million in Medicaid reimbursement rate increases. While the House and Governor’s budgets both include $36.1 million to increase Medicaid reimbursement rates for behavioral health, the House’s big focus was on opioid recovery funding.
8. Among the many changes necessary to fund Michigan’s new “lifelong education” department (MiLEAP) is a proposed 20 percent hike of hourly child care provider reimbursement rates in both the House and Senate budgets, doubling Whitmer’s proposed 10 percent increase.
9. The House and Senate Department of Natural Resources (DNR) and Department of Corrections (MDOC) budgets also concur on a plan to add corrections and conservation officers to the public pension system, or the State Employee Retirement System (SERS), something Whitmer’s proposed budget did not include.
10. The Senate is the only chamber to include a $1.5 million appropriation and five full-time jobs for a hotline to respond to auto accident care claims, along with requiring the Department of Insurance and Financial Services (DIFS) to prepare an annual report on auto insurance rate filings.
Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter
Click here for more News & Resources.