(DETROIT) – Around $330 million in General Fund revenue was left on Michigan’s balance sheet Wednesday as the Governor finished signing the next state budget. With multiple tax credits and a 10-year, $6 billion economic development plan still on the Legislature’s to-do list, top elected officials conceded Wednesday that a fall supplemental spending bill is on the table.
Inside the Detroit Fire Department’s 52 engine house, located in the city’s Chandler Park-Chalmers neighborhood, the Governor signed the $59 billion budget (SB 747) for state departments.
Speaking alongside the Governor Wednesday was House Speaker Joe Tate (D-Detroit), Senate Majority Leader Winnie Brinks (D-Grand Rapids), Detroit Mayor Mike Duggan, Detroit Fire Commissioner Charles Simms and Detroit Fire Chief James Harris.
Including the School Aid budget (HB 5506), the state’s $82.5 billion budget for FY 2025 was first passed by legislators after 4 a.m. on June 27.
On the same day, the Senate Fiscal Agency projected $319.3 million in General Fund revenue remaining on the state’s budget sheet (not including the Governor’s nearly $9.2 million in item-line vetoes Wednesday), as well as $30.8 million in the School Aid Fund. More than $1.2 billion from the General Fund contributed to one-time spending projects, and $13.61 billion financed ongoing investments to be baked into the funding base for next year’s budget.
Brinks told members of the press Wednesday there is always conversation about a fall supplemental to deploy leftover funding.
“There’s always supplemental in conversation if needed. We’ll continue those conversations throughout the coming months, and let’s see what is required of us to keep our state moving in the right direction,” Brinks said. “It is important to define our wants and our needs, but there is always a case to be made that some things are important enough to consider this year. We’ll take a look at those, and we’ll consider those on their merit.”
Meanwhile, Republican groups have dived into calling the combined budget wasteful. HB 5506 for education passed by a party-line, and SB 747 for state departments received one Republican yes-vote from Sen. Ed McBroom (R-Waucedah Twp.).
“Their giant budget, which was funded by their recent income tax hike, managed to inject cash into pet projects in a few favored communities like Detroit and Lansing. But the Democratic trifecta couldn’t be bothered to distribute any extra statewide resources to help every community repair their city streets and rural roads, and they chose to (ax) hundreds of millions in school safety funding,” said Rep. Andrew Beeler (R-Port Huron), the assistant minority leader, in a press release.
Beeler said kids struggle to read and drivers can’t navigate pothole-riddled roads, “at least casino-goers in Detroit’s Greektown will have taxpayer-funded Wi-Fi.” He was referencing a $300,000 General Fund grant, among the budget’s more than $429 million in special project, or “pork” spending for the state’s Department of Labor and Economic Opportunity (LEO).
What Did Whitmer Highlight In Big Omnibus Budget?
During her remarks, Gov. Gretchen Whitmer highlighted more than $100 million being set aside in SB 747 for housing. For example, more than $2.3 million is appropriated for a housing readiness incentive grant program, offering local governments – from villages to counties – up to $50,000 in grants incentivizing the adoption of land use policies and zoning to expand their housing supplies and affordability.
LEO, which houses the Michigan State Housing Development Authority (MSHDA), will specifically oversee $33.4 million to construct and renovate single- and multifamily housing units, as well as to conduct energy efficiency upgrades.
Michigan’s “Revitalization and Placemaking” program will have $50 million in its coffers for upcoming Fiscal Year projects like green spaces, walking and non-car transit projects, green spaces, commercial corridors with room for local retailers and “arts and cultural amenities.”
In terms of health, SB 747 deletes $10 monthly premiums for very poor households – those residing at or below 212 percent of the federal poverty level – with children insured through the MiChild state program.
While discussing economic security prior to signing the budget, Whitmer said new factories and new jobs need to be created in Michigan, and supply chains need to return home.
“This budget makes another deposit into our bipartisan economic development fund. It establishes the innovation fund to invest in scalable startups and launch hundreds of new (Michigan-based) companies,” Whitmer said. “We’re supporting entrepreneurs, small business owners of color and are setting up (the) new ‘Farm to Family’ program to bring Michigan crops to Michigan (tables).”
For example, the FY ’25 budget infuses $10 million into minority-owned business support, with at least $2 million to be spent on at least one female minority-owned business in Detroit specializing in electric vehicles (EVs) and EV equipment. Another $1 million is for the Detroit-based generation of a “business incubator” or “entrepreneurship programs” dedicated to giving “marginalized communities” larger access to the technology field.
The minority-owned business support also calls for a work project surrounding “minority-owned business support,” that will be in development until the end of September 2029.
However, the $60 million innovation fund that Whitmer mentioned – intending to expand state capital for early-stage startups – cannot be deployed until the Legislature approves HB 5651, HB 5652, HB 5653, as well as an unnumbered Senate bill, this fall.
Moreover, Whitmer touted a $75 million public safety and violence prevention fund Wednesday, which similarly depends on the Legislature sending HB 4605 and HB 4606 to the Governor’s desk this fall.
Budget implementation bills were not the only things left behind by legislators this summer, remaining on the to-do list for the fall.
What Else Could Be On Legislators’ Post-Budget Agenda?
Earlier this summer, Whitmer’s office expressed a desire to see large-scale economic development reform done alongside a balanced budget. In particular, she was referring to a revamped version of the Strategic Outreach and Attraction Reserve (SOAR) Fund, the state’s designated pot for multi-million dollar corporate incentives.
The plan consists of HB 5768, HB 5769 and HB 5770, setting aside $600 million annually for one decade. Of that yearly money, $250 million would be grants for sizable corporate developments, $200 million for significant transit projects and $100 million funding affordable and workforce housing.
Two of the most influential backers of the SOAR Fund reform are General Motors and Rocket Companies, the Detroit-based troupe of mortgage, real estate and financial service businesses run by billionaire Dan Gilbert.
General Motors is scheduled to vacate the Renaissance Center, Downtown Detroit’s major complex of skyscrapers, next year, and Gilbert’s Bedrock commercial real estate firm is working to determine the iconic building’s future. An ongoing discussion surrounding the SOAR Fund reform is how it could be used to preserve the Renaissance Center’s future, preventing it from becoming blight and diminishing projections of it being significantly demolished.
“I think we’ll continue conversations around economic development,” Whitmer told the media Wednesday, confirming she was still pushing for a SOAR Fund 2.0. “They were things that many of us would hope to address prior to (getting) the budget done, but there’s plenty of time to do more work on this.”
Furthermore, there continue to be several incomplete tax credit proposals floating around Lansing, ranging from research and development tax credits for manufacturers, a tax credit for poor households to care for young children and a tax credit for individuals caring for ailing family members.
Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter
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