Lansing — Gov. Gretchen Whitmer signed Michigan’s new $62.8 billion budget into law Wednesday, saying the plan “funds the programs and services that matter most to our residents.”
The signatures from Whitmer put the final touches on a budget for fiscal year 2021, which begins Thursday. It’s a result of hurried negotiations between the Democratic governor and the Republican-controlled Legislature during a pandemic that’s crunched the state’s tax revenues.
“This has not been easy, but in the end the executive and legislative branches of government worked together to do what is expected and demanded of us and we now have a budget that will serve Michigan well,” Whitmer said in a statement.
Michigan leaders used federal aid, targeted cuts and account surpluses to avoid major spending reductions to the state budget and fill an expected $2.5 billion budget hole due to the coronavirus pandemic.
The budget, which received widespread support from Republican and Democratic lawmakers, maintains revenue sharing levels for local communities and increased school funding while avoiding large cuts in other departments. About $17.65 billion was set aside for the School Aid Fund and $45.1 billion for the general omnibus budget that finances all other state agencies and offices.
Whitmer’s Wednesday announcement noted the budget includes $161 million in “flexible per pupil spending to help districts address the increased costs of educating students in the midst of a pandemic” and $30 million for the Michigan Reconnect program to provide a tuition-free pathway for adults looking to earn a post-secondary certificate or associate degree.
Her office also highlighted $14.3 million in broadband funding to help expand internet access and $100 million for business attraction efforts.
The spending plan raids and nearly depletes the balances in both the School Aid and General funds. The School Aid Fund plummets 99% to $200,000 from $869.5 million, while the General Fund plunges 97% to $45.5 million from $1.6 billion, according to House Fiscal Agency Director Mary Ann Cleary.
Chris Kolb, the state budget director, said officials are looking at a potential $1 billion loss in revenue for the next fiscal year, which would begin on Oct. 1, 2021. Kolb called on the federal government to provide additional assistance.
“That will be critical to not only helping us out but also reviving our economy,” Kolb said.
Last year’s budget stood at nearly $60 billion when initially passed, but increased to about $68.1 billion throughout the year and with the addition of federal coronavirus relief dollars.
Staff Writer Beth LeBlanc contributed