How Michigan Democrats are breaking with Gov. Whitmer on tax, school policy in new state budget
Published in News & Features
LANSING, Mich. — The Democratic-controlled Michigan Senate approved Wednesday a $84.6-billion budget plan that was marked by higher spending on public schools and economic relief than what Democratic Gov. Gretchen Whitmer proposed in February.
The Senate's budget axed Whitmer's ideas to impose new accountability measures for schools, to institute a 32% tax on vape products and to hike a tax that trash haulers pay at landfills from 36 cents per ton to $5. However, senators included about $84 million in new revenue from pending legislation to increase fees on hunting and fishing licenses and to make a $10 recreation passport, which allows vehicles to access state parks, mandatory as part of registering a vehicle.
The Senate voted along party lines, 19-18, in favor of the majority of the 18 bills that represented the chamber's spending suggestions for the fiscal year that begins on Oct. 1. Eventually, the Republican-led House, the Senate and Whitmer will have to reach a consensus to enact Michigan's next budget.
So far, the House hasn't introduced or detailed its plans. And the Senate's proposal is about $1 billion larger than Whitmer's, which was about $83.6 billion.
The most significant financial differences between Whitmer's plan and the Senate's were in the funding for K-12 public schools. The Senate wants to spend $21.8 billion for K-12 schools, which is about $600 million more than Whitmer proposed and about $1 billion more than the $20.8 billion being spent this year.
Senate Appropriations Chairwoman Sarah Anthony, D-Lansing, told reporters Wednesday that her caucus believes "kids are our best investment."
"When you look at the future of Michigan, it's going to start by making sure that our kids are well educated, that they have the skills they need for tomorrow," Anthony said.
Democratic senators want to increase the base per-pupil funding for Michigan schools by $400 from $9,608 to $10,008, to provide nearly $500 million that can be used to lower class sizes and to hike funding to support at-risk students by $258.7 million.
Whitmer's proposed a similar per-pupil foundation allowance boost: $392 per student. But she also called for $232 million in funding for schools tied to implementing so-called "best practices," which the Senate didn't include in its budget.
The Democratic-led Senate also didn't include a series of new accountability and transparency measures that Whitmer proposed for schools. Negotiations in the future will determine if lawmakers and the governor "can meet somewhere in the middle," Anthony said.
Whitmer proposed school budget would require districts with under-performing schools to notify parents and outline a plan to remedy the situation as well as a mechanism for parental feedback. It also included $18 million in funding for administering accountability measures and for a new school turnaround hub. That appropriation wasn't in the Senate proposal.
In February, Whitmer's budget director, Jen Flood, said student test scores were suffering across the country.
"Unfortunately, Michigan is a part of that trend, and we all need to do better," Flood said.
Republican response
On Friday, state leaders will develop new revenue estimates for the coming fiscal year. Those estimates will specifically define how much money lawmakers have to spend as part of the upcoming budget negotiations.
The Senate approved its new budget bills over two days of voting: Tuesday and Wednesday. Under state law, the Legislature is supposed to pass a budget by July 1. But the fiscal year it covers doesn't begin until Oct. 1.
House Speaker Matt Hall, R-Richland Township, declined to commit last week to approving a budget by July 1.
"I think that we're dealing with an unserious group of people," said Hall of his rationale, referring to his Democratic counterparts in the Legislature.
In a statement on Wednesday, Senate Minority Leader Aric Nesbitt, R-Porter Township, said the Democratic senators' budget would "raise taxes and grow the size of government without addressing serious issues Michiganders care most about."
"While families have had to tighten their own household budgets, Senate Democrats want to spend more and more, wasting millions on priorities like housing for illegal immigrants, programs to help underprivileged people grow and sell cannabis and studies on how to tax the miles you drive," Nesbitt said.
Nesbitt said the Democratic majority blocked more than 90 amendments that Republicans proposed to the budget. Some of their suggested amendments included barring state funds from going to companies owned by a hostile foreign nation and barring transgender athletes from participating in women's sports.
Differences with the governor
There were significant differences between the governor's budget and the Senate's on the plan for the state Department of Labor and Economic Opportunity. The Senate allocated $100 million for economic relief and $75 million for housing relief.
Of the economic relief money, $20 million would go to businesses impacted by tariffs Republican President Donald Trump has instituted on products manufactured outside the U.S., $30 million would go to training and retooling grants, $20 million would go to emergency preparedness grants and $10 million would go to food bank grants.
Sen. Mary Cavanagh, D-Redford Township, said the Senate wanted to support Michigan residents through the tariff "transition."
"It's need based," Cavanagh said of the grants. "So it's high priority to people that are having a direct impact from some of these tariffs."
For Michigan's universities, Whitmer proposed a 4% increase — or $69.8 million — for operations funding. The Senate proposed a 3% increase — or $52.3 million. But the Senate also recommended setting up a one-time $33.4-million program to provide grants to universities for infrastructure, technology, equipment, maintenance and safety.
In addition, the Senate suggested a $58 million increase in funding for Rx Kids, a program that provides pregnant mothers with no-strings-attached cash of $1,500 during their pregnancy and $500 each month through the baby's first year after birth. The program received about $20 million for the current year.
On transportation funding, the Senate and the governor proposed similar overall budgets of about $6.9 billion. But the Senate included a "contingency appropriation" of $3 billion to implement a "comprehensive infrastructure plan" that could be used only if lawmakers can negotiate a long-term agreement on where to find the extra money.
Nesbitt described the contingency as a "placeholder with no details."
The Senate budget didn't include $80 million from Whitmer's proposed increase in tipping fees at landfills. Whitmer had wanted to hike the solid waste surcharge from 36 cents per ton to $5 per ton. Sen. Jeff Irwin, D-Ann Arbor, the sponsor of the Senate's Department of Environment, Great Lakes, and Energy budget bill, said there wasn't enough support in the Senate for the fee increase.
Similarly, the Senate's budget for the Department of Health and Human Services didn't feature $42.7 million in new revenue from a Whitmer-proposed 32% wholesale tax on vape products.
“The proliferation of vaping products raises profound public health concerns, particularly for young adults and adolescent youth for whom the rise in the use of these types of products is most notable,” the governor’s February budget proposal said.
Anthony said senators didn't believe the vape tax was necessary "at this juncture."
"Anytime that we're contemplating a tax increase, that's something we take really seriously," Anthony said. "And we didn't want to do that at this juncture."
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