Michigan House passes $80.9B budget, as the Senate is expected to take up its version Thursday

Michigan Capitol | Susan J. Demas

The Democratic-controlled Michigan House voted through its $80.9 billion vision of the Fiscal Year 2025 budget Wednesday night, going slightly above Gov. Gretchen Whitmer’s $80.7 billion recommendation, which had free preschool and community college as centerpiece proposals.

However, those plans didn’t make it into the House’s version passed on Wednesday.

The goal was focusing on people’s hometowns and taking care of the people of Michigan through funding affordable housing, water infrastructure and public safety efforts, House Appropriations Committee Chair Angela Witwer (D-Delta Twp.) said on the House floor Wednesday as the budget was being passed.

Michigan Rep. Angela Witwer (D-Delta Twp.) at a House Appropriations Committee September 19, 2023. (Photo: Anna Liz Nichols)

“This budget isn’t about scoring political points; it’s about people, about building up our hometowns as places where every person can live, work, raise a family and retire with dignity,” Witwer said.

Unlike the FY 2024 budget, which had the luxury of drawing on an unprecedented $9.2 billion surplus, mostly due to federal funding from COVID-19 relief, the FY 2025 plan will draw on a much more modest, yet still healthy, $418 million surplus as determined by the Consensus Revenue Estimating Conference (CREC) in January. 

The next CREC is scheduled for May 17, which may cause further adjustments in the final budget.

The Michigan Senate is scheduled to vote Thursday on its version of the budget, with the differences between the two chambers then negotiated out in conference committees. Once that process is complete, the budget will then return for a final vote before being sent to Whitmer for her signature.

The Legislature has a July 1 deadline to wrap the budget, although there are no penalties if they fail to meet that goal. The next fiscal year starts Oct. 1.

With Democrats controlling both houses of the Legislature and the governor’s office, the budget process has been smoother during the current legislative session than during Whitmer’s first term when Republicans were in charge of the Legislature.

Other than spending on military and veterans affairs, every other element of the House’s budget passed along partisan lines, with House Minority Leader Matt Hall (R-Richmond Twp.) telling reporters after session that Democrats need to come to the table and work with Republicans to create transparency in the budget process and lower income taxes for families.

“… With all the extra funding, Democrats are refusing to invest resources where they count,” Hall said in a written statement after session. “Instead of streamlining government to get out of the way of economic growth, investing in road repairs and school safety, or improving accountability to ensure taxpayers get value for their dollars, House Democrats prefer to waste money to hire hundreds of new bureaucrats and dole out subsidies for electric vehicle chargers.”

Michigan State House Republican Leader Matt Hall (R-Richland Township) speaks at a media roundtable before the governor’s State of the State on Jan. 24, 2024. (Photo: Anna Liz Nichols)

Republicans offered up more than 200 amendments to the budget to try and get some of their priorities heard before negotiations on a final budget between Whitmer and legislative leaders begins. However, none were adopted.

Witwer said there’s already noticeable points of difference between the House’s and the Senate’s versions of the budget that will need to be negotiated over the next few weeks to have the budget done in June.

“There’s plenty of them, starting with revenue sharing [funds for local government] … the  public safety trust fund, there’s differences and how much will be invested in water, how much will be invested in housing. So there’s a lot of differences in all three budgets, education higher ed,” Witwer said.

The House passed budgets that bear some stark differences from what Whitmer in February presented as her budget proposal, notably her plan to support students from pre-K to graduation.

Whitmer announced during her State of the State address in January that she wanted pre-K to be available for free for every 4-year-old in Michigan and make the first two years of community college tuition-free for high school graduates.

But the House left those items out of their budget, electing to approach the issues of barriers to education in different ways.

State Rep. Samantha Steckloff (D-Farmington Hills) told reporters Wednesday that the House’s plan took the money that would have been allocated for tuition-free associate’s degree programs to instead increase funding to Michigan Achievement Scholarships, which were given to more than 24,500 students last year, according to the governor’s office.

“It’s really important that we’re looking at the student and education as holistically as possible … The barriers for many students really are those additional expenses, those additional expenses that I’ve heard over and over again, because I just happen to have sat in that chair across from those students,” Steckloff said.

The true cost of college includes transportation, housing costs, food and textbooks, Steckloff said. The shift in funding could better help lift barriers for students so they aren’t stuck paying back student loans with high interest rates because they’ve run out of money for the cost of living while they’re in college, she said.

The governor’s budget plan also proposed to spend $370 million for a 2.5% increase in base per-pupil funding for K-12 schools. That equates to an additional $241 per student, for a total of $9,849 per pupil, up from $9,608 last year. 

However, the proposed House plan, HB 5503, would scale that back slightly to a 2.25% per-pupil increase in the foundation allowance, from $9,608 to $9,825.

Whitmer budgeted another $300 million for student mental health and school safety needs, which is also in the House plan, as is $200 million to continue providing universally-free breakfast and lunch to Michigan’s 1.4 million public school students, which she said would save families $850 per year. 

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