LANSING, Mich. — Michigan Senate Democrats passed the budget for Fiscal Year 2025 just before 5 a.m. Thursday, allocating $82.5B for the state amid dissension from Republicans.
“This budget is more than numbers on a page — it's a strategic investment in our state, communities, and residents," says Senate Appropriations Chairwoman, Sen. Sarah Anthony. We’ve transformed once-in-a-generation investments into our annual priorities, creating a moral document that truly provides ongoing support for the people of Michigan and builds them up.
The measure includes Senate Bill 747 (the general fund total of $15B) and House Bill 5507 (the school budget of $19B) and is designed to "support students, boost public safety, and build affordable housing, and will help anyone "make it" in Michigan" according to the Governor's Office.
Education
The new budget pays off certain Michigan Public School Employees’ Retirement System (MPSERS) liabilities earlier than scheduled— a move Democrats say freed up $670M they intend to invest in classrooms.
"As a parent, I know our kids are our number one priority, which is why this budget puts students first by making historic investments to improve learning outcomes from pre-K through college, so that every child can get a world-class education," said Governor Gretchen Whitmer.
Republicans are quick to point out the state is still $30B behind in MPSERS liabilities.
“There is no excess money to spend elsewhere, there are no savings to divert," says Sen. Thomas Albert who sponsored a 2018 law requiring the state to stay on schedule with its debt payments. "Just like delaying a debt payment with your mortgage or credit card, this will lead to higher debt payments in the future. Taxpayers — including our kids — will get stuck with the bill.”
Opposition to the budget report the state's K-12 funding did not receive per-pupil increase for the first time in over a decade.
But, Democrats say spreading out the funding saves the state $400/pupil— offering what would equal a 4.2% increase in foundation allowances. The budget spreads $589M across districts, libraries, ISDs, and community colleges to cover retirement costs.
K-12 Education Highlights:
$133M to student mental health and school safety needs
$181M for programs that support literacy
$200M to provide free school breakfasts and lunches
$130M to expand free pre-K for 4-year-olds
$100M to support efforts to train and maintain educators in our state
$97M to support students who are academically at-risk, live in rural areas, are learning English, or achieving career and technical education certifications
$125M to continue transportation cost reimbursements
$75M for before- and after-school programs
$65M to increase childcare worker pay and bonuses by 15%.
Despite reported increases to both, Republicans say this budget decreases funding for school safety programs and student mental health.
The budget drops funding for these issues from $328M to $26.5M, report Republicans who raise concerns for the jobs of school resource officers and others funded under these initiatives.
“I am a strong advocate for schools and have never voted against an education budget, but I cannot in good conscience support a state spending plan that harms our students, their teachers and Michigan taxpayers.”
—Sen. Mark Huizenga (R-Walker)
Funding also focuses on increasing the number of Michiganders able to achieve a college degree or technical training.
Higher Education & Workforce Development Highlights:
1.5% ongoing and 1% single-time increase to university and community college operations funding
$30M to fund the Michigan Achievement Scholarship
$52M to continue Michigan Reconnect
$20M increase to the Tuition Incentive Program
$14.5M to the North American Indian Tuition Waver
Economy
The Governor's Office highlighted a $50M deposit into the state's Budget Stabilization Fund and a $3M allocation for the creation of a state-managed retirement plan marketplace allowing businesses with fewer than 100 employees to provide savings plans to workers. The Secure Retirement program, as it's called, would provide this service at no cost to the employer.
The budget is focused on expanding and creating programs aimed at economic growth by both bringing in workers and companies and increasing support for those who live in Michigan.
Economic Allocation Highlights
New Programs
Farm to Family - created with $3M to build agricultural diversity, increase food security and provide healthy food options, and support a resilient agriculture industry
Innovation Fund - a $60M allocation to invest in Michigan-based start-ups.
Attracting, Keeping Businesses, Employees
$500 million in continued investment to attract new manufacturers and industries to Michigan through the Strategic Outreach Attraction Reserve
$45.5 million for Talent and Growth to support current and future workforce needs and population growth
$10 million for Minority Owned Business grants
$15M to build off the iconic Pure Michigan campaign— doubling the program's current budget
Revitalizing Local Communities
$75 million in a new Revenue Sharing Trust Fund offering continued support for local governments
$50 million in continued funding for the Revitalization and Placemaking program — including new program to create high-density, high-amenity, walkable neighborhoods and business ownership opportunities for locals
Increasing Affordable Housing
$2.5 million to expand outreach and grant funding in rural communities by the Office of Rural Prosperity
$100 million to construct affordable housing
$3.3 million for the Housing Readiness Incentive Grant Program to encourage increasing housing supply and affordability.
$2.5 million for the Economic and Worker Transition Office to support transition to electric vehicles and clean energy
Infrastructure
Improving Michigan's infrastructure includes reopening the Palisades Nuclear Facility, funding lead service line replacement and climate change mitigation.
Efforts to improve local roads and bridges will get $74.5M in one-time funding and $247.6 in new funding.
$75M is to be invested into local and federal transit expenses, marine passenger services, and rail operations while infrastructure plans will also get $20M in federal American Recovery Plan funding.
The new investments in roads and bridges will add to $700 million from the final tranche of Rebuilding Michigan Plan bonds to be issued later this year.
It's another sticking point for Republicans.
"[The budget is] out of balance by over $1.3 billion," claims Sen. Joseph Bellino (R-Monroe) "Permanently increasing income taxes by $700 million and diverting hundreds of millions of dollars that were supposed to help pay off debt in the teacher retirement fund"
“This budget represents our core Democratic values — keeping residents safe, creating equitable housing, and making life more affordable so families can flourish,” said Speaker of the House Joe Tate, (D-Detroit). “However, passing a smart, responsible budget is not by any means just an illustration of what we stand for — these investments will provide tangible stability Michiganders can truly depend on."
Public Safety
Included in the Public Safety initiatives is the hiring and training of 120 Michigan State Police Troopers, supporting salary and equipment costs for the MSP recruit school. MSP will also get $1.4M to improve their ability to protect and patrol the state's Capitol and Heritage Hall.
The budget also provides for increases to safety communications systems, justice reform, and a new National Guard Armory in the Grand Rapids area. Another $75M will be invested in a new Revenue Sharing Trust Fund (aimed at supporting local municipalities) plus a total of $20M will go into the Disaster and Emergency Contingency Fund to cover current and identified expenses and safeguard against the risks of future disasters.
Public Safety Allocation Highlights
$75 to establish a Public Safety Trust Fund, providing resources for police services and community violence intervention efforts
$15M for improvements to the Selfridge Air National Guard Base
$5.4M to act on recommendations of the Task Force on Juvenile Justice Reform
$17M to help local prosecutors reduce caseloads in the counties with the highest levels of violent crime.
$8.8M to invest in education, training, and re-entry programs to increase success of offenders returning to the community
$7.8M for firearm injury and violence prevention programs
Equity & Public Health
Allocations also focus on equitable access to municipal services, legal services, healthcare, veteran services, business opportunities.
Allocations Supporting Equity
$37.4 million of new funding for local trial courts to support the effective and fair assistance of counsel for indigent criminal defendants across the state. In addition, $1 million of new one-time funding is included for the University of Michigan Law School to support competent legal representation for juvenile defendants in felony cases.
$18.5 million total to implement recommendations of the Racial Disparities Taskforce, including neighborhood health grants, mobile health units, sickle cell support and more.
$2.5 million to fund grants to nonprofit organizations to reduce veteran homelessness.
$5 million to continue the MI Contracting program to assist small and disadvantaged businesses in securing equipment and insurance to help them compete for contracts.
$2.4 million to make state government more accessible by ensuring information and materials are provided in the languages spoken by Michigan residents.
$800,000 for state certification, credentialing, and endorsement of approximately 1,000 interpreters serving the deaf, deafblind, and hard of hearing community.
$1 million for district courts to help individuals regain their driving privileges.
Along with supporting societal health, the FY25 budget makes provisions for victim services, raises for care workers, establishing a Certified Community Behavioral Health Clinics site, assistance for mothers and babies, and addiction services.
Public Health Allocation Highlights
$161.5 million to establish new Certified Community Behavioral Health Clinics sites across the state to serve as many as 35,000 additional individuals, providing them with behavioral health services.
$18.1 million in funding to continue the Healthy Moms, Healthy Babies program which helps new and expectant mothers receive the care they need and reduce racial disparities in infant and maternal mortality.
$37 million in new funding for the Family Independence Program, including the first meaningful change to the FIP payment rate since 1990, and expanded supplemental payments to families with young children.
$28.7 million to fund a 20-cent an hour raise for direct care workers.
$2 million to fund sexual assault victim services.
$40 million for federally qualified health centers and $17.2 million autism Medicaid rate increases.
$8.1 million for a Medicaid rate increase for private duty nursing services.
$7 million to provide vaccinations to young children.
$5.6 million funding to expand contraceptive coverage and family planning services.
$20 million to provide new funds to communities that identify innovative approaches to support expectant parents and newborns.
$1.8 million to ensure children have access to health care through MIChild, saving families $120 a year per child.
$5 million to help low-income households with pre-weatherization and improve the energy efficiency of their homes, reducing utility bills.
$7.3 million to ensure individuals experiencing behavioral health crises have access to the Michigan Crisis and Access Line 24 hours a day, seven days a week.
$2.5 million for smoking cessation and tobacco prevention programs to expand current efforts in addressing tobacco use among Michigan’s adult and youth population.
$1.5 million to increase the clothing and holiday allowances for children in foster care. This investment is the first increase in state support to foster parents for clothing and holiday presents in over 20 years, increasing the clothing allowance by 40-50% (depending on the child’s age) and tripling the holiday allowance.
$500,000 for technical assistance and equipment to ensure the water is safe to drink in the state’s child care centers.
$4 million additional in internet gaming, internet sports betting, and state lottery funds to support Problem Gambling services.
