Michigan leaders agree to budget deal with no cuts to schools, cities

Craig Mauger
The Detroit News

Lansing — Michigan leaders say they've reached an agreement on the spending parameters of the upcoming state budget ensuring no reduction in funding for K-12 public schools and no cuts in revenue sharing for local governments.

The deal was announced Monday evening by Senate Appropriations Chairman Jim Stamas, R-Midland, House Appropriations Chairman Shane Hernandez, R-Port Huron, and State Budget Director Chris Kolb. The announcement came less than three weeks before the state's new fiscal year begins on Oct. 1.

"This has been a year unlike any other,” Stamas said in a statement. “The unprecedented challenges Michigan has faced meant that working together — Republicans and Democrats and the Legislature and the Administration — was absolutely essential.

"This agreement means a fiscally-responsible budget will be in place in time for the new fiscal year."

Gov. Gretchen Whitmer with Lt. Gov. Garlin Gilchrist II, behind her, acknowledges some guests during the State of the State address at the Capitol Building in Lansing on Jan. 29, 2020.  She is flanked by Senate Majority Leader Mike Shirkey, left, and Speaker of the House Lee Chatfield, right.

Budget work that often takes place in the state Legislature over six months will now play out over the next 16 days before the next fiscal year begins. 

"It’s different. But it's 2020," Hernandez said. 

During an Aug. 24 revenue estimating conference, state budget officials increased their projections for the coming year, citing a stronger than anticipated economic recovery from the COVID-19 pandemic. For next fiscal year, they hiked the projections from a $3.1 billion drop in May to a $2.5 billion decline — a $600 million improvement.

The new projections still fell below those from January, two months before the COVID-19 pandemic hit. In January, state officials approved revenue projections that estimated $25.5 billion for the School Aid Fund and the General Fund for the upcoming fiscal year. The new number put the estimate at $23 billion.

House and Senate subcommittee chairs will now work to determine the details of each budget, according to a press release. Final legislative action will occur on all budget bills next week, the release said.

“These targets will provide critical funding for our key priorities such as education, health care and skills training, and I appreciate the partnership I’ve had with both Sen. Stamas and Rep. Hernandez," Kolb said Monday.

House Minority Leader Christine Greig, D-Farmington Hills, said with a "flat budget," every dollar should be focused on supporting the essential needs of the state: "public education, social services, health care and infrastructure."

In July, Michigan officeholders reached a deal to resolve what was then pegged at a $2.2 billion shortfall in the current budget year while boosting funding for schools.

The plan used the vast majority of what remained from more than $3 billion in federal COVID-19 relief dollars. It also set aside $53 million in hazard pay for teachers and provides a net increase of $136 million for the K-12 budget.