Even after signing next year’s $76 billion state budget that makes record investments in education and public health, Gov. Gretchen Whitmer says there is more work to be done to give Michiganders, and the state’s business community, what they need as the pandemic wears on and inflation strikes close to home.
Last month, Whitmer signed the budget into law, largely backing the plan the GOP-led Legislature approved.
Negotiators met behind the scenes for weeks to develop the budget proposal and announced a deal in late June. But they couldn’t agree on how to cut taxes, which is still possible thanks to a $7 billion budget surplus thanks to a flood of federal money and anticipated higher tax revenue.
State officials estimate that extra revenue is available to account for any tax deal that leaders can produce.
Whitmer, a Democrat, has called for targeted, more immediate tax cuts, while Republicans want broader ones including lower individual and corporate income tax rates. She’s hopeful that progress can be made when lawmakers return to the Capitol this fall.
The state’s fiscal year 2023 budget puts $6 billion toward state and local roads, bridges and other transportation projects. It also puts about $2.6 billion toward pension systems, including severely-underfunded municipal pension plans.
It also includes a $1.6 billion increase to the state’s “rainy day fund” as a precaution against an economic downturn as well as billions to improve public health and public safety, which includes $325 million to construct a new state psychiatric hospital, $250 million for a new state public health and environmental laboratory, $278 million to expand access to behavioral health services, and $125 million to raise Medicaid reimbursement rates.
The state’s education system is expected to see a windfall with $20 billion for K-12 schools. The School Aid Budget includes $610 million to increase per-pupil funding from $8,700 to $9,150, the highest in state history, and $500 million to increase support for special education students and those with mental health needs.
Whitmer vetoed money that Republicans funneled toward anti-abortion causes including groups that run “pregnancy resource centers” focused on persuading pregnant women to give birth and totaled about $20 million in cuts. The veto demonstrated the stark political divide over abortion rights in Michigan following the U.S. Supreme Court’s decision that effectively overturned Roe v. Wade.
Abortion remains legal in the state after a judge issued an injunction in a lawsuit filed by Planned Parenthood, which is challenging Michigan’s long-unenforced 1931 law banning abortion unless it is “necessary to preserve” life.
Whitmer has taken action, including filing a lawsuit with the Michigan Supreme Court and securing a restraining order to block county prosecutors from enforcing the state’s 1931 abortion ban, in an effort to ensure Michigan women have continued access to reproductive care.
The Oakland Press sat down with the governor this week to discuss investments included in next year’s budget and other topics:
The Oakland Press: How big did the Oxford High School shooting, and the strong and passionate community activism and outcry that followed, play into budget negotiations that included significant investments for public health and safety for schools? How important is it for students to know that they are safe when they go to school?
Whitmer: As a mom whose kids have grown up in our public school system, and are now at one of our universities, what’s front and center of mind is always their safety. And as we’ve seen an increased number of shootings in school, I know parents feel that anxiety around their children. I know teachers and everyone who works in schools still feel this as well. As tough as some of the days have been over the last three and a half years, the day of and the days following the Oxford shooting were without question, the absolute worst that we’ve had to navigate as a state and that I’ve had to navigate as governor supporting the families of Oxford. There’s no more important thing we can do and yet no more tougher thing to do. That’s why the community’s voices … really played a big role in making sure that we stayed focused on the things that would help people and help our kids get back to some normalcy. The stress of the last few years is felt everywhere. Mental health is an issue I hear about everywhere I go across the state, but I think that the Oxford experience and the advocacy around it was really important in informing this budget. I just wish that we could get the legislature to a place where they would do some common sense safety reforms, so that we could take another step to keep our kids and our communities safer.
Oakland Press: How do you hope the $7 billion in budget surplus is used? Where are you and the Legislature on a significant tax relief plan? Do you believe there can be a compromise soon as many Michiganders struggle t with rising costs?
Whitmer: I’ll continue to try to work with the legislature and get their support. They’ve got different ideas, but whatever it is that we do … should be something that we can afford to do without compromising these important investments we’re making. It has to be something that will give people relief right now. The legislature sent me a bill a while back. It wouldn’t have given anyone relief until 2023. That’s too late. That’s not real. And that’s why I want to stay focused on what we can really deliver right now that’ll help people.
We were really worried in May of 2020 when our budget projections showed a $3 billion deficit that would’ve undermined everything that we needed to do to come out of the pandemic in a strong position. Just two years later, we ended up turning that into a $7 billion surplus. Some of it was because we got our credit rating upgraded … which I think is important, but also we’ve clearly got a lot of support from the federal government and a lot of it is one-time dollars. That’s why it’s been so important that we’re strategic in deploying one-time dollars in ways that are going to put us on a path, but don’t set us up for failure because they are just one-time. I think that this budget reflects a really important investment and strategic use of these federal resources. We’ve also left quite a bit of money on the balance sheet, so we could do more. It’s my hope that at some point the legislature will come back to town and want to negotiate how we deploy those additional resources because there are certainly ways that we could use it to help small businesses, to help communities, and to make sure that all our kids have all the wrap-around support that they need in their educational experience. We’re not done, but we’ve taken a huge step forward. We still have more that we could, and I believe will, get done.
Oakland Press: Why was increasing the per-pupil funding a priority for you? Have the state’s public school systems been underfunded? If so, how did the pandemic impact the state’s education system?
Whitmer: The fact is that for the fourth year in a row we delivered a bipartisan budget and this year are making the largest education investment in state history, especially with an additional focus around the mental health needs of our kids and the wrap-around supports with literacy coaches, increased mental health care, and reducing class size. These are all important components to helping get our kids back on track. It’s crucial we continue to do this work. I have proposed that we have individualized tutors. We could afford to do it. I’m hopeful that at some point the legislature will come back and work with me on that front because I think that’s an additional way we can support our kids and their families as we’re all trying to get back on track after this two year disruption of a global pandemic.
The state’s public education system has been underfunded for years and it’s coming at a cost to what happens in the classroom whether it’s legacy costs or it is just simply a lack of keeping up with the natural cost of inflation over decades. We have been short changing our kids and our educators and that’s why putting these resources in right now is overdue. It’s a first great, big step forward. We have more work to do here, but every parent deserves the peace of mind of knowing when they send their kids to school that they’re going to be safe and they’re going to be educated. Kids deserve that peace of mind as well. I think this budget reflects all of those priorities and it starts to address the long overdue need in terms of greater investment in public education in Michigan. The last thing I want to point out is we’ve done something that three or four governors before tried to do and that is to level out how we fund our schools per pupil. It’s no longer the case where wealthy districts get a lot more resources to educate their kids versus districts that really need more resources to educate their kids. We’re funding them at the same level. We’ve built equity on top of that with additional resources toward the at-risk population, kids with special needs, and English language learners. That’s how we built equity on top of equalizing the funding, which was long overdue as well.
Oakland Press: How will billions in one-time federal infrastructure investments remediate road issues?
Whitmer: The roads have been long underfunded for decades. I’ve said that we’re going to fix these damn roads and I told people I’m serious about this. I came out of the blocks with the solution and kept that moving forward. We bonded these projects and because we’ve been doing this work, the engineering and the planning that goes on even before we start moving dirt, Michigan, as (U.S. Transportation) Secretary Pete Buttigieg said, is in a stronger position than just about any other state to be able to utilize these federal dollars that are coming in from the infrastructure bill. We will get 22,000 lane miles rebuilt in the coming years if we continue to put our foot on this accelerator. We’re already at 16,000 miles and 1,200 bridges. We’re making real progress, but you don’t undo decades of underfunding in three and a half years even with historic investment. It takes time and engineering, but we are moving dirt and we are moving fast. I know you see it with all the orange barrels and cones out there.
We’ve been resurfacing for a long time. A lot of these roads have to be rebuilt. … The work has begun. We’re moving forward and we’re moving as fast as possible. We’ve got a lot of hard working people out there, but we’re not just doing the superficial fixes. We are rebuilding and it takes time. It is hard work and expensive, but the longer we put off doing that work, the worse the situation gets and that’s why we have to get started. We certainly are moving a lot of dirt across the state.
Oakland Press: How will the new budget improve the state’s pension systems and what is your message to retirees?
Whitmer: In America, it used to be that if you worked hard and you played by the rules you would be just fine and secure in your retirement. With legacy costs on municipalities, some of that’s in jeopardy with decisions by my predecessor and with the legislature, at the time, deciding to start taxing pension income to pay for a business tax break. They kind of pulled the rug out from underneath people. I opposed the tax when they first pushed it through the Republican-led legislature and the former governor signed it. I’ve opposed it every year and I’ve been trying to get rid of it since I’ve been governor. I’m hopeful at some point the legislature will work with me on this. I can’t do it alone, but this is something I think is a fundamental fairness issue. When you’ve worked your whole lifetime and you’ve played by the rules, it’s not like a 70- or 80-year-old can just go and pick up a part-time job to make ends meet. They have a fixed, limited income. And with inflation pinching people, it shows now more than ever we have to do right by our retirees and repeal the pension tax.
Oakland Press: In the wake of the recent U.S. Supreme Court decision on abortion, what have you, and will, you do to ensure Michigan women have quality reproductive care, including abortions?
Whitmer: I’ll take every step that is necessary to protect abortion access in Michigan. This isn’t right.We’ve had it 49 years and with the U.S. Supreme Court’s decision in overturning Roe v. Wade, it’s thrown Michigan into a scary place where we could … have one of the most extreme abortion laws in the country. This will have a huge impact on women and our families and have a huge impact on our economy. We cannot let this happen. That’s why I filed the lawsuit even before the decision and even before the draft decision was known because I was worried this is where the Supreme Court was heading. I took a little grief for it. Some people said it’s too early, that I jumped the gun, that it’s not ripe yet, and maybe it’s not necessary. Well, obviously it absolutely was. I’m still hopeful that the Michigan Supreme Court will take the case. I know we’re going to the ballot in November. I’m so grateful for all the work that’s been done and I’m glad we’ve got an injunction at the moment, but this is a high stakes, scary time. It’s a fundamental question: Are Michigan women going to be able to make decisions about their bodies and their lives without government or the court or others interfering with that?
We did get our temporary restraining order to cover all the county prosecutors that have abortion clinics in their boundaries. Obviously, there are hospital systems that are very concerned about the patients they care for and you know, some of the very volatile and ugly rhetoric. We have a Planned Parenthood clinic that was attacked this past weekend in Southwest Michigan. … I think it’s really important that we pass the ballot initiative in November and that the Michigan Supreme Court takes my case and issues a ruling so that women and providers across the state can have comfort knowing that they still have the same rights that we’ve had for the last 49 years.