Whitmer Budget Plan Prioritizes Tax Cuts and School Funding

Gov. Gretchen Whitmer, center, delivers her State of the State address to a joint session of the House and Senate on Jan. 25, 2023, at the state Capitol in Lansing. (AP Photo/Al Goldis, File)

By Associated Press

February 8, 2023

LANSING—Gov. Gretchen Whitmer on Wednesday proposed a $79 billion budget that aims to substantially invest in schools and public health while cutting taxes for the state’s retirees and low-income households.

Unveiled in a joint session between the House and Senate appropriations committees, Whitmer’s proposal for the 2024 fiscal year would be the the state’s highest ever and comes as the state’s surplus is projected to exceed $9 billion.

Whitmer said Wednesday that she knows the “number one concern for Michiganders across our state right now is costs,” and that her budget will “lower costs, grow our economy and build a brighter future for Michigan.”

If passed by the Democratic-controlled Legislature, Whitmer said her plan would be a “historic education investment” and would deposit $19 billion into the state’s School Aid Fund that would include a 5% increase in per-pupil funding for schools.

The increased investment would include $300 million to fund a universal pre-K proposal that would provide free preschool, hire more teachers and fund transportation for the state’s 5,600 4-year-olds.

The governor said she also wants to put aside $160 million to become the fourth state to provide free breakfast and lunch for all students, which she said would save families an average of $850 a year.

“We know that a child whose tummy is growling has a very difficult time, if at all possible, to appreciate and to participate in the academics and other education that is happening in the school,” Whitmer said.

First announced in last month’s State of the State, Whitmer once again highlighted her “Lowering MI Costs” plan to repeal the retirement tax and significantly increase earned income tax credit for low-income households. The governor announced Monday she plans to send $180 “inflation relief checks” to all tax filers, a plan that would cost $800 million.

The plan would also put $800 million into a fund used to attract large corporations to the state and would also create a funding mechanism putting $500 million each year into the business incentive fund.

Infrastructure was another top priority for Whitmer, who was first elected using the slogan “Fix the Damn Roads.” Her plan includes $200 million to rebuild and fix bridges across the state and $65 million to expand electric vehicle charging networks.

As she looks to expand access to electric vehicles in the state, the governor also wants to eliminate sales tax on electric vehicle purchases of up to $40,000, saving up to $2,400 in taxes.

Budget Director Chris Harkins said the governor’s budget would drain the state’s $9 billion surplus and leave approximately $250 million on the balance sheet at the end of the 2024 fiscal year.

Republicans have refused to pledge their support for the tax relief plan, which Democrats would need if they want the plan to apply to the current tax season. Whitmer told the House and Senate appropriations committees “the ball is now in your court.”

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