9 Ways Michiganders Will Save Cash Under the New State Budget

The latest state budget includes record investments in public education, health care and infrastructure. And the spending plan will also help Michiganders keep more money in their pockets. 

LANSING—Democrats are calling the latest state budget a “budget for the people.” 

With nearly $82 billion in spending outlined over the next fiscal year, the annual spending plan marks the largest in state history. It includes more than $24 billion for Michigan’s public schools, and billions more for boosting infrastructure, public safety, and public health.

Those investments are set to pay dividends for Michigan’s economy and overall quality of life. But how exactly is the state’s biggest budget going to save Michiganders money?

Here’s are a quick, purse-pleasing overview:

Free Preschool

• Estimated Annual Savings: $10,000

The budget includes $255 million to create free, four-year-old preschool—a plan first unveiled by Whitmer earlier this year to help “parents, especially moms, go back to work,” she said. State officials estimate that up to 5,600 children will gain access to free preschool beginning next year—saving their families about $10,000 annually.

“This announcement is a reflection of the state’s continued focus on lowering costs for families, supporting early learning, and investing in the growth and retention of early childhood professionals in Michigan,” said Carrie Rosingana, CEO of Capital Area Michigan Works!

Retirement Tax Rollback

• Estimated Annual Savings: $1,000

Legislation signed by Whitmer earlier this year will provide relief for Michigan’s retirees by phasing out the state retirement tax. Rolling back the tax is expected to save a half-million households an average of $1,000 a year. Killing the tax—which was put in place under former Republican Gov. Rick Snyder—has long been a priority for Democrats in Lansing. 

“The retirement tax has robbed Michigan seniors of their promised retirement benefits for more than a decade. Eliminating it has been a top priority of mine since I began serving,” Sen. Kevin Hertel (D-St. Clair Shores) said in a statement. “Lowering MI Costs will provide targeted and equitable relief for retirees, and I am proud to be a part of restoring the broken promise.”

Working Families Tax Credit 

• Estimated Annual Savings: $3,150

Expanding the state’s Earned Income Tax Credit from 6% to 30% will help about 700,000 low-income Michiganders by putting an average of $3,150 back in their pockets, officials said. 

Sen. Kristen McDonald Rivet (D-Bay City) led the proposal to expand the credit, which earned the backing of more than 230 community groups across the state before it became law. The extra cash is poised to tip about 26,000 Michigan families above the poverty line.

“The Working Families Tax Credit is a proven, bipartisan tool to lift working families out of poverty and has widespread cross-sector support,” McDonald Rivet said in a statement, labeling it the “perfect policy” to counter inflation and help small businesses struggling to retain staff.

Healthcare Coverage Expansion

• Estimated Annual Savings: $2,000+

About $6.2 million is earmarked to reinstate the Medicaid Plan First! program, which is designed to fill a coverage gap for people who exceed the income limit for the Healthy Michigan plan, but lack insurance coverage for cancer screenings or family planning through other means. 

About 25,000 Michiganders are expected to see about $2,000 a year in savings on essential medical services under the soon-to-be expanded state health program. 

Free Breakfast and Lunch

• Estimated Annual Savings: $850

It’s hard to learn on an empty stomach. This year’s budget recognizes that by including $160 million to provide all 1.4 million Michigan public school students with free breakfast and lunch. It’s a move estimated to save the average Michigan family over $850 every year.

Statistics show that more than 70 million free school breakfasts were served to Michigan students last year. Expanding the state assistance to include all students—regardless of their income—is designed to help fill the gap left by lapsed federal pandemic-era benefit programs.

The expansion addresses the strain on family budgets caused by rising food prices, and, for parents who usually prepare breakfast and lunch in the morning, it will help save them time.

“Healthy School Meals for All will be transformational for Michigan’s students and families,” said Collin McDonough, director of Michigan Government Relations at the American Heart Association. “Proper nutrition is a key component of a heart-healthy lifestyle, and having no-cost breakfast and lunch will ensure our students have what they need to succeed.”

Affordable Higher Education

• Estimated Annual Savings: $5,000

Additional cash for career and technical training—and the Michigan Achievement Scholarship—will help lower the cost of community, private, or public college by thousands of dollars for 80% of Michigan students, and make higher education free for about 65% of them.

Another $70 million will allow the state to temporarily lower the eligibility age for the Michigan Reconnect program from 25 to 21, ultimately providing about 350,000 more Michiganders with access to a tuition-free associate degree or skills training in preparation for their future careers. Officials billed the move as a “game-changer” for those seeking degrees.

Expanded Food Assistance

• Estimated Annual Savings: $3,650

More funding is included for the Double Up Food Bucks program, which helps Michiganders receiving food assistance access additional fruits and vegetables. The program offers residents a dollar-for-dollar match, up to $10 a day. The budget includes $4.9 million to operate that program statewide over the next two years.

Officials said the expanded program will allow more families to save on healthier food options while simultaneously putting more dollars into the pockets of Michigan’s local farmers.

Wage Increases for Direct Care Workers

• Estimated Annual Savings: $1,800

With $140 million earmarked to boost health care offerings, direct care workers who provide Medicaid home- and community-based services will see an $0.85 per hour wage increase across the board as part of the latest state budget. Those employees include nurses, nursing assistants, and respiratory therapists, as well as housekeepers and dining room assistants. 

Energy Efficiency Rebates

Another $212 million included in the budget offers Michigan homeowners additional rebates on the purchase of energy efficient home appliances, water heaters, heating and cooling systems, new windows, insulation, and other home efficiency improvements. 

The funding for the expanded rebates came from President Joe Biden’s Inflation Reduction Act, and is set to be distributed to Michigan homeowners through the Department of Environment, Great Lakes, and Energy and the federal Home Energy Performance-Based, Whole-House Rebates (HOMES) and High-Efficiency Electric Homes Rebate Act (HEERA) programs.

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