Universal Pre-K & Free Lunches, Expanded Community College, Cheaper Electric Vehicles, Tax Credits - What Whitmer’s Budget Means For Northern Michigan

Armed with a $9.2 billion state surplus, Governor Gretchen Whitmer unveiled a record $79 billion budget this week that would make Michigan the fourth state in the country to provide free breakfast and lunch for all school kids, expand free community college access, lower the cost of electric vehicles, move toward free universal preschool, and offer tax credits including a $3,000 tax credit for child care and preschool teachers and a $180 inflation relief check for every Michigan tax filer.

In a presentation to the House and Senate Appropriations committees Wednesday, Whitmer said she was focused on lowering costs and growing the economy in the fiscal year 2024 budget. She acknowledged it was a “big budget,” but said the state’s surplus – buoyed by federal recovery funds – provided a “great opportunity” to invest record amounts in education and economic development, among other categories.

The budget includes a general fund total of $14.8 billion and a School Aid Fund total of $19 billion. Education is a key focus of Whitmer’s plan: It includes the highest per-student investment in Michigan for the fifth year in a row. An estimated $614 million will cover a five percent increase in the base per-pupil payment. That equates to an additional $458 per student, or a total of $9,608 per student.

In addition to making a $900 million deposit into a new rainy day fund for schools, Whitmer calls for allocating $160 million to provide free breakfast and lunch to all of Michigan’s 1.4 million public school students. Michigan would become the fourth state in the country to roll out such a program. Whitmer said providing free school meals would save families an average of $850 per year. The budget also includes $257.3 million to expand the state’s Great Start Readiness Program – part of an ambitious goal to offer free preschool to every four-year-old within the next four years.

Traverse City Area Public Schools (TCAPS) Superintendent Dr. John VanWagoner says there are a “lot of great things in (the budget) that support schools,” including the free meal proposal. “We know that when kids are hungry and worried about basic life needs, it’s hard to learn,” he says. State Representative Betsy Coffia (D-Traverse City) also expressed support for providing free meals to students. “Charging kids to eat at school never made sense to me, especially with how many families in my district/across the nation are struggling to keep food on the table,” Coffia wrote on Twitter, noting that more than 40 percent of households in Leelanau County are at or near the poverty level.

VanWagoner says he has questions about other aspects of the budget, though. Staffing is a challenge for preschools even at their current enrollment levels; if universal pre-k access was available, it’d be important to look at staffing requirements to ensure there are enough employees to teach those classes, he says. “We’re struggling with staffing in so many areas,” he says. And while VanWagoner is appreciative of the potential boost in per-pupil funding, he says transportation funding still remains an area of “huge inequity” for rural northern districts like TCAPS with large geographic boundaries. “We cover 275 square miles, but we don’t get anything extra for bussing,” he says. “We spend over $6 million a year on transportation. We’ve had great conversations with our local representatives in Lansing and are working hard as a group of superintendents to try and fight for the resources that matter to kids in our five-county region.”

Other education proposals in the budget include $4 million to establish the Nature Awaits program, providing every Michigan fourth grader with a free field trip to a state park; $79.9 million to expand support for special education students (a 12.5 percent increase); $318 million for school safety programs; $300 million for student mental health services; $195 million for the certification, retention, and development of teachers; and a $3,000 refundable tax credit for child care professionals and preschool teachers. Noting that access to quality child care is “critical to workforce attraction and retention,” Traverse Connect President and CEO Warren Call said in a statement that his organization is “thankful to Governor Whitmer for responding to potential workforce challenges with expanding access to quality pre-K and child care” and looks forward to “working together on potential solutions."  

Higher education and workforce development programs are also covered in the budget, including a four percent spending increase for university and community college operations. The governor wants to use $140 million to expand access to Michigan Reconnect, which offers free community college and skilled trades training to individuals without a degree. Whitmer aims to temporarily lower the age of eligibility for the program from 25 to 21. Another $75 million would go toward college affordability grants for students whose education was disrupted by the pandemic, while $55 million would pay for a Student Wellness Fund to help universities and community colleges improve student wellness resources on campus.

Northwestern Michigan College President Dr. Nick Nissley says Whitmer’s “investment in community colleges demonstrates the vital role organizations like NMC play in our state's future success.” He says NMC is “helping people right here in northern Michigan improve their lives through programs like Michigan Reconnect and look forward to increasing access to it. We are grateful for the governor's support and look forward to working with our lawmakers to ensure this investment remains a priority.”

In terms of job training and economic development, Whitmer proposes spending $210.1 million to boost wages for direct care workers. The 10 percent increase would amount to an average wage increase of $1.50/hour for those working in nursing homes and extended care facilities. She also hopes to spend $150 million to build an insulin manufacturing facility in Michigan, which she said would create jobs and lower the cost of insulin. Close to $500 million would go toward public safety, including “dedicated resources for the first time ever to hire, train, and retain local cops, firefighters, and EMTs and upgrade public safety facilities and equipment,” according to the budget proposal.

To spur energy investment, the governor is proposing spending $65 million to expand electric vehicle charging infrastructure networks and access, $45 million to help local governments and businesses transition their fleets to electric vehicles, and $150 million in matching grants for school districts to switch to electric buses. The budget also calls for temporarily pausing the sales tax on the purchase of electric vehicles, which would save consumers up to $2,400 off the first $40,000 of the price of an electric vehicle.

Several tax breaks aimed at Michigan residents are part of a legislative proposal called “Lowering MI Costs.” Those include expanding the Working Families Tax Credit – which would extend an average of $3,000 in refunds to 700,000 households – and rolling back the retirement tax, estimated to save 500,000 households $1,000 annually. Whitmer has also proposed mailing a $180 inflation relief check to every Michigan tax filer.

The package of proposed tax credits is still under debate in the legislature. Republicans have criticized aspects of the plan, including the inflation relief checks, arguing they are a poor alternative to permanently lowering the state’s income tax rate. Lawmakers will continue to negotiate the package as well as Whitmer’s proposed budget. If eventually passed as proposed, the budget would reduce the historic $9.2 billion surplus to roughly $250 million, according to the governor’s office.