LANSING, MI – Michigan lawmakers are headed to the negotiating table to hammer out the state’s next budget after the House and Senate moved their proposed budget plans through both chambers last week.
The state’s budget for the 2023 fiscal year officially begins Oct. 1, and it must be signed into law by Gov. Gretchen Whitmer by Sept. 30.
But before that can happen, lawmakers have to negotiate a final state budget out of three different proposals: one from the governor’s office, one from the Senate and one from the House.
Whitmer proposed her $74.1 billion budget plan in February, which takes advantage of a massive amount of federal funding and surplus revenue, sending dollars to schools, infrastructure projects and front-line workers while securing tax cuts for seniors and low-income workers.
Last week, the House and the Senate both finished the process of pushing their own proposals through each chamber.
The House has proposed 16 budget bills totaling $76.3 billion, which includes $1.4 billion for state police and a $9,000 per-pupil allowance for Michigan schools.
The Senate has proposed 18 budget bills totaling $74 billion, which includes a $9,150-per-pupil allowance for Michigan schools and a new scholarship program providing high school graduates with $3,000 a year for community college and $6,000 a year to attend a university.
Each chamber allowed both packages of bills to fail in a floor vote on Thursday, May 19, a procedural move that allows the budget bills to head to conference committees, where members of the House and Senate will convene to negotiate a final budget plan.
Leadership in both the House and Senate will soon be appointing members from the two chambers to serve on the conference committee.
This year, lawmakers are working with a higher-than-expected boost in tax revenue for the state budget. But Whitmer and the Republican-led state legislature have clashed on the best way to return that money to Michiganders.
Michigan is projected to bring in a total of $31.5 billion in state general fund and school aid revenues this fiscal year, which is up $3 billion from previous projections, according to estimates shared at the state’s May Consensus Revenue Estimating Conference last week.
RELATED: Michigan projects $3B budget surplus for 2022 as economy, work force continues to grow
Whitmer wants to use the surplus as a tax rebate and give working families $500. The details of who would be eligible for the money has not been specified. If all 10 million Michiganders received $500, the plan would cost $5 billion. If all 4.6 million employed Michiganders got $500, it would cost $2.3 billion.
But state legislators passed a different package of bills last week that would cut taxes by a total of $2.7 billion. The proposal would lower the personal income tax, increase the Earned Income Tax Credit and provide families a child tax credit. The House proposal passed in the Senate along party lines last week.
State Rep. Thomas Albert, R-Lowell, who leads budget negotiations in the House as chair of the Appropriations Committee, warned that the revenue projections are just estimates – “not actual money in the bank.”
“With all of the uncertainty in the economy, we must be careful – it would be a mistake to make plans for spending this new estimated surplus right now,” Albert said in a statement following the conference. “We are seeing warning signs of a recession and we might not actually have that much tax revenue coming in as time goes on.”
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