(The Center Square) – Republicans who gained control of the Michigan House of Representatives this year want to cut more than $4 billion – about 5% – from the state budget.
It would be the first time in at least 10 years that state lawmakers reduced the overall appropriations to state departments and would align the budget more closely with pre-coronavirus spending trends, according to a Center Square analysis of state data.
Annual budget increases in the years leading into the pandemic, which began in March 2020, averaged between 2% and 3%, the data show. Appropriations approved by state lawmakers for four years after the start of the pandemic had annual increases that averaged about 8%.
Fueled in part by an influx of federal funding, Michigan’s current $82.5 billion state budget has grown about 39% since the start of the pandemic, according to state data.
Government spending in Michigan and elsewhere swelled in response to the pandemic as elected leaders attempted to stem the spread of the virus and bolster the economy. States have benefitted from federal aid and strong sales tax revenue.
But those revenue increases have slowed, and Michigan’s budget increase last year dipped to about 1%. Democrats had control of the state House and Senate the last two years, and Democrat Gretchen Whitmer has been governor since 2019.
Senate Democrats this year approved a 2.5% increase. The House Republican plan would cut about 5%. It’s unclear what compromise lawmakers might reach and when.
State Rep. Ann Bollin, the Republican chairperson of the House Appropriations Committee, blamed Democrats for not tempering state spending while they had full control of state government in recent years.
Bollin called the newly approved House Republican spending plan “a fiscally responsible and a fiscally sustainable budget for all,” when she spoke just before a House vote on the budget last week.
“Instead of adding 3% or 4% to last year’s top line, we pored through it, line by line,” Bollin said. “We asked tough questions about what was working, what wasn’t working.”
House Bill 4706 was adopted 59-45. Karen Whitsett, of Detroit, was the lone Democrat who joined Republicans to pass the measure.
Big pandemic increases
The largest year-to-year increases in the state budget were in fiscal years that began in 2021 and 2022, in which the budgets increased more than 10% apiece.
One of the biggest benefactors of those increases was the Department of Labor and Economic Opportunity, which oversees programs that are meant to buoy the economy. The money appropriated to the department more than doubled to $2.9 billion over the course of three years.
The Democrat-controlled legislature cut about 16% of the department’s budget last year, but House Republicans seek a further reduction of 47% this year to about $1.3 billion. That appropriation would be less than the department’s budget just before the pandemic.
Republicans also seek substantial cuts of about $5 billion to the state Department of Health and Human Services, which in the current budget was allotted about $38 billion. Most of the reduction would affect Medicaid and behavioral health services.
If enacted, the HHS cuts would revert the department’s funding to slightly less than what lawmakers approved three years ago.
The Republican budget proposal includes more modest reductions — on the scale of tens of millions of dollars — to several other departments.
State Rep. Alabas Farhat, a Democrat of the House Appropriations Committee, chided Republicans last week about the potential effects of those budget cuts on healthcare, childcare and affordable housing.
“What virtue is there in a budget that cuts $6 billion in spending?” Farhat said just before the budget vote, citing the difference in total spending desired by House Republicans and Senate Democrats.
But the Republican budget proposal does not feature across-the-board cuts — it contains a $3.4 billion funding increase for the Department of Transportation.
Bollin, the appropriations chairperson, called it “a roads plan that will finally fix the damn roads.”
