(The Center Square) – After a recent Consensus Revenue Estimating Conference, tensions remain between the Michigan Legislature and Democratic Gov. Gretchen Whitmer.
In February, the governor proposed an $80.7 billion budget for the 2025 fiscal year. Since then, both the House and Senate have passed their own. After the CREC, a final vote in both chambers is necessary to finalize the budget before the July 1 deadline.
But there are disagreements between the legislature and governor on education spending.
This year’s tax revenue is projected to be about $31.7 billion, which reflects a slight increase from January’s CREC. It’s expected to reach $32.4 billion by Oct. 1.
“Tax collections are strong,” State Treasurer Rachael Eubanks said. “Corporate income tax, income tax withholding, and interest earnings are strong. Economic growth and higher wages are leading to higher income tax collections.”
The results from the most-recent CREC are stable, reflecting similar results as January.
“Like our revenue picture, the economy is strong and stable,” Eubanks said in a news conference. “Today, we heard many good reports about the U.S. economy and Michigan economy. For example, individuals are spending, wage increases are outstripping inflation and inflation is stabilizing.”
Budget Director Jen Flood described the 2025 fiscal year as a “return to normal” after years of high revenue and expanded programs from the pandemic.
Whitmer wants to use the extra money to boost education spending to include funding for free community college and preschool. She also recommended cutting per-pupil grants to cyber schools to 80% of what brick and mortar schools receive. This plan has received support in the Senate, but not the House.
Senator Appropriations Minority Vice Chair Jon Bumstead, R-North Muskegon referenced multiple points of concern, such as a $700 million income tax increase, and redirecting $670 million from the teacher retirement fund.
“This latest revenue estimate sends a serious message that lawmakers should proceed with caution as we finalize the state’s 2025 fiscal year budget over the next few weeks,” Bumsted said. “Now is not the time to irresponsibly spend state dollars, drive up costs, and raise taxes on overburdened Michiganders.”
Republican minority leaders have widely criticized the budget for its size, expressing concern over declining sales revenue due to inflation. House Republican leader Matt Hall, R-Kalamazoo, described Whitmer’s February estimation as “wasteful spending.”
