July 2024 Legislative Report

The Michigan Legislature has recessed for summer after a frantic few days of session at the end of June.  So far this year, the legislative calendar has been abbreviated due to a number of reasons including vacancies in the House and occasional absences of members.  With the slimmest of majorities in both the Michigan House and the Michigan Senate, Democratic leadership has had their hands full trying to ensure 100% attendance, let alone secure votes to pass controversial legislation.  This November, Republican House members will be pushing hard to recapture the majority in the House, while Democrats are working to maintain their lead.
 
This is one of the reasons there is not expected to be a great deal of additional session days before the election.  House members of both parties are desperate to be in their home districts campaigning for reelection.  It looks like there might be a handful of session days in September to complete work on legislative priorities such as increasing unemployment benefits and possibly passing a supplemental budget.
 
 
Legislature Passes Budget Just Before Deadline
 
 
In the early hours of June 27, the Michigan Legislature completed work on the Fiscal Year 2024-2025 budget and sent two appropriations bills to the Governor for her signature.  The Omnibus Appropriations bill (Senate Bill 747) will fund state departments and agencies, while the K-12 Appropriations bill (House Bill 5507) will fund public schools and early childhood education programs.  Both bills passed on party-line votes in the House, with 56 Democrats voting yes and 54 Republicans voting no.  The K-12 budget also passed on a party-line vote in the Senate with 20 Democrats voting yes and 18 Republicans voting no.  The Omnibus bill was mostly party-line in the Senate, with one Republican (Senator Ed McBroom, R-Vulcan) joining 20 Democrats to pass the legislation. 
 
Several years ago, Governor Snyder signed into law a July 1 deadline for the Legislature to complete the budget each year.  Although there are no penalties should they fail to do so, it is still a target that lawmakers work hard to meet.  This year, they were able to complete the process with a few days to spare.
 
The Omnibus Budget bill totals just over $59 billion in total spending that includes state and federal dollars.  This is an overall increase from the current year budget of $57.3 million. The total Omnibus Education budget, which includes K-12, Higher Education and Community Colleges, saw an overall reduction in total spending from $24.2 billion in the current year to $23.4 billion in the upcoming fiscal year.
 
On paper, most departments are receiving reductions in total funding.  However, that is almost exclusively due to the elimination of one-time state and federal funding included in the current year budget. Below is a brief breakdown of individual budgets by department:
 
Agriculture
The department receives a reduction in total funds from $168 million to $157 million.  This reduction stems primarily from a loss of one-time federal funds, as well as the transfer of the Office of Rural Development from the Department of Agriculture to the Department of Labor and Economic Opportunity.  The Legislature also added $3 million and created 6 FTEs for the Farm to Family program.
 
Attorney General
The Attorney General’s office saw an overall reduction of 9% due to the elimination of one-time funding in the current-year budget aimed at reducing the backlog on gun cases and for integration of the NextGen data system.  Setting those one-time programs aside, the Department will receive an approximately 2% economic adjustment along with the addition of 16 FTEs.
 
Civil Rights
The department loses approximately $5 million in the elimination of one-time funds, but receives an approximately $2.5 million economic increase for what will amount to essentially a flat budget with 9 additional FTEs.
 
Corrections
The department received an overall 2.9% increase, with the largest hike going to Prisoner Healthcare Services which was bumped by $16 million.  There were also one-time funds added for the purpose of retrofitting a closed portion of the Thumb Correctional Facility to be used as an educational center.
 
Education
The Department of Education saw a massive reduction in funding due to the fact that a large portion of its agencies have been transferred to the newly created Department of Lifelong Education, Advancement and Potential.  77 FTEs and approximately $431 million were sent from the Department of Education to LEAP.  The Legislature provided some new funding for the Department for the purpose of creating a career center for community health workers, and to create a database for charter schools.
 
Environment, Great Lakes and Energy
The department added 36 FTEs for various programs, although the overall appropriation was reduced by 1.2%.  The reduction was due to the removal of previous one-time funding – much of it related to pandemic relief efforts.  The Legislature added funds to fund pay equity raises for conservation officers and increased funding for the Water State Revolving Fund to take advantage of opportunities to pull down additional federal infrastructure dollars.  There were also several one-time appropriations to support water infrastructure projects and the build-out of electric vehicle charging stations.
 
Health and Human Services
DHHS is one of the few departments to see a gross increase in appropriations despite the removal of one-time funding.  Much of the increase stems from federal dollars pertaining to federal changes in managed care rules.  There were also increases due to actuarial data projecting higher health care costs.  The Legislature also provided funding to expand the Certified Community Behavioral Health Clinic demonstration projects, and to provide for a $.20 per hour increase for direct care worker pay.  Overall, MDHHS will add 80 FTEs throughout the department in the upcoming budget year.
 
Insurance and Financial Services
Because DIFS did not receive any significant one-time funding in the current year budget, their overall gross appropriation will climb by 6% in the next fiscal year.  Much of the new funds go to economic increases, but there are also increases for the Insurance Evaluation and Consumer Services and Protection program, as well as funds to oversee pharmacy benefit managers per recently passed legislation. 
 
Labor and Economic Opportunity
LEO, on paper, takes one of the largest hits in terms of total spending reductions in this budget.  However, that is primarily due to the fact that a vast amount of appropriations passed through the department in the current year budget as funding for special projects and community enhancement grants.  Just over $1 billion was removed from the department’s gross appropriation with the elimination of one-time spending.  The Legislature added funds to several programs in LEO, including the Office of Global Michigan, the Pure Michigan program and the Prosperity Bureau.  The Legislature also provided funding for the creation of the new Community and Worker Economic Transition Office that was created as part of the “Green Energy” legislation passed last year.  A total of just over 22 additional FTEs are authorized for LEO in the next fiscal year.
 
Licensing and Regulatory Affairs
LARA saw more changes to its budget than most departments this year, mainly due to a large number of new programs being given additional funding, and the transfer of Child Care Licensing and Regulation Bureau to MiLEAP.  Many existing programs saw increases such as the Public Service Commission, the Cannabis Regulatory Agency, and the Consultation, Education and Performance Office.  Also, the Bureau of Construction Codes will receive additional funds both to increase the number of elevator inspectors and process a backlog of builder-related complaints.
 
Lifelong Education, Advancement and Potential
The newest department in state government is made up of several programs that had been housed at the Michigan Department of Education, the Michigan Department of Licensing and Regulatory Affairs, and the Department of Treasury.  The goal of the new department is to consolidate Pre-K education, child care, and adult education and enrichment programs under a single roof.  The Legislature authorized a budget of $644 million and 337 FTEs for the fledgling department. As part of its first budget, the Legislature authorized a 15% increase in child care reimbursement rates, added 30 new child care facility inspectors, and increased funding for child care network support.
 
Military and Veterans Affairs
The department will see an increase in overall funding primarily dedicated to operating increases for veterans homes around Michigan.  The department will receive a federal grant of $750,000 for veteran suicide prevention programming.  The Legislature also included one-time appropriations for infrastructure improvement at Selfridge Air National Guard base and Veteran Homelessness Grants to provide funds to local non-profit agencies that work to eliminate homelessness for veterans.
 
Natural Resources
In addition to the loss of approximately $42 million by the removal of one-time funds, the Legislature reduced funding to the DNR commensurate with the transfer of the Archives of Michigan from DNR to DTMB.  The Legislature added funding to the DNR for radio communication gear replacement, and the consolidation of the Law Enforcement Division’s incident and records management system.  The Legislature also appropriated $5 million for a DNR-administered grant program to assist state and local entities to celebrate the United States Semiquincentennial.  Try getting that on a t-shirt!
 
State
The Department of State receives a similar reduction in funds experienced by all departments through the loss of one-time dollars.  However, the Legislature included a $5.3 million appropriation to fund the strategic realignment of FTE positions.  Impacted positions will include certain classifications in Legal Services, Branch Operations, Election Administration, Central Operations, Department Services Operations, and Executive Direction.
 
State Police
The Legislature authorized funding for trooper schools that would replace up to 120 soon to be retiring officers in the next fiscal year.  However, the funding for the trooper schools would be subtracted from the estimated savings due to attrition.  The Legislature did provide $10 million in one-time funds to be used as scholarships and salary assistance for police academy recruits.  They also provided funds to increase security at the Capitol and state offices, as well as to increase the public safety officer death/disability benefit from $25,000 to $50,000.
 
Technology, Management and Budget
DTMB will see the elimination of $350 million in one-time funds, with the bulk of that ($286 million) coming from the Make it in Michigan program.  New programs include $2.3 million to improve accessibility and language access to the michigan.gov website, and $1.6 million dedicated to improving customer service in the Office of Retirement Services.
 
Transportation
The largest increase percentage-wise in the MDOT budget will be for public transportation operations and capital funds.  Even with the removal of $400 million in one-time funding, the department will receive a 2.7% increase in gross appropriations.  This will account for only 4 new FTEs as the bulk of the funds are for passthroughs to local road and transit agencies.  The Legislature also added funds for maintenance and operations of the Blue Water Bridge.
 
Treasury
In addition to the elimination of approximately $100 million in one-time funding, the Department of Treasury also received a reduction due to the transfer of the Student Financial Assistance and Dual Enrollment Payments programs to the MiLEAP.  Other parts of the budget remain relatively consistent with the current year.