A deal was reached this week to deal with the $2.2 billion budget shortfall caused by COVID-19 within the current 2019-2020 Fiscal Year budget. The budget agreement was announced by Governor Gretchen Whitmer, Senate Majority Leader Mike Shirkey(R-Clarklake), and Speaker of the House Lee Chatfield (R-Levering). The deal relies on federal COVID-19 relief funding for the following allocations:

• • $512 million for schools
  • $53 million for hazard pay for each teacher as the state battles COVID-19
  • $200 million for universities and community colleges
  • $150 million for local governments

The agreement also includes:

• • Using $350 million from the State Rainy Day Fund
  • $490 million in savings achieved through the state hiring and discretionary spending freezes, layoffs, and other savings within stat government
  • $475 million in public safety costs now eligible for federal coronavirus relief funds
  • $256 million in State Aid reductions to schools
  • $200 million in State Aid reductions to universities and community colleges
  • $97 million in State Aid reductions to local governments
  • $340 million continuation of the enhanced federal Medicaid matching funds, reducing General Fund appropriated for COVID response costs now eligible for federal coronavirus relief funds, and other savings

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In other budget news, Governor Whitmer signed legislation appropriating $880 million in federal funding to support COVID-19 response actions, including:

• • A $2/hour increase for direct care workers
  • $125 million in grant funding to reduce the cost of childcare for families
  • $100 million for hazard pay for local first responders
  • $200 million for local units of government
  • $100 million in small business restart grants
  • $60 million in rental assistance and eviction diversion
  • $25 million for wireless hotspots and enhanced connectivity
  • $18 million for health and safety grants for schools
  • $10 million in MIOSHA grants for protections to keep workers safe on the job
  • $14 million for food banks and domestic violence shelters

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