This week, a number of budgets were reported by the House and Senate Appropriations Committees. Following the latest movement, there remains many notable items of differences between the two chambers and the legislature and the administration. The key decision makers will continue to negotiate the items within the budgets in order to finalize them prior to the beginning of the next fiscal year, which begins on October 1, 2022.

One of the key points of differences centers around setting aside funding for a proposed tax cut. The Senate included $2 billion in their budget; half of which is one-time funding and half is ongoing funding. While the House included $1 billion for the proposal. However, there aren’t details on the proposed tax cut, as negotiations are ongoing between the legislature and the administration. Additionally, there are differences on how much of an increase to provide in operations funding to the state’s public universities and community colleges. The Senate Appropriations Committee adopted an amendment prior to reporting the bill providing a 5% one-time increase and a 5% ongoing increase. This increase matches what Governor Gretchen Whitmer had called for but is higher than the increase the House is proposing. For K-12 funding, the House and Senate both agree to raise per-pupil funding, but the House is proposing an increase to $9,000 while the Senate passed a level of $9,135. As the state works with higher than projected revenue, and an influx of Federal relief dollars that remain unspent, these are only a few of the many items that will need to be reconciled.

The Senate has stated they intend to vote on budget bills next week, the House is likely to follow a similar timeframe in the upcoming weeks. After that, the budgets will be sent to conference committees to allow bicameral, and bipartisan groups to hash out the differences and develop budgets that both chambers can pass. The biannual Consensus Revenue Estimating Conference is scheduled for Friday, May 20, where updated revenue projections will be agreed upon. The legislature will use those figures to finalize the numbers within the budget, in order to pass the budgets and send to Governor Whitmer for her consideration.

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