4 proposals that were cut from Michigan’s budget and 1 controversial agency that survived the cuts • Michigan Advance
After several attempts, the Democratic-controlled Michigan legislature wrapped up last week worked on the budget for fiscal year 2025.
Most of the attention was focused on education funding, with Republicans Objecting to changes in the The Michigan Public School Employees’ Retirement System (MPSERS) and some Democrats complained that the accompanying bill was not forwarded to the Senate before it adjourned its session until July 30. Lawmakers also took a different approach to Governor Gretchen Whitmer’s key proposals for free preschool and community college attendance.
However, there were several other significant developments in other areas of the $83 billion budget for fiscal year 2025, which is set to take effect on October 1.
Here’s our look at four proposals that fell by the wayside, and one agency that ended up receiving full funding despite concerns about partisan affiliation.
Opt-out for leisure passes
In her fiscal year 2025 budget proposal, Whitmer proposed changing the state’s recreational pass program from the current opt-in system to an opt-out program, reigniting a debate from when the program was first introduced.
The Recreation Pass program was created in 2010 as part of a bipartisan initiative led by then-Senator Patty Birkholz (R-Saugatuck) to support Michigan’s state parks, which had been neglected and underfunded during the state’s decade-long recession.
While the legislation that created the program uses the current opt-in approach, Other version would have required Michigan residents to waive the fee when renewing their driver’s licenses.
A recreational pass currently costs $14 for vehicles and $7 for motorcycles and mopeds.
According to the State Budget Office, switching to an opt-out system would have brought the state an estimated $21 million in additional revenue. Some Republicans expressed concerns about the changewith state Rep. Ken Borton (R-Gaylord), vice minority leader of the House Appropriations Committee’s Subcommittee on Agriculture, Rural Development and Natural Resources, calling the proposal “a tax on people who aren’t paying attention.”
The Senate agreed with Whitmer’s proposal to allocate the additional revenue generated by switching to an opt-out system, but the final budget proposal did not include this potential revenue source.
Although lawmakers in both the House of Representatives and the Senate have introduced bills to amend state law to provide an opt-out option for the recreational pass fee, neither proposal has been released by the respective committees.
Increase in landfill fees
The House and Senate initially disagreed on whether to include another revenue source proposed by the governor, ultimately ruling out the proposed $80 million for environmental cleanup and recycling initiatives that would be generated by increasing state landfill fees.
A Information on the proposal of the State Budget Office stated that Michigan faces the problem of a significant amount of out-of-state garbage being dumped into landfills in the state. Out-of-state garbage accounts for 25% of all Michigan garbage annually.
To address these concerns, Whitmer proposed increasing the state’s landfill fee from $0.36 to $5 per ton, compared to $4.75 per ton in neighboring states like Ohio and $13 per ton in Wisconsin.
Republicans and business associations across the state spoke out against the proposed increase, with some criticized it as an increase in the “garbage tax”.
Although the proposal was not included in the budget bills originally passed by the House, Rep. Rachel Hood (D-Grand Rapids), chair of the Appropriations Subcommittee on Environment, Great Lakes and Energy (EGLE), told reporters that more work is needed to ensure the proposal works as intended.
Although the Senate had approved the proposed tipping fee increase in its version of the EGLE budget, Senator Jeff Irwin (D-Ann Arbor), chairman of the Senate EGLE Subcommittee on Budgetary Affairs, said another bill would have been needed to pass the fee increase.
“I don’t see how that could have been included, given the fact that we haven’t passed the bill yet and until we do or can, we’ll really be talking about next year’s budget,” Irwin said.
Irwin said he hoped the conversation would continue, pointing to Policy introduced by Rep. Reggie Miller (Van Buren Twp.) last fall, which would increase the tipping fee to $0.72. The state treasurer would adjust the fee every five years beginning in 2029 to reflect the cumulative percentage change in the consumer price index over the most recent five-year period for which data are available.
Vehicle discounts
Whitmer announced the “MI Vehicle Rebate” plan in December, calls for $25 million in the next budget to boost auto sales in Michigan.
The money would have allowed the state to offer a tax credit to reduce the cost of a new electric, hybrid or conventional vehicle by $1,000 to $2,500 per vehicle. Combined with a $7,500 federal incentiveWhitmer’s office said Michigan residents could have saved up to $10,000.
However, the funding never made it past a House budget subcommittee and was not included in the House of Representatives budget passed in May.
It was the third year in a row that Whitmer had proposed incentives to increase auto sales, which would boost a key industry in the state.
In her Plan for the 2024 financial yearshe demanded $48.4 million for a temporary “exemption from sales and use tax on the purchase of electric vehicles”, while in the Budget for the 2023 financial yearWhitmer requested $50 million to provide a $2,000 rebate on the purchase of a new electric vehicle. These plans were also ultimately rejected by Parliament.
Revenue sharing fund
Another proposal that failed to pass the budget process was a plan to create a revenue-sharing trust fund for Michigan municipalities, which would have provided their own source of revenue.
This plan, which is included in the House bills 4274 And 4275would have established a revenue-sharing trust fund that would receive its revenue by allocating “at least 8% of the money raised and collected from the 4% (state) sales tax,” which the bipartisan House Fiscal Agency expected would bring in more than $601 million.
The municipalities had pushed for this reform because they did not want to change the statutory revenue distribution, which is subject to the annual budget procedure. Decline since 2001.
However, this plan was never taken up by the state Senate. Instead, the legislature decided $75 million was allocated for a revenue distribution trust fund and another $75 million was allocated to establish a public safety trust fund for cities, villages and towns. In total Revenue sharing for cities, towns and villages was increased by $34.2 million, and for counties by $20.7 million.
While the basic increase in funds is being Michigan Municipal League and that Mayors of the city centres from Michigan, Stephan Currie, executive director of the Michigan Association of Counties, was less enthusiastic.
While Currie expressed his appreciation for the increase and was “grateful for the hard work the subcommittee chairs put into the budget,” he added that the question of long-term funding remains.
“Counties still need the security of a revenue-sharing trust fund. Our members are facing rising costs and increasing challenges in hiring and retaining employees who adequately serve the public,” Currie said. “For many months, MAC has been working with cities, villages and townships on a plan to establish a special state account funded with a percentage of the state sales tax. This would provide a growth factor and stability for local governments that rely on revenue sharing. We look forward to the legislature returning to this reform in the fall.”
Auditor General’s budget
The budget for the fiscal year beginning October 1 will not include what Michigan Auditor Doug Ringler said in March would mean a nearly 30% cut in his department’s budget, based on Governor Gretchen Whitmer’s proposed spending plan.
This $80.7 billion proposal inserted a $100 placeholder into the Office of Auditor General (OAG) budget line item, which previously listed 23 interdepartmental grants (IDGs) and 13 appropriations from special revenue funds.
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The potential loss of those funds, which Ringler said would “significantly impair” the agency’s oversight function, came at a time when criticism was growing that the OAG had lost its nonpartisan status.
In particular, Democrats criticized the audits conducted during Whitmer’s first term as governor, which they said misled the public. Unemployment Insurance Agency (UIA)and on the other hand a Report on deaths in long-term care facilities in the first year of the pandemic, which the Democrats comply with the wishes of the Republicans.
More recently, the Advance payment reported in March that emails revealed that an OAG The audit of the 2020 election came at the request of a Republican member of the House of Representatives, but only after Ringler helped draft the request in a series of previously secret meetings with GOP staff.
Ringler strongly denied the allegation that his agency had been biased in carrying out its statutory oversight function.
Regardless of the Collective Law that funded the legislative branch, which includes the OAG, included grants and revenues. In fact, the gross appropriation for the OAG increased from $29.8 million in fiscal year 2024 to $31.3 million in fiscal year 2025.
Advance payment Editor Susan J. Demas contributed to this story.
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