Last night Governor Gretchen Whitmer, Senate Majority Leader Mike Shirkey and House Speaker Lee Chatfield announced they reached a bipartisan budget agreement to fill the $2.2 billion hole in the Fiscal Year (FY) 2020 budget. The revised budget agreement does not involve any new tax increases on businesses or individuals.
The budget deal calls for state government to find $490 million in cuts to the current (FY 2020) budget through state hiring and spending freezes, layoffs and otherwise. It also calls for $350 million to be used from the state's $1 billion rainy day fund. The rest of the $2.2 billion hole would be filled using federal CARES Act money.
While this is still just the framework of a plan, and leaders have yet to settle on how to deal with the FY 2021 budget which starts on Oct. 1, the Michigan Chamber is encouraged that there is a tentative agreement on the FY 2020 budget. Furthermore, we are encouraged that lawmakers agreed to a mix of spending cuts and allocation of federal dollars, rather than jumping into a debate over who should be taxed more to make up for the shortfall.
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