Advocacy News – June 23, 2023
As the legislature heads into their summer recess, the new democratic leaders have come together to craft their first state budget for the fiscal year 2024. The process begins in February with the Governor’s budget presentation and is statutorily required to conclude prior to July 1 of each year to coincide with the school and local government fiscal year calendars.
The final budget totals $81.7 billion, which is a difference of $5.7 billion from our current year budget and $1 billion more than the Governor’s original budget. This is a mix of both state funds and American Rescue Plan Act federal relief dollars (ARPA). With the passage of this FY24 budget, there is $400 million remaining on the state’s balance sheet between school and general funds, which could be used to offset an economic downturn, additional needs through the remainder of the year, or carried over to the next fiscal year. This budget will take effect Oct. 1, 2023.
The Michigan Chamber was engaged in various facets of the budget to ensure business interests were protected, as well as consistent resources allocated to a variety of workforce programs supporting the talent pipeline in Michigan. Among those include the following:
Workforce and Economic Development
- Going PRO Talent Fund: $54.75 million
- A decrease of $250,000 from the current year. This extremely popular program offers direct reimbursement grants to employers to assist with training, developing, and retaining current and newly hired employees. The Governor included an additional $35 million in ARPA funding, but that investment is not included in the final budget.
- Tri-Share: $3.4 million
- An increase of $900,000 for this collaborative childcare program encouraging private-public partnership with employers, employees, and the state to deliver childcare access to working parents.
- Michigan Reconnect: $65.2 million
- An increase of $10.2 million from the current year to expand this program to 21-year-olds. This is a last dollar scholarship that currently covers in-district community college tuition free for Michiganders 25 and older.
- Digital Workforce Development: $4.9 million
- This is a new program to connect prospective employees with employers, targeting intermediate schools and local business partners. A portion of this appropriation will support a digital platform and expansion of the existing program.
The Governor had a number of employer-related programs to assist with workforce pressures, and through the legislative process they were either eliminated or combined with other programming. Specifically, the Employer Led Collaboratives program was created by the Governor to encourage and allow businesses to come together to create solutions to fill workforce needs in their sector. While this program was not retained in full, it was combined with an appropriation for $15 million for Talent Action Teams under the Michigan Economic Development Corporation (MEDC). This program includes additional opportunities for collaboration with higher education, Michigan Works! Agencies, non-profits, etc. to provide services and workforce training to businesses locating to or expanding in Michigan.
Additionally, the Strategic Outreach and Attraction Reserve (SOAR) Fund, which was developed in 2021 to increase economic growth and expansion in Michigan, was enhanced in the Governor’s budget by creating a corporate income tax capture to supply an ongoing revenue stream of $500 million to the fund. This funding would be readily available for business incentives through the legislative transfer process. While the final budget does not include this tax capture mechanism, it does include placeholders for the SOAR fund to allow future deliberation on long-term restricted revenue.
Environment and Energy
- Critical Mineral Recycling: $5 million
- This new research hub is intended to explore recycling processes for minerals essential to the modern electronic and industrial economy.
- Orphan Oil and Gas Remediation: $53.1 million
- An increase of $10.3 million for this long-standing program seals and remediates abandoned oil and gas wells, and adjacent areas, throughout the state. The additional funding will expand the program and allow two more state employees to administer the expansion.
- Renewable Ready Communities: $30 million
- The Governor created this new program to provide grants to local communities for the creation of renewable energy facilities on a regional scale.
- Environmental Justice Contaminated Site Clean-up: $20 million
- This is a new program proposed by the Governor to investigate, remediate and redevelop contaminated sites in areas identified as environmental justice priorities. While the Governor included this new program for $100 million in her original budget, the legislature included this at a lower, one-time investment.
- Targeted Energy Investment: $150 million
- This new fund is intended to support the re-powering of the Palisades nuclear power plant. Funds will be made available contingent on federal commitments of support to restart the facility.
While the budget process is complete for the upcoming fiscal year, the MI Chamber continues to advocate for a responsible state budget that supports economic growth and does not require increases on taxes or fees. The limited state funding on the balance sheet may pose a risk in the upcoming budget cycle as uncertain economic times may be ahead of us. Please check back often for additional updates and reach out to Becky Burtka at bburtka@michamber.com for more information as needed.