Michigan Senate dips into rainy day fund for $88 billion budget plan

LANSING, Mich. — The Michigan Senate approved an $88 billion budget plan this week, seeking investments in education and Selfridge Air National Guard Base, while also making a withdrawal from the state's rainy day fund.

The Democrat-led Senate voted, along party lines, 19-18 in favor of two budget bills on Thursday. The Republican-controlled House signed off on its own proposal with less spending and more drastic cuts to programs a week earlier.

Now, the two sides of the Legislature will attempt to negotiate a compromise. In a statement, Senate Majority Leader Winnie Brinks, D-Grand Rapids, said Senate Democrats were attempting to bring "economic relief and stability."

"We’re ready to work across the aisle and across chambers to get a responsible, bipartisan budget done on time that delivers the relief our communities are depending on," Brinks said.

Last year, the House and Senate missed their self-imposed July 1 deadline for approving a budget and then didn't agree to a final plan until after the new fiscal year began on Oct. 1.

There's additional timing pressure this year because some lawmakers want to quickly invest $152 million into expanding the runway at Selfridge in Macomb County to help secure a fighter mission that was previously announced by Republican President Donald Trump.

The House previously approved a bill with $152 million for Selfridge. The Senate on Thursday approved a broader spending bill with the money for Selfridge, funding or a variety of other projects and a $350 million withdrawal from the rainy day fund, the state's primary savings account.

The Senate bill is tied to the Senate's broader budget plan for next year, meaning the spending bill can only become law if the budget does.

Republicans, including Senate Minority Leader Aric Nesbitt of Porter Township, criticized the maneuvers, saying they were delaying crucial funding for the base.

On the larger budget, Nesbitt and Republicans slammed the idea of withdrawing from the rainy day fund as unnecessary.

"State spending under Gov. Whitmer has exploded by 50%, $30 billion over the last seven years," said Nesbitt, who's a GOP candidate for governor. "Families’ incomes have not, yet Democrats can’t stop treating taxpayer money like it’s theirs to burn."

Michigan's current budget, covering the year that ends on Sept. 30, amounts to about $84 billion in spending, according to the nonprofit Citizens Research Council of Michigan.

Nesbitt and other Republicans blasted a line in one of the Senate budget bills that appeared to authorize the construction of a $25 million new park near the Capitol in downtown Lansing.

On education, the Senate proposed a 4% increase in operations funding for universities and community colleges and a new, long-term weighted funding formula for K-12 schools that would direct an increasing share of tax dollars to districts with large numbers of students living in poverty or who don't speak English at home.

Meanwhile, the state House is seeking a 27% decrease in operations funding for Michigan's universities.

The Senate's $22.0 billion plan for K-12 education is also bigger than the House's $21.5 billion offering. Sen. Darrin Camilleri, D-Trenton, promoted the Senate's funding push for at-risk students and for literacy initiatives.

"This budget is going to be a statement that we know can create a brighter future for kids like mine," Camilleri said.

However, Sen. Thomas Albert, R-Lowell, said the Senate Democratic plan made the "same old mistakes."

"Sure, this budget spends more money for K-12 schools," Albert said. "We spend more money every year with the School Aid budget in Michigan.

"I'm not opposed to funding education, but what I do oppose is spending money without accountability for students or taxpayers."

Another difference between the plans advancing in Lansing is in the rainy day fund. While the Senate is seeking a $350 million withdrawal, the House had proposed lapsing $300 million into the fund.

In February, Whitmer, the Democratic governor, initially proposed a $400 million withdrawal as part of her own budget plan.

Michigan's Budget and Economic Stabilization Fund, often referred to as the rainy day fund, had about $2.2 billion available in it, as of February.

The state's financial picture has become more uncertain after a string of years with large surpluses.

Health care costs have jumped, lawmakers have dedicated more tax dollars to roads, and the federal government is forcing states to pay for a larger share of costs associated with food assistance for low-income families.

Yet, the Senate didn't include in its plan an array of fee and tax increases that Whitmer's administration put on the table earlier this year, like a new tax hike on vaping products or another on digital advertising.

The Senate made cuts in some areas of the budget, like a 4.3% reduction for correctional facilities, amounting to $50 million in savings, according to the nonpartisan Senate Fiscal Agency.

The Senate budget also included $2 million in one-time spending for the Attorney General's office for utility rate cases, amid a surge in electricity rate hikes, and $43 million to support election equipment upgrades.

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(Staff Writer Beth LeBlanc contributed.)

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