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Published in Economic Development
Gov. Whitmer Gov. Whitmer COURTESY PHOTO

Advocates back infrastructure, talent development, child care spending in Whitmer’s proposed budget

BY Thursday, February 11, 2021 03:39pm

Two statewide advocacy groups representing municipalities support Gov. Gretchen Whitmer’s latest proposed budget that includes spending to cover income tax revenue gaps, increased revenue sharing and infrastructure investments.

Whitmer’s 2022 fiscal year budget plan that was presented to state lawmakers today includes $300 million to repair about 120 local bridges across the state and $330 million in various water infrastructure and resiliency grants.

The spending plan also proposes to increase statutory revenue sharing with municipalities by 2 percent, or about $5 million, and constitutional revenue sharing by roughly $15 million.

“Michigan communities are the heartbeat of our state and we are thankful that that Gov. Whitmer’s budget makes needed investments in revenue sharing, infrastructure and local programs that make our state a great place to live, work and visit,” Westland Mayor and Michigan Municipal League Board President Bill Wild said in a statement. “It is through the provision of high-quality services, the modernization of our infrastructure, and the promotion of a sustainable environment that we will create equitable opportunities for our people, businesses, and communities to thrive.”

While the Michigan Association of Counties also welcomed the increased revenue sharing, organization officials say long-term dedicated funding increases are needed to make up for revenue sharing losses over the past two decades. State revenue sharing is nearly $100 million below 2000 levels when adjusted for inflation, according to the association.

“We need a full partnership with the state to address the funding crunch, similar to what started in 2019 on the Jail and Pre-trial Incarceration Task Force that led to significant improvements in state policy during the last legislature,” Michigan Association of Counties Executive Director Stephan Currie said in a statement.

Whitmer also proposes $70 million in relief for Michigan’s 24 cities with local income taxes — including Battle Creek, Benton Harbor, Big Rapids, Grand Rapids, Walker and Muskegon — that have seen revenues drop under widespread remote working. Grand Rapids officials reportedly expect a $10 million to $20 million loss in income tax revenues this year because of the shift.

Business, child care spending

Whitmer’s budget also includes $5.6 billion in proposed supplemental spending under the administration’s MI COVID Recovery Plan. That proposal released last month includes $225 million for small business relief programs and nearly $200 million for skilled trades training programs.

“Manufacturers are happy to see that Gov. Whitmer’s Fiscal Year 2022 budget recommendation continues to put action behind her call to improve the skills of Michigan’s workforce,” said Michigan Manufacturers Association President and CEO John Walsh. “Investing over $192 million in Michigan Reconnect and Futures for Frontliners and providing over $43 million for the Going PRO Talent Fund will help address the skills gap we need to fill for success in a 21st century global economy.”

However, some business groups and GOP lawmakers have criticized Whitmer’s COVID-19 relief spending proposal, saying it doesn’t spend enough on direct relief for small businesses harmed by pandemic-related restrictions.

Meanwhile, Whitmer is also proposing to spend $370 million to “significantly lower childcare costs and early childhood learning,” the governor during a media call this afternoon.

“This game-changing investment in early learning will provide access to quality, affordable care for 150,000 additional families,” Whitmer said.

The Grand Rapids Area Chamber of Commerce praised the $370 million proposal, which would temporarily increase the income eligibility threshold to waive out-of-pocket copays for child care. Whitmer is also proposing a 10-percent increase in hourly pay for child care providers and to provide $2.2 million for the pilot Tri-Share Child Care Program, which would share child care costs between employers, individuals and the state.

“We are thrilled to see a substantial increased investment in our child care industry,” said Grand Rapids Chamber Director of Government Affairs Alexa Kramer. “We know that our economic success is reliant on our child care providers who have continued to step up to provide a safe environment for our children.”

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