Michigan’s got the bloated budget blues

Taxpayers get little return from spending increases

Michigan’s government spends a lot more than it used to.

The budget was $58.3 billion prior to the pandemic. Of that, $23.5 billion came from the federal government and $34.4 billion from state taxes, with local and private money making up the difference.

The 2024 budget is up to $80.4 billion: $32.9 billion in federal funding, $47.0 billion from state taxes, and portions from local and private revenue. Spending has increased 16.8% above inflation.

This is down from the current year as temporary federal dollars are spent. Legislators can always increase next year’s budget, though, if they find some more revenue to spend.

They should look to trim spending instead. This budget is bloated with pork projects; lawmakers are spending money from a tax hike of doubtful legality; and the budget is otherwise unsustainable.

Residents should ask a basic question of their elected officials: What did they accomplish with the spike in state spending?

Lawmakers may struggle to answer the question.

Based on Gov. Whitmer’s campaign rhetoric about fixing roads, people might think that the roads are in better shape. Roads are a little bit better. The number of roads in poor quality — at least among the ones that get measured each year — is down from 39% to 33%, according to the Transportation Asset Management Council. However, the long-term projections for road quality are worse, and lawmakers’ goal should be to put roads together faster than they fall apart.

The governor got a boost in money from the federal government that helped a little. She also borrowed from future road funding sources to build up roads, which takes the state further from what ought to be lawmakers’ goal. Despite the increase in revenue available to lawmakers, road funding hasn’t been a priority to them.

Lawmakers spend more on schools. State spending rose from $13.1 billion to $19.3 billion, a 20% increase when adjusted for inflation. The federal government showered conventional public schools with cash during the pandemic and well after.

School districts got more funding but parents and children didn’t get better schools. Fewer students at all levels are meeting basic standards. Detroit Public Schools remains the worst performing city school district in the country even with the shower of extra cash from the state and federal governments. Whitmer vetoed the chance to give parents more options.

Lawmakers have gone on a business subsidy spending spree, having authorized $4.1 billion in new business subsidies this year alone. Handing out big checks to big business is an ineffective way to create jobs, unfair to businesses who don’t get special favors, and expensive to the state budget. It also hasn’t turned the state around. Michigan has the 16th-weakest job recovery among states since the pandemic. Yet the allure of headlines about promised jobs is too tempting to politicians.

In other words, lawmakers spend a lot on intent, but without results. They may intend to improve the economy with subsidies, but it’s not working now, and what they’ve authorized isn’t going to change that. In the same vein, elected officials may want their additional school funding to produce good results, but education outcomes have gotten worse instead. And in areas where lawmakers have stated priorities, like roads, they haven’t accomplished what they’ve intended.

Perhaps this is because too often legislators want to claim success based on their inputs and intentions, rather than on what they accomplish.

Taxpayers haven’t gotten much for the increases in state spending. They ought to ask legislators to focus on results rather than inputs.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.