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Michigan’s 2024 budget will spend all but 3% of state’s $9B surplus

Whitmer has requested a record $79B budget for 2023-24

If the 2023-2024 Michigan budget passes as recommended by Gov. Gretchen Whitmer, the state will spend all but $250 million of its $9 billion surplus, budget director Christopher Harkins said Wednesday.

“When we make changes to our tax code, and we make sure that we reinvest in our in our people and put money back in their pockets, that’s a direct impact on our resources,” Harkins said Wednesday, answering a lawmaker’s question.

“This budget recommendation leaves about $250 million on the balance sheet, between both the general fund and the School Aid Fund, at the end of fiscal year ‘24,” Harkins added.

In a 62-page document, the governor’s budget recommendation never mentions the word “surplus” once.

Harkins spoke before the appropriations committees of the Michigan House and Senate, delivering Whitmer’s 2024 budget recommendations. Whitmer recommends a $79 billion budget, whose single biggest source of revenue is federal dollars. Federal money will account for 41% of Michigan’s 2024 budget, according to the executive summary.

The governor recommends spending the surplus now instead of increasing the upcoming year’s budget. For instance, Whitmer recommends spending $44 million more on community colleges in the upcoming fiscal year, and about $215 million on increasing current year community college spending.

James Hohman, director of fiscal policy at the Mackinac Center, described this as “an imprudent way to do budgeting.”

“There has been a tendency among our lawmakers to spend every dollar they have available,” Hohman told CapCon. “You shouldn’t just ratchet up spending because you’ve got money.”

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.