The COVID-19 pandemic has had a tremendous impact on Michigan families, communities and the economy. As a result, it’s also had a huge effect on our state budget.
The Legislature recently passed bipartisan supplemental budget bills to resolve a $2.2 billion deficit through spending cuts, hiring freezes and using a portion of the state’s “rainy day fund” while also directing federal funds to education and vital services that were hit hardest by the cost of COVID-19. Last week, the governor signed these bills into law.
While we have not seen eye-to-eye with the governor on many issues over the last several months, I am proud that we were able to come together on a bipartisan solution to help balance this historic mid-year deficit, all without raises taxes. These were not easy decisions to make, but by working together we were able to get it done.
Prior to the vote, we were facing a historic mid-year deficit. These bills tighten up state spending and use federal money where it will be most effective to help preserve funding for schools and other critical functions of government.
This bipartisan plan will save $936 million by reducing state spending and will direct additional federal COVID-19 funds to cover expenses by schools and local governments affected by the COVID-19 pandemic.
In addition to cutting back state funding, these bills use federal money to help schools offset costs associated with responding to the coronavirus as well as help prepare teachers, parents and students for the future of education in Michigan.
Under the plan, schools will receive federal dollars to cover costs incurred at the end of the last school year and to prepare to safely reopen in the fall. The measures include a net increase of $175 per pupil to help schools address the challenges posed by COVID-19 as we look toward the future of education in Michigan.
The agreement also acknowledges the dedication Michigan teachers have shown to educating our students during this difficult time. They worked endless hours to ensure students were keeping up as we adapted to remote learning and often used their own money to make sure kids continued to get an education. The budget plan includes funding for a $500 one-time hazard bonus for teachers to recognize their hard work to complete the school year.
Every budget is a statement of priorities, and the budget solution reflects our commitment to those most affected by COVID-19. With these bills, we will have sent over $3 billion in federal Coronavirus Relief Funds to schools, businesses, workers and families affected by the pandemic.
With the 2020 deficit now behind us, we now move on to putting together a responsible and balanced budget for fiscal year 2021, which currently is projected to have a shortfall of over $3 billion due to the impact of COVID-19.
This year has challenged our state in many ways, and we will continue to face challenges in the months ahead. The Legislature and governor were able to work together on a bipartisan budget solution that protects Michigan families, and I look forward to the continued partnership as we work through the next budget and a plan for our schools.
Sen. Wayne Schmidt, R-Traverse City, represents the 37th state Senate District, which includes Antrim, Charlevoix, Cheboygan, Chippewa, Emmet, Grand Traverse, Luce and Mackinac counties.