LANSING, Mich. — State Sen. Jon Bumstead on Wednesday supported 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.
“The COVID-19 pandemic has taken a huge toll on our economy and the state’s budget,” said Bumstead, R-Newaygo. “This year has challenged our state, and this bipartisan solution will address the unprecedented budget shortfall resulting from the COVID-19 pandemic while also protecting Michigan families, schools and communities.”
The 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 due to the virus, including:
- $555 million for schools;
- $200 million for universities and community colleges; and
- $350 million for local governments.
“With these bills, we will have sent over $3 billion in federal Coronavirus Relief Funds to businesses, workers and families affected by the pandemic,” Bumstead said. “The measures also 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.”
Additionally, local governments will receive funding to help offset their response throughout the COVID-19 pandemic. On top of increased costs as a result of the coronavirus, communities throughout the state did not receive their final revenue-sharing payment from the state. Included in this supplemental is additional funding to help alleviate that setback. When factoring in the missed revenue-sharing payment, local governments across the state will still experience a net increase in overall funding of over $250 million as a result of this package and Public Act 123 of 2020.
“This budget reflects our commitment to schools and local governments by directing federal COVID-19 funds to cover additional expenses that came as a result of the pandemic,” Bumstead said.
As part of the agreement, the Senate Appropriations Committee approved an executive order from the governor to reduce current-year spending. Most state agencies will see reductions, including the executive and legislative budgets.
The budget plan also uses $350 million from the state’s rainy day fund to support funding for critical programs, leaving approximately $800 million in the state’s savings.
“Over the past eight years, I have supported continuous investments in the state’s rainy day fund, increasing the state’s savings to over $1 billion,” Bumstead said. “I support the Legislature making investments in the future once our economy recovers to increase the balance and replace what we’ve used in responding to this emergency.”
Bumstead called the agreement a much-needed move as the state continues its response to the coronavirus.
“The Legislature and governor were able to work together during COVID-19 restrictions on a plan that protects Michigan families and uses crucial federal funding to aid those in need during this difficult time,” Bumstead said. “As vice chair of the Senate Committee on Appropriations, I will continue to work with my colleagues to maintain a responsible state budget.
“The Legislature will continue to work with the governor on all matters related to COVID-19 — just as we have with solving the budget deficit — and we look forward to the continued partnership and mutual respect of co-equal branches of government.”
Senate Bill 373 and House Bill 5265 now head to the governor to be signed.