The final fiscal year (FY) 2024-2025 budget agreement comes on the heels of last year’s historic, transformational state budget, which focused on kitchen table issues, helped families’ wallets stretch a little further and provided Michigan children with better access to opportunity. That budget was injected with powerful, pandemic-era federal investments, most of which were one-time funds. This latest budget does a lot for Michiganders, but there is certainly a gap to fill. Now, with Michigan’s poverty rate still the 13th highest in the nation and rising in over half of Michigan counties, bold action continues to be necessary to support children, families and workers in the state.

The starting point for the final budget agreement came out of the May Consensus Revenue Estimating Conference. The May Conference showed that the state is well on its way to returning to a “new normal.” The economy is stable, with a lot of the same risks that have been discussed at the past few conferences, and revenues are largely on pace with expectations. General Fund/General Purpose (also commonly referred to as General Fund, or GF/GP)-related taxes are coming in slightly ahead of anticipated, but School Aid Fund (SAF)-related taxes are coming in slightly below projections. Overall, net revenues were adjusted slightly upward, with General Fund upward adjustments more than fully offsetting SAF downward adjustments.

Revenue estimates indicate stable economy and slight growth, but School Aid Fund less strong

Source: Consensus Revenue Estimating Conference, May 2024

The final budget agreement, which was passed by the Legislature early on June 27, 2024 and signed by the governor on July 23, 2024 (School Omnibus) and July 24, 2024 (General Fund Omnibus), contains the details of the plan to allocate the state’s resources for the FY 2024-2025 budget year, which begins on Oct. 1, 2024 and ends on September 30, 2025. The final budget includes $81.2 billion in total spending from state and federal sources. About $18.6 billion of SAF dollars are spent across pre-K-12 schools, community colleges, and colleges and universities. Spending from the state’s General Fund—the portion of the budget over which lawmakers have the most control—is expected to be $14.9 billion. Federal funds continue to make up the largest portion of the state budget at nearly $33.9 billion or 41.7% of the state budget.

Budget funding blend remains on trend

Source: MLPP analysis of HB 5507 (H-1) CR-1 and SB 747 (S-1) CR-1, as enrolled

As has been the case in past budgets, the vast majority (80.4%) of the overall state budget supports health and human services, education—including child care, preK, K-12 and postsecondary education—and public safety. The same is true for the state’s General Fund budget, with 79.1% of the budget allocated to these three core categories. Overall, health and human services, which provides funding for Michiganders’ basic needs like healthcare, basic cash assistance, food assistance, child welfare, and behavioral health supports, remains the largest department in both overall funds and General Fund appropriations.

Health and Human Services, Education and Public Safety make up about 80% of the total budget

Source: MLPP analysis of HB 5507 (H-1) CR-1 and SB 747 (S-1) CR-1, as enrolled

The final budget allocates nearly all of available one-time and ongoing funds. Based on the final budget agreement, our state General Fund would end the 2025 budget year with only $319.3 million on the balance sheet, and our state School Aid Fund would end the year with only $30.8 million on the balance sheet. These figures do create some hesitancy as a mild economic downturn, small tax reduction or any other change affecting revenues could easily result in a midyear deficit or shortfall. Additionally, Michigan triggered a personal income tax rate reduction from 4.25% to 4.05% in 2023, and the fact that the state ruled it a one-time reduction, resulting in a reversion to 4.25% for 2024, is currently being litigated and pending before the Michigan Supreme Court. The results of this court case could have an impact on Michigan’s near and long-term revenues.

As Michiganders, we all deserve strong schools, attainable housing, safe drinking water, affordable healthcare, and economic security. The state budget provides an opportunity to improve access to the services that Michigan people—kids, workers, and families—need and rely on.

Michigan’s earliest learners deserve the opportunity to start their educational journey on the best path. At the same time, parents rely on our early childhood education systems, including child care and pre-K programs, to ensure their children are kept safe and are well taken care of while they work or go to school. Michigan’s state budget helps families with low and moderate incomes afford child care and preschool programs as well as funds other early childhood programs, and the state is incrementally pushing forward with the goal of providing universal access to state-funded preschool programs, regardless of income. However, there is a concern that this will destabilize our early childhood system, especially our child care providers, potentially increasing costs on our families with the youngest children and making access for families with low incomes more difficult. While the final 2024-2025 budget recommends expanding eligibility for state-funded preschool and improving access to child care assistance, more work needs to be done to fully address the cost of caring for and educating our youngest learners.

Please note, most of the programs below are administered by the Michigan Department of Lifelong Education, Advancement, and Potential (MiLEAP) but may also receive funding through the School Aid budget (K-12). Where there are differences, the department or budget is included within the proposed investment.

Child Care
Michigan’s child care scholarship program provides support to help families with low to moderate incomes cover part of their child care costs. Families are initially eligible for the subsidy if they make under 200% of the federal poverty level (about $62,400 for a family of four) and need child care because they work or go to school. The state then reimburses providers, with rates determined by the child age, the facility (center, group home or family home) and the provider’s quality. Unfortunately, due to barriers such as unaffordable care, unavailable care, providers not taking kids with subsidies, and other administrative barriers, many families who are eligible for child care assistance still cannot access it.

About 57% of eligible and approved children under age 5 are receiving child care scholarships

Michigan Department of Health and Human Services, Special Request, 2022

The final budget does the following to support child care:
(Funding marked with a ★ was included in the League’s People’s Budget recommendations)

★Increases reimbursements for providers by 15%. During the COVID-19 pandemic, increased federal aid allowed the state to temporarily boost reimbursement rates paid to providers caring for kids with subsidies. This funding ran out in October 2023. While rates to providers are still higher than pre-pandemic levels, the removal of the temporary funding resulted in 20-25% cuts in rates, resulting in budget instability and potential wage cuts, private pay rate increases, and closure of slots and/or rooms which disproportionately impact infants and toddlers who need the most care. The final budget includes $65.1 million to increase child care provider reimbursement rates by 15% over current-year levels. This falls between the governor’s recommendation of a 10% increase and those proposed by the House and Senate budgets (20%). (MiLEAP)

Helps ensure child care facilities are safe for the children they serve. Families need the assurance that the child care facility they choose is providing quality and safe care for their children. In alignment with the governor’s budget recommendation, the final MiLEAP budget includes the following investments:

• • • $4.8 million to increase the number of staff who inspect child care facilities;
    • $500,000 to provide technical assistance and supplies to ensure safe drinking water; and
    • $4 million to support Family Child Care Networks, which provide support to home-based providers.

What’s missing?

Reimbursement rates for providers are still well below pandemic-era levels. The 15% increase in reimbursement rates will go a long way toward helping improve access, affordability and quality, but rates remain below pandemic-era levels. The state is currently working on updating its market rate study, and this information will be helpful in determining whether we are meeting reimbursement rate goals and standards. However, Michigan should base reimbursement rates on the true cost of care, to allow child care workers to receive a living wage and other employment benefits.

A comprehensive strategy to address the early childhood workforce shortage. Michigan’s child care industry—overwhelmingly women and often women of color—is one of the most undervalued sectors of the workforce, and Michigan is facing a crisis-level workforce shortage. Wages are one of the main reasons contributing to the shortage; a caretaker working full time (2,080 hours a year) at the median hourly wage of just under $14 makes only $28,860 a year, far less than their early childhood education peers. Additionally, many do not qualify for other workforce benefits, such as retirement or healthcare. The governor’s budget had included a three-year pilot to provide automatic eligibility for child care workers, but it was ultimately not included in the final agreement.

Child care workers are paid far less than any other early childhood educator

Source: Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2023.

State-funded Preschool (Great Start Readiness Program)
During Gov. Gretchen Whitmer’s 2023 State of the State address, she proposed moving the state toward universal state-funded preschool programs for all Michigan 4-year-olds by the end of her second term (by the 2026-2027 budget). However, this must be done in a strategic way to not exacerbate the early childhood workforce crisis and to not destabilize our early childhood education and care system for families. The current budget took the initial step by expanding our Great Start Readiness Program (GSRP), which provides state-funded Pre-K programs at no cost for some Michigan families. While at her 2024 State of the State, the governor called to move up the deadline to make free, state-funded preschool available for all Michigan families two years early, and the final budget agreement continues to take incremental steps toward universal Pre-K. The final School Aid (K-12) budget includes an $85 million increase to GSRP, and anticipates the program will be able to serve an additional 5,000 children. 

The final budget does the following to support preschool:

Increases income eligibility for GSRP to 400% of the federal poverty level (FPL). Currently, families with children under 300% FPL (or $93,600 for a family of four) are eligible for GSRP; and Pre-K programs that are already serving all eligible children and still have slots left can enroll children living in families with incomes up to 400% FPL. The final budget agreement increases this to 400% FPL, or $124,800 for a family of four.

Increases the per-child allocation. The final budget increases the per-child allocation from $9,608 to $10,185 for a full-day program (from $4,804 to $5,093 for a part-day program). This represents an approximately 6% increase over the current budget, and is 6% higher than the K-12 per-student foundation allowance amounts, which were held flat. The governor’s budget also recommends increasing the per-child allocation for the extended day program by 5%, from $11,530 to $12,222. These amounts fall between the governor’s and House recommendations and that proposed by the Senate. 

Creates new classrooms and expands providers. The budget agreement includes $25 million in one-time funds–less than the governor’s $35 million recommendation–to open new classrooms in underserved areas. The funding would be used to provide grants of up to $25,000 for each new or expanded GSRP classroom for costs associated with attracting, recruiting, retaining, and licensing required staff; supporting facility improvements or purchasing necessary facility space; outreach material for public awareness; and improving a provider’s rating.

Maintains funding for transportation The budget continues an $18 million investment in transportation to help preschool students in GSRP classrooms get to school.

Community Based Organizations (CBOs) remain an integral part of Pre-K programs. TThe final budget maintains current law with regard to how CBOs participate in our state-funded Pre-K program. The House budget proposal had included language that would have made it difficult for CBOs to participate in the state-funded Pre-K system. CBOs, including Head Start agencies, community action agencies and community service agencies, along with for-profit child care providers, have been an important part of our Great Start Readiness Program for decades. The House proposal would have eliminated a decade-old provision requiring an attempt to have 30% of slots provided through CBOs and would have eliminated the ability of CBOs to qualify for start up and expansion grants. This would result in inequitable expansion of GSRP, as different Intermediate School Districts (ISDs) provide their programs differently. One ISD in the Upper Peninsula provides state-funded Pre-K solely through its school system, while another ISD in northeast Michigan operates its program almost completely through CBOs. Making it difficult for CBOs to access funding for Pre-K would have created disparities between our existing systems.

Additional Supports for Early Education and Care
A child’s educational journey begins before they set foot in a classroom, and children of all ages need support in order to start off on the right path. 

The final budget does the following to support additional education and care:

Increases funding for Early On. Early On helps identify and provide interventions for infants and toddlers, birth to age 3, who have developmental delays or disabilities. The final budget increased funding for Early On by $1.4 million, totaling $23.7 million. This is more than recommended by the governor and Senate, but far less than what was recommended by the House and less than what is needed to adequately fund early intervention programs.

The share of children enrolled in Early On now exceeds pre-pandemic levels

Source: Michigan Department of Education

Flat funding for home visiting programs. The final budget included no increase—maintaining at $3.5 million—for evidence-based home visiting programs that encourage strong family relationships and provide support to those with young children. This is a divergence from all other budget proposals, which had included small increases.

Maintains funding for Great Start Collaboratives (GSCs). GSCs bring together parents, caregivers, and community leaders and organizations to help strengthen the early childhood system and expand efforts to enroll families in early childhood education. The GSCs receive funding to provide this support through the Early Childhood Block Grants. The final budget includes flat funding, at $15.9 million.

Providing a high-quality education to all students gives our children the best chance for success in life beyond school. However, decades of disinvestment has resulted in Michigan falling from a top-ranked state for educational outcomes to one of the lowest in the nation. The most recent  national KIDS COUNT® Data Book ranked Michigan 41st in education, the state’s lowest indicator ranking. In the 2023 school year, 60% of third-grade students tested below proficiency in reading, a key indicator of future academic success. While the fiscal year (FY) 2024-2025 budget does not provide a foundation allowance increase for all students, it does include funding increases to weights for students who need it most.

The final FY 2024-2025 K-12 budget totals $20.6 billion, a 3.8% decrease from the current year budget. The decrease is largely attributed to the loss of a large one-time surplus that helped boost the current year budget. Additionally, a number of the significant changes made between the various budget proposals and the final budget can be attributed to how each reallocated dollars that were formerly used to pay off a debt on the educator retirement healthcare fund (Michigan Public School Employees’ Retirement or MPSERS, Other Post-Employment Benefits or OPEB, Pension Unfunded Actuarial Accrued Liability or UAAL). 

Funding Shifts to Michigan’s K-12 Budget Framework

Weighted School Funding Formula
The majority of funding for school districts comes from the foundation allowance, which provides a per-pupil payment to all districts. However, we know that equal funding for all districts leads to inequities. Therefore, the state has been moving towards a weighted funding system that provides an additional percentage of the per-pupil dollar amount for students who require more services for an adequate education.

The final budget does the following to support weighted funding:

Maintains the FY 2023-2024 foundation allowance at $9,608 per pupil. The budget does not increase the base foundation, but rather reduces the amount of money schools have to spend on MPSERS, therefore increasing the dollars they are able to spend in the classroom (see “Note on MPSERS” above).

• Maintains the cyber schools foundation at $9,150 per pupil.
• A one-time, $57 million payment distributed on a per-pupil basis to public school academies (PSAs), often called charter schools. This payment equals 3.9% of their foundation allowance. This payment excludes PSAs that participate in MPSERS. The rationale behind this is that PSAs not participating in MPSERS will see no benefit from a flat foundation allowance or benefit from the change made to MPSERS. Without this payment, their per-pupil funding would remain flat or lower due to increased costs.

Provides an 8.7% increase for “at-risk” funding. Last year, Michigan became one of the first 10 states to enact an Opportunity Index. The goal of the Opportunity Index is to provide every school district a payment of 35-47% of the foundation allowance, with districts experiencing higher concentrations receiving more funding for every student eligible for “at-risk” funding. However, because appropriations are insufficient to meet the goal, payments are prorated. Schools will receive between 12.4-16.7% of the foundation allowance per eligible pupil.

• The budget provides an additional $83 million for the Opportunity Index and gives more flexibility for how the funds can be spent for districts experiencing the highest concentrations of poverty.
• The budget does not include the governor’s recommendation of a $90 million competitive grant program for students experiencing high poverty to be used on academic, social-emotional and physical needs. 

Increases special education expenditures by 16.7% million for a total of $2.6 billion. This will again provide districts with the full foundation allowance and required cost reimbursement payments.

• The budget does not include a new formula to fix the inequities in special education funding between Intermediate School Districts (ISDs) despite being in the governor’s budget as well as versions passed by the House and Senate.

Increases funding for English language learners. A 26% increase was achieved through the following tiered formula: $1,863 (a $387 per-pupil increase) for students with the lowest English language proficiency as determined by the WIDA Access assessment (1.0-1.9); $1,286 (a $267 per-pupil increase) for students with moderate English proficiency (2.0-2.9); and $210 (a $43 per-pupil increase) for students with the greatest English language proficiency scores (3.0-3.9). 

Increases funding for isolated and rural districts. A 6.1% boost was provided here, which is slightly lower than the governor’s recommendation.

Academic Interventions and Support to Ensure Students are Reading at Grade Level
Reading at grade level by the time students exit third grade is a key indicator for future success, both during and after K-12 schooling. During the pandemic disruptions, Michigan students’ reading scores fell from being just above the national average to the 45th percentile, and they have not since recovered. Students who are economically disadvantaged are performing about 20 percentile points below students who are not economically disadvantaged, furthering the need for academic support for these students. 

Disparity in reading scores highlights need for more resources, supports for students who are economically disadvantaged

Source: Epic Ed Policy

The final budget does the following to invest in early literacy interventions and additional supports:

Extends spending deadline for MI Kids Back on Track Program. The FY 24 budget allocated $150 million for learning loss recovery. Although the funding was not renewed, schools now have the ability to keep using the funds until the fall of 2027.

Creates new funding of $87 million to create a committee for literacy achievement and implement improved instructional practices. The governor’s budget recommended $155 million for this purpose.

Invests $82.9 million to improve early literacy. This includes $42 million for hiring literacy coaches at Intermediate School Districts to assist teachers and students in reaching grade-level reading by the end of third grade.

Student Health and School Safety
Schools are not only tasked with educating our children, but they also often provide important physical and mental health support and services. When students feel safe and connected to their schools, they are more likely experience positive outcomes including: fewer sexual partners and STD diagnoses; reduced emotional distress and suicidal ideation; lower likelihood of being a victim of or committing violence; less prescription drug use; and higher likelihood of attending and graduating from college.

The final budget does the following to invest in student mental health.

Invests $200 million to continue offering public schools the option to provide free breakfast and lunch to all students. For the 2023-2024 school year, the Legislature allocated $100 million ongoing from the School Aid Fund (SAF) and $60 million in a one-time School Meals Reserve Fund to cover all school meal costs that are not reimbursed by the federal government. The new budget includes the governor’s proposal to increase the SAF appropriation by $70 million and add $30 million to the Reserve Fund for the 2024-2025 school year. 

Maintains $107 million for ISD funding for the purpose of hiring mental health professionals. This is in line with the governor’s recommendation, but less than what was proposed by the House and Senate budgets. Additionally, the one-time investment made in the current year for facility upgrades was not extended. 

What’s missing?

Funding was reduced by 92% for per-pupil payments for mental health and school safety. The governor and the house budgets recommended $300 million and the Senate recommended $150 million of funding for this grant. The $25 million in the final budget is a reduction from the $328 million in one-time funds provided in the current year. Additionally, the requirement to spend half of the dollars on student mental health was eliminated. This means that schools won’t have sufficient, ongoing support to hire school psychologists or social workers to support their students and, instead, will likely purchase one-time investments around school safety, such as door locks or other security measures. 

Funding was reduced for the Ten Cents a Meal program, a competitive grant program that provides incentives for school districts and child care centers to purchase Michigan-grown produce. Ideally, funding would have remained at the current level of $9.3 million, but for FY 2024-2025, in concurrence with the governor’s recommendation, the budget includes only $4.5 million ($500,000 General Fund, $4 million SAF). The budget, however, also includes several changes recommended by the governor to make the program more effective, including: increasing the share retained by project partners for data collection, outreach, and training from 1% to 2%; and allowing grantees to use up to 25% of their awards for program-related labor and food transportation costs.

Teacher Recruitment and Retention
Many schools continue to deal with crisis-level teacher shortages, and some schools have had to fill open positions with long-term substitutes or increase class sizes simply to ensure all kids have access to an education.

The final budget makes the following efforts to recruit, support and retain teachers:

Maintains $25 million for the MI Future Educator Fellowship program and $50 million for student teacher stipends. These programs help Michigan college students pursue teaching degrees by offsetting tuition costs and allowing colleges and universities to pay students during their student teaching.

Creates new, one-time funds of $12.5 million to ISDs to partner with a non-profit organization to promote educator talent initiatives.

What’s missing?

The budget eliminated $50 million for mentoring programs to help new educators find the support they need to be successful.

Funding was not provided for the proposed Grow Your Own Programs. The executive, House and Senate budgets all included between $36.8 million and $50 million in one-time funding to help non-credentialed staff working in schools get the education they need to become certified teachers.

Supporting Students Beyond K-12
The final budget:

• Maintains $40.5 million in funds to support adult education programs in line with the governor’s budget.
• Includes $10 million to encourage high school students to file their Free Application for Federal Student Aid (FAFSA).

Flint Water Declaration of Emergency
The final budget:

• Includes funding of $8.1 million for the Flint water emergency; and
• Removes $1 million of one-time funding for the Flint Early Childhood Collaboration.

Earning a postsecondary credential, whether a college degree, an occupational license or a skills certificate, is beneficial for obtaining employment and earning a liveable wage. Additionally, a report from the Lumina Foundation highlights additional health and social benefits linked to degree attainment. As Michigan continues to work towards its Sixty by 30 goal of having 60% of working-aged adults with a postsecondary credential or degree by 2030, degree attainment has risen to 51.1% (as of 2022), but it still lags behind the national average of 54.3%. 

Progress being made toward educational attainment of working-aged adults

Source: Lumina Foundation, A Stronger Nation Report

And even within this progress, disparities exist due to systemic barriers to accessing postsecondary education, tuition or other financial aid as well as other wraparound supports necessary to succeed in college. In Michigan, only about 52.8% of 2022 high school graduates had enrolled in postsecondary education within six months of graduation, but rates were lower for Hispanic or Latino graduates (41.5%) and Black or African American graduates (37.2%). And rates are declining across almost all races and ethnicities.

Barriers make it more difficult for graduates of color to access postsecondary education.
Percentage of students enrolled in postsecondary education within 6 months of graduating high school

Source: Michigan’s Center for Educational Performance and Information (CEPI)
Note: Enrollment data for students identifying as Hispanic/Latino or Two or More Races is not available on CEPI for 2013 and 2014 graduating classes.

Michigan’s 15 public universities and 28 community colleges, its numerous private not-for-profit colleges and universities, and its many occupational skills training programs provide a means for the state’s residents to achieve academic and vocational skills and credentials. It’s an investment in Michigan’s future to provide strong state support for these institutions and programs, for financial aid to make them affordable, and for support services to help ensure student success. Across several departments in the fiscal year (FY) 2024-2025 budget, funding creates strong steps toward helping improve access to a postsecondary education and providing support to colleges and students to help improve enrollment and retention of students; however, problems remain in how the state funds postsecondary educational programs and how much more is needed to invest in young adults to help them achieve success.

The FY 2024-2025 budget totals $462.2 million for community colleges, an $82.3 million or 15.1% decrease over the current year largely due to decreases in state MPSERS payments and the removal of one-time funding. The higher education budget totals $2.3 billion, a $33.2 million or 1.5% increase over the current year. 

Operations
To help support basic operations of Michigan’s community colleges and universities, the final budget includes a 2.5% increase for community college and university operations (1.5% ongoing funding, 1% one-time funding). Increases in operations funding for public colleges and universities will range from a low of 2.1% to a high of 5.2%. Most colleges and universities will see an increase of between 2.1% and 2.7%; however, Lake Superior State University’s 5.2% increase is largely driven by an adjustment in the Indian Tuition Waiver amount. Increases in operations funding for community colleges will range from a low of 2.0% to a high of 3.8%.

Tuition Restraint
Tuition restraint, first enacted in the public universities budget in the FY 2013-2014 budget and in the current year budget for community colleges, is a tool with which the governor and Legislature incentivize limiting tuition increases from year to year. It makes each institution’s operations funding increases contingent on keeping tuition increases within a specific percentage or monetary amount, whichever is greater. 

For the FY 2024-2025 year, the final budget sets the tuition restraint level for both community colleges and universities to be equal to the greater of 4.5% or a specific amount, $703 for universities and $227 for community colleges.

Financial Aid Programs and Additional Support for Students
Michigan’s various financial aid programs help reduce costs for Michigan college students. This can be done through typical financial aid programs that provide direct grants to students or through wraparound supports that help students to remain in college. 

The final budget does the following to support financial aid programs:

Increases investment in the Michigan Achievement Scholarship, including the Community College Guarantee. There is $330 million in funding–a 10% increase–for the Michigan Achievement Scholarship with a Community College Guarantee. The scholarship provides students up to $5,500 a year to cover college costs at a Michigan college or university. The budget includes the Community College Guarantee, expanding last-dollar aid and a $1,000 needs-based stipend for community college students.

Maintains funding for Michigan Reconnect for adults 25 or older. Michigan Reconnect provides last-dollar scholarships to help adult learners 25 and older re-engage with higher education to earn a Pell-eligible associate degree or skills-based certificate. The final budget recommends $52 million for Michigan Reconnect.

Increases the Tuition Incentive Program. The Tuition Incentive Program (TIP) pays students’ tuition costs in their entirety for associate degree coursework and up to $2,000 for bachelor’s degree coursework. TIP is the only Michigan needs-based grant in which eligibility is based on household income (using Medicaid eligibility as a proxy, it covers students from families whose household income is below 130% of the federal poverty guideline) rather than on estimated family contribution. The final budget follows the governor’s recommendations of $93.8 million, an increase of $20 million, for TIP to provide tuition support to students with lower incomes.

Streamlines college scholarships. Michigan currently has several different financial aid programs. The current year budget initiated a phase-out of the Michigan Competitive Scholarship (MCS) as student awards increase under the Michigan Achievement Scholarship, and the budget decreases the MCS by $6.9 million, following the governor’s recommendation. Similarly, the Tuition Grant Program will be phased out with the guarantee that current students receiving an award will continue to do so under current program rules. The governor’s budget similarly recommends phasing out the Tuition Grant Program, which provides tuition assistance to students at Michigan’s independent (i.e. private, nonprofit) colleges and universities, and proposed a $7.1 million decrease. 

Shifts funding streams for college scholarships. Until recently, college scholarships, many of which go to students from middle-income and affluent households, were largely paid for with federal Temporary Assistance for Needy Families (TANF) dollars, despite only partially serving the TANF population. Proposed changes in federal rules are expected to prohibit the use of TANF for these purposes. The final budget replaces $127.8 million of federal TANF funds with state General Fund dollars.  

Explaining the Community College Guarantee

What’s missing?

The use of School Aid Fund dollars for postsecondary education is a continuing problem. Both the community colleges and the public universities budgets continue the problematic practice, begun in budget year 2010, of using a significant amount of School Aid Fund (SAF) dollars to supplant General Fund dollars. Although constitutionally allowed, this is money that has historically been meant to support K-12 public education. When Michigan residents voted by ballot to raise their taxes in 1994 to strengthen the SAF, they did so with the understanding that the money would go to support the public K-12 school system, not universities and community colleges.

Nearly $9.5 billion of SAF has been diverted away from K-12 schools since 2010

Source: House Fiscal Agency

Taken together, the two postsecondary education budgets for FY 2024-2025 use a total of nearly $925 million to support the operations of postsecondary institutions—the second highest diversion of SAF dollars since the practice began. With this diversion, a total of more than $9.5 billion will have been diverted out of K-12 education this way during the past 15 years.

Source: MLPP analysis of HB 5507 (H-1) CR-1 and SB 747 (S-1) CR-1, as enrolled

Michiganders succeed when they are given the resources that allow them to go to school, to work and to participate in their community. Children have a difficult time learning if they are hungry or if they worry about whether their family can afford their next meal. Stable, safe, affordable housing is necessary to find and retain a job. Being able to access their basic needs helps Michiganders achieve better educational outcomes, live healthier lives and access economic prosperity.

For too long, our budget has disinvested in key areas that can have these lifelong beneficial impacts on the lives of our most important commodity—our people. The COVID-19 pandemic and our resulting recovery has shown policymakers the importance of investing in these social determinants of health and direct drivers of economic prosperity. When we prioritize state investments that help Michiganders afford their basic needs, put food on their tables and access safe housing, it has long-lasting impacts on the lives of Michigan’s families and children. The final fiscal year (FY) 2024-2025 state budget builds on current-year commitments to food access and safe, affordable housing, and makes key investments in programs to support direct cash payments, marking the first significant investments since the program’s inception. 

Please note, investments covering the basic needs of Michiganders cross many different areas of the state budget. If a department is not listed within the investment line, the program and funding falls within the budget for the Department of Health and Human Services (MDHHS). 

Basic Cash Assistance
Michigan’s Family Independence Program (FIP) provides basic cash assistance to Michiganders with no to very low incomes. After years of neglect of eligibility criteria and harmful policies enacted by the Legislature, the number of families served by the program dropped from nearly 80,000 per month in 2011 to about 12,300 per month—including about 23,100 children—in 2023. However, for the first time since the program’s inception in the early 90s, the FY 2024-2025 state budget includes meaningful increases to program benefits. 

FIP currently reaches few families in Michigan, latest budget seeks to change this trend

Source: Michigan Department of Health and Human Services, Trend Report of Key Program Statistics, January 2024

The final budget does the following to support basic cash assistance:

Increases the standard of payment. The payment standard is used to calculate who qualifies to receive benefits and the maximum amount of benefits recipients can receive. Increasing the standard will increase the number of families eligible for the program. 

Extends the lifetime limit to 60 months. The extension enables families to utilize the program longer during times of need. This change also requires a policy change made through a budget implementation bill (Senate Bill 932) that has not yet passed, but is currently pending before the House Appropriations Committee. 

Expands the Young Child Supplement. Provides a $10 million Temporary Assistance for Needy Families (TANF) increase to provide additional benefits for families raising children under the age of 6.

Establishes a new supplement for older children. The final budget agreement adds $7 million for a new supplement mirroring the young child supplement but at a reduced rate for families raising children between the ages of 6 and 14.   

Adjusts the Family Support Subsidy. The final budget includes an additional $3 million to be reallocated to the Family Support Subsidy based on estimated program costs. This program gives a cash benefit of $300.36 to qualifying families with children who are severely mentally impaired, severely developmentally impaired or autistic.    

Reallocates existing funds to target poverty. These changes represent a shift in allocation of federal TANF dollars from administrative functions and other public programs to targeted investments to support families living in poverty rather than new general fund spending.

Big changes to the Family Independence Program in the new budget

For the first time since the program’s inception, FIP will receive a meaningful increase to its payment standard. This means reaching more families, increasing benefits to current recipients and giving more Michiganders a fighting chance during tough times. All of this will be done without the use of general fund dollars.

Increases the clothing allowance for foster care youth. The final budget includes a $1.5 million increase to the semiannual clothing allowance and holiday allowance for foster care youth by $50.

Maintains support for the Diaper Assistance Program. The Diaper Assistance Program funds entities that distribute diapers free of charge to qualifying families with children under 3 years of age. The final budget provides an additional $2 million (TANF) to the program, allowing local county offices to be eligible to receive diapering supplies.

Funds grants for prenatal and infant support programs. The current year budget included funding for the Rx Kids program, a public-private partnership in Flint, MI to provide cash payments to pregnant people and monthly payments for infants through 12 months. Recognizing that reducing the toxic stress of poverty on families has long-term beneficial impacts on kids, the final budget includes $20 million (TANF), slightly less than the governor’s recommendation but more than what was included in the House and Senate budgets, to expand the Rx Kids program and alleviate the symptoms of poverty among families with newborn children.

Includes $3 million (General Fund) for promotion of and education about the Michigan Achieving a Better Life Experience (MiABLE) program. The program allows people who become disabled before age 26 to save money for disability-related expenses without affecting their eligibility for other public benefits programs (which typically limit disabled people to a mere $2,000 in assets). Only 1% of the roughly 500,000 eligible Michiganders are enrolled currently, and in 2026, a federal law change will expand eligibility to all people disabled before age 46. (Treasury)

What’s missing?

A paid family and medical leave program. During the governor’s August 2023 special address, she announced support for a state-level paid family and medical leave program that would allow all workers to access paid leave during illness, following the birth of a child, while caring for a family member, or for other purposes. Typically paid for by payroll taxes that are shared between the employer and the employee, state-administered paid leave programs provide at least partial replacement of wages that are lost due to family or medical leave needs. Legislation to implement such a policy has stalled in the legislature.

Diaper assistance grant expansion. The final budget maintains and further expands which entities can receive grants and distribute benefits. However, it falls short of the much broader $10 million expansion of the program proposed by the Senate that would greatly expand the program’s reach.

Healthy Food Access
The ability to access and pay for healthy food is essential to a person’s health and ability to learn and go to work. The federally funded Supplemental Nutrition Assistance Program (SNAP) remains the state’s main way to help families afford groceries, and earlier this year, the state removed barriers to access SNAP by eliminating the asset test that was used to determine eligibility. Building on this success, Michigan’s budget recognizes that Michiganders of all ages and stages in life could use extra support in ensuring healthy meals make it to their dinner tables.

The final budget does the following to support access to food:

$5 million for the Double Up Food Bucks (DUFB) program. This is $3 million above the current spending level and what the governor proposed for 2025. The program, operated by the Fair Food Network, allows families receiving food assistance to double the value of benefits spent on Michigan-grown fresh produce at participating farmers markets and grocery stores. (Department of Agriculture and Rural Development)

A total of $200 million to continue offering public schools the option to provide free breakfast and lunch to all students. For the 2023-2024 school year, the Legislature allocated $100 million ongoing from the School Aid Fund (SAF) and $60 million in a one-time School Meals Reserve Fund to cover all school meal costs that are not reimbursed by the federal government. The new budget includes the governor’s proposal to increase the SAF appropriation by $70 million and add $30 million to the Reserve Fund for the 2024-2025 school year. (School Aid/K-12 Budget)

$108.5 million ($108 million federal, $500,000 state General Fund) for a summer food assistance program for children. Beginning in 2011, Michigan has participated in a federal pilot program to provide food assistance via electronic benefit transfer (EBT) during the summer, when children lose access to school meals and child hunger spikes. Recent federal legislation makes the program permanent and opens it to all states beginning this summer. The final budget dedicates $108 million in federal funds to MDHHS for summer food assistance benefits of $120 per eligible child, and $500,000 in state funds to the Michigan Department of Education to administer the program and meet Michigan’s federal match requirement.

$500,000 in one-time funding to expand a fruit and vegetable prescription program in Genesee County. (Agriculture and Rural Development)

$500,000 General Fund for a one-year hunger-free campus grant pilot program. Michigan State University, Northern Michigan University, Grand Rapids Community College, and Macomb Community College will each receive a grant of $125,000 to reduce student hunger through establishment of campus food pantries, campus meal plan credit donations, and other policies. (Lifelong Education, Advancement, and Potential)

$3 million General Fund for a local food infrastructure grant to the Michigan Independent Retailers Association to aid grocers and food wholesale and retail merchants in combating food deserts.

$2 million in one-time General Fund to offset costs of capital improvements, renovations, infrastructure expansion and related expenses at Meals on Wheels of Western Michigan. (Labor and Economic Opportunity)

Food assistance caseloads remain high compared to pre-pandemic levels, demonstrating that Michigan families are still struggling 

Source: Michigan Department of Health and Human Services Green Book

What’s missing?

Funding is reduced for the Ten Cents a Meal program, a competitive grant program that provides incentives for school districts and child care centers to purchase Michigan-grown produce. Ideally, funding would have remained at the current level of $9.3 million, but for 2025, in concurrence with the governor’s recommendation, the budget includes only $4.5 million ($500,000 General Fund, $4 million School Aid Fund). The budget, however, also includes several changes recommended by the governor to make the program more effective, including: increasing the share retained by project partners for data collection, outreach, and training from 1% to 2%; and allowing grantees to use up to 25% of their awards for program-related labor and food transportation costs.

Safe, Attainable Housing
Access to safe, affordable housing is a crucial factor in an individual’s health status, academic success and economic stability. Unfortunately, high housing costs and the lack of available, affordable housing has resulted in many Michiganders having to make tough decisions between housing, healthcare access, food access and other basic needs. While unaffordable housing costs disproportionately affect renters and households in urban communities, it is neither a new issue nor one that only affects certain demographic or geographic populations.

Unaffordable housing costs disproportionately affect renter families, especially those in urban counties 

Source: American Community Survey, 2021, 5-year estimates

The final budget does the following to support housing access:

$50 million (restricted funds) for the Housing and Community Development Program, which promotes rehabilitation and new housing development and revitalization of downtown areas. The program is supported by a trust fund that, until recently, received extremely sporadic and limited funding. Public Act 4 of 2023 created a permanent dedicated funding stream by requiring $50 million in corporate income tax revenue to be deposited into the fund annually. (Labor and Economic Opportunity)

$33.4 million for housing stock and homeowner affordability. The funds will go toward the construction of new single- and multi-family housing units, renovation of existing homes and completion of energy efficiency improvements. Additionally, the funds can be used to leverage federal resources that align with those objectives. (Labor and Economic Opportunity)

$100 million one-time General Fund for other housing initiatives. The funds include support for projects in specific communities as well as statewide competitive grants. (Labor and Economic Opportunity)

Continued funding for the Housing Readiness Incentive Program, which provides grants to cities, villages and townships to cover costs associated with adopting land use policies, master plan updates, zoning text amendments and other actions to improve housing supply and affordability. The program received $5 million for 2024; the final budget includes an additional $1 million in a current-year supplemental and $2.3 million in one-time General Fund for 2025. The final budget also extends program eligibility to counties. (Labor and Economic Opportunity)

The budget also includes the following in a supplemental for the current year:

• An additional $50 million in federal funds for the Housing and Community Development Fund. The Michigan State Housing Development Authority (MSHDA) must use the funds to expand access to affordable and attainable housing for households that the federal government considers eligible for State Fiscal Recovery Fund assistance. (Labor and Economic Opportunity)

• $110 million in federal funds for a Missing Middle Gap Program. MSHDA is to use the money to defray costs to developers investing in, constructing, or rehabilitating properties targeted to “missing middle” households. At least 30% of awards must go to rural community projects. (Labor and Economic Opportunity)

• $20 million ($10 million General Fund, $10 million federal ARP funds) for home- and community-based supportive housing for people who have experienced homelessness. Supportive housing combines affordable housing with supportive services for residents facing the most complex housing challenges. This investment will help Michigan meet all supportive housing needs, two-thirds of which are currently unmet, while the state works to leverage more Medicaid funding for these critical services.

One of the reasons housing is unaffordable to so many Michiganders is the cost of utilities, such as energy and water. Generally, housing–including utilities–is considered affordable when it costs no more than 30% of household income. Many families with the lowest incomes, however, must spend more than that on energy bills alone. 

For Michigan families with the lowest incomes, energy bills are a crushing burden that has grown during the pandemic.

Source: Fisher Sheehan & Colton, Home Energy Affordability Gap

The final budget does the following to make sure more families with low incomes have utility service:

$5 million (General Fund) for pre-weatherization assistance, which provides repairs to prepare homes for energy efficiency improvements that can permanently lower utility bills. Specifically, the funding will be directed toward households with low incomes that include elderly people, people with disabilities and children.

$10 million (General Fund) for competitive grants to water service providers to provide assistance with residential water bills. Eligible residents include those who have a financial burden or water bill arrearage, or have had their service shut off or are at risk for a shutoff. Fund expenditures must be income based and include restoring service, paying down arrearages, and supporting reasonable water affordability plans that are based on an individual’s ability to pay.

Additionally, the budget includes current-year supplemental funding as follows:

• $46.3 million ($30 million TANF, $16.3 million other federal funds) to accept additional funds under the federal Low Income Home Energy Assistance Program (LIHEAP) and to ensure that funds are available outside of the heating crisis season.
• $156.2 million (federal Inflation Reduction Act funds) to support a solar program for households with low incomes. The program’s goals include increasing residential solar installation, abating pollution and improving grid reliability. (Environment, Great Lakes, and Energy)

The final budget also includes several long-overdue investments in Michigan’s homelessness prevention and response efforts:

$8.5 million (TANF) to support family shelters or families who are homeless or at risk of homelessness, including:

• $3 million for emergency hotels for families experiencing homelessness.
• $3.5 million to support families engaged with child welfare, including eviction diversion, first month’s rent and deposit, and utility arrears.
• An additional $2 million (TANF) to acquire and develop non-congregate shelter that uses a Housing First model.

Continued funding to expand services for homeless and runaway youth. The budget maintains the current-year funding level of $5.3 million ($1.1 million General Fund, $4.2 million TANF) for grants to support the expansion of runaway and homeless youth capacity. The money must be allocated based on geographic coverage, population demographics, scope of services provided, and need. Service providers must provide continued infrastructure improvements and support for expanded staff, supervision and training to meet complex mental health needs; and direct service expansion for client stabilization.

$500,000 (one-time General Fund) to support an eviction diversion pilot program in Washtenaw County’s 14A District Court. (Judiciary)

$1.5 million to support implementation of Detroit’s right-to-counsel program for city tenants involved in eviction proceedings. (Labor and Economic Opportunity)

Following a dramatic decline in homelessness over the first two years of the pandemic, homelessness has spiked in our state since emergency aid has come to an end.

What’s missing?

Revival of the Emergency Rental Assistance (ERA) program that was in place during the pandemic. Federal ERA helped pay rent and utility bills for nearly 263,000 Michiganders who experienced hardship resulting from the COVID-19 pandemic. But those funds have dried up and evictions and homelessness are on the rise again. Michigan rents are increasing at the third-fastest rate in the nation. Continued state investment in this effective program would keep struggling families safe, support landlords when their tenants’ ability to pay rent is uncertain and ensure stability of the rental market.

A $30-million (TANF) increase for the State Emergency Relief (SER) program, which provides one-time emergency assistance for relocation, homeownership, utilities, deposits and home repairs. Despite inflation and rising property taxes, assistance with property tax arrearages through SER is capped at $2,000 per household. Also, families are not eligible until the second year of tax delinquency. The governor proposed increasing the limit to $5,000 and allowing assistance earlier in the process to help families avoid tax foreclosure and potential homelessness. The final budget, however, does not include this increased funding or these policy changes.

Michigan lags the nation–and most of our Midwest states– in health outcomes including life expectancy and  poor physical and mental health. Additionally, for far too long, things like a person’s race or ethnicity, ZIP code and immigration status have been predictive of worse health outcomes that have resulted in deep, long-lasting disparities in health.

Barriers such as a lack of access to services due to distance from a healthcare provider, eligibility exclusions due to policy or social determinants of health—like living in a community with aging infrastructure causing lead-poisoned water or groundwater contamination by Per- and Polyfluoroalkyl Substances (PFAS)–prevent healthy outcomes. Poor health contributes to worsening educational and economic outcomes for the individual who is ill, specifically, as well as for the family or community that bears the time and financial cost of acting as the caregiver.

Michigan ranks below most Midwest peer states in health outcomes

Source: America’s Health Rankings, 2023 Annual Report

The final fiscal year (FY) 2024-2025 budget continues to include a number of tools and policies to improve health outcomes for all Michiganders by increasing access to healthcare, improving behavioral health access and addressing social determinants of health.

Please note, most of the investments below fall in the budget for the Michigan Department of Health and Human Services (MDHHS); any differences to this are noted within the investment line. 

Healthcare Access
Access to safe, affordable and convenient healthcare is necessary to improve health outcomes for all Michiganders. Traditional Medicaid programs and the Healthy Michigan Plan—Michigan’s version of Medicaid expansion—are some of the state’s main ways to help Michiganders with low incomes all over the state to afford basic health services. However, numerous programs within the state budget provide tools to improve access and reduce existing health disparities.

The final budget does the following to support access to healthcare:

Restructures Medicaid. As the state is currently engaging in renegotiating contracts with health plans that deliver Medicaid services, the state budget also includes investments that intend to remove barriers and improve Michiganders’ and families’ access to quality healthcare, including:

• $1.8 million to eliminate the $10 per month MIChild (Children’s Health Insurance Program, or CHIP) premium for all families with children enrolled in the program. During the FY 2022-2023 budget cycle, MIChild regularly provided low-cost, high-quality healthcare for nearly 50,000 children on average per month. The budget also included $1.4 million in a current year supplemental for this purpose in the current budget year.
• $7 million to increase provider participation in the Vaccines for Children program, which provides vaccines at no cost to children who might not otherwise be vaccinated because of inability to pay. In 2023, only 69.8% of toddlers ages 19-35 months had been fully vaccinated, far under the 80-90% goal for herd immunity.
• The governor had recommended including $30.5 million to provide limited Medicaid coverage to incarcerated individuals 90 days prior to release by seeking a federal Section 1115 waiver to partially waive the “inmate exclusion.” Michigan would join a number of states seeking similar waivers to help reduce reliance on emergency medical services and support the transition of care for formerly incarcerated individuals. Additionally, the governor had recommended $10 million for an “in-lieu-of-services” incentive pool for Medicaid health plans that improve food security for their enrollees with specific dietary needs. Neither of these investments were included in the final budget. 

Racial bias and environmental factors have contributed to higher rates of infant mortality in children of color

Source:Michigan Department of Health and Human Services, Division for Vital Records and Health Statistics. (Note: Deaths for Arab Ancestry include those from all races. These data are based on three-year averages, with the latest year listed.)

Increased investment in services that enable older adults and people with disabilities to remain in their homes rather than institutional settings, including the following:

• $3.2 million ($1.1 million General Fund, $2.2 million federal) to increase the enrollment cap for the Program for All-Inclusive Care for the Elderly (PACE) by 990 people and expand PACE sites in Huron Valley, Traverse City, Genesee and Wayne counties as well as central Michigan. PACE provides comprehensive medical and social services to older adults still living in the community.
• $20 million ($10 million General Fund, $10 million federal ARP funds) in a current-year supplemental for home- and community-based supportive housing (SH) for people who have experienced homelessness. Supportive housing combines affordable housing with supportive services for residents facing the most complex housing challenges. This investment will help Michigan meet all SH needs, two-thirds of which are currently unmet, while the state works to leverage more Medicaid funding for these critical services.

Investment in a  study on the effects of the 2019 auto no-fault insurance reforms. The final budget includes $250,000 (one-time restricted funds) to contract with a university or research institute to study the effects of the 2019 auto no-fault insurance reforms. Prior to the 2019 legislation, Michigan drivers were required to purchase unlimited personal injury protection (PIP), which provided lifetime medical coverage for people injured catastrophically in auto accidents. Public Act 21 and Public Act 22 of 2019 allow drivers to choose lower PIP coverage in exchange for lower premiums, effective July 1, 2020. Beginning July 1, 2021, the bills also cut insurer reimbursement rates to healthcare providers by 45% and capped the number of hours family members can be reimbursed for caregiving, even for patients injured before July 1, 2020 who had paid for unlimited lifetime coverage under the old system. Following a lawsuit, the Michigan Court of Appeals ruled in August 2022 that the new laws could not be applied retroactively to those injured before the changes took effect. Insurers have appealed to the Michigan Supreme Court. In the interim, patients and their advocates are concerned about people who have lost access to care and died, and healthcare providers that have had to close under the reduced reimbursement rates. (Department of Insurance and Financial Services) 

What’s missing?

Continuous healthcare coverage through Medicaid for children and adults. Providing multi-year continuous coverage for children under 6 and 12 months and continuous coverage for adults can reduce churn—or the process of gaining and losing coverage—which often results in higher healthcare costs, disruption to care and worse health outcomes.

Funding to help improve maternal and child health outcomes for immigrants in Michigan. Michigan recently extended Medicaid postpartum healthcare coverage from 60 days to 12 months and included some lawfully residing immigrants in the five-year waiting period; however, not everyone who gives birth while enrolled in Medicaid will benefit from Michigan’s extension of postpartum coverage—specifically, those who are still ineligible because of their immigration status. Michigan should use CHIP Health Services Initiative (HSI) funding to extend postpartum Medicaid coverage for undocumented women from 60 days to 12 full months.

Public and Environmental Health
Public health is constantly working—often behind the scenes—to protect Michiganders and their families. Public and environmental health services and programming prevent disease from occurring in the first place or provide resources to prevent its spread; promote physical, social and environmental health; and protect entire communities, along with people’s homes, from toxins. State-level investment that reaches the local level, along with innovative policies and programs, is key to strengthening Michigan’s capacity to respond to community-specific public health needs.

The final budget does the following to support public and environmental health:

Maintains funding for community public health, including essential local public health services provided by local health departments. The final budget provides $468.3 million for community public health, which includes local health programs and administrative services in addition to a variety of services such as epidemiology, emergency preparedness, laboratory services and PFAS and environmental contamination response. 

• Of this, $76.4 million would continue to go to Essential Local Public Health Services, per the 50-50 state/local cost-sharing requirement related to mandated services.

Implements the Coronavirus Task Force on Racial Disparities’ recommendations. The COVID-19 pandemic highlighted the racial disparities in health outcomes for communities of color. To study the causes of racial disparities and recommend actions to address the historical and systemic inequities, Gov. Gretchen Whitmer created the Coronavirus Task Force on Racial Disparities. Building on the investments included in the current year budget, the final budget provides $17.5 million to implement the Task Force recommendations through community health programs to support preventive health supports and services in regions with high healthcare access and outcome disparities. This is a $7.5 million increase over the current year for this specific line item, but it is less than half of what the governor proposed for these investments. Services supported with these funds include operation of community-based health clinics, mobile health clinics, and healthy community zones using long-term strategies to address access to healthy food, affordable housing, and safety networks.

Increases funding for smoking cessation and tobacco prevention programs. Michigan has higher rates of e-cigarette use in high school students (14%) and adults that smoke (15.2%) than the national average (10% and 11.5%, respectively). At the same time, Michigan ranks below most other states in terms of smoking cessation, prevention programs and recommendations set by the CDC for program funding. The final budget includes a $2.5 million increase, half of the governor’s proposal, for smoking cessation and tobacco prevention programs to maintain and expand current efforts to reduce tobacco use among Michigan’s adult and youth population.

Makes one-time investments for firearm injury and prevention programs. The final budget budget includes $5.5 million total; more than the governor’s, House and Senate budgets; in grants for the University of Michigan to do the following:

• $2.1 million for technical training, assistance and program evaluation to implement statutory changes to extreme risk protection orders;
• $2.7 million for training, technical assistance and program evaluation associated with safe storage laws; and
• $750,000 to support data collection about fatal and non-fatal firearm injuries in the state.
• The final budget also includes $1.8 million in one-time funds for grants to community-based organizations that provide training on statutory changes to extreme risk protection orders and new safe storage laws.
  

Continues Support for Community Violence Intervention (CVI) services.  CVI programs are data-driven programs that build trust in the community and help reduce the risk of gun violence. The final budget includes a $500,000 increase to support the community violence intervention central office, but long-term ongoing funding is necessary to maintain stability. (Department of Health and Human Services)

Continues investment in infrastructure to improve drinking water safety and address climate change, including:

• $40.3 million ($35.3 million in one-time funding, $5 million in ongoing funding; General Fund) to draw down federal Infrastructure Investment and Jobs Act (IIJA) funds and support lead line replacement and associated activities in overburdened and significantly overburdened communities. (Department of Environment, Great Lakes, and Energy)
• $10.3 million (General Fund; $300,200 in ongoing funding, $10 million in one-time funding) for grants to municipalities for projects that mitigate and adapt to climate change through stormwater diversion infrastructure. At least 40% of the grants must be awarded to environmental justice, overburdened communities or significantly overburdened communities. (Department of Environment, Great Lakes, and Energy)
• $25 million ($3.5 million General Fund, $22 million IIJA) for local water infrastructure projects, in concurrence with the governor’s recommendation. (Department of Environment, Great Lakes, and Energy)
• $17 million (one-time funding, General Fund) for specific water infrastructure projects in Bingham Township, Northville, Redford Charter Township, Grand Ledge, Potterville, Vermontville and Clawson. (Department of Environment, Great Lakes, and Energy)
• $13.6 million (ongoing funding, General Fund) for local lead service line replacement and related activities in overburdened and significantly overburdened communities. Of this, $5 million is used as matching funds for IIJA draw down (see bullet point above) and $8 million (one-time funding, General Fund) is used for such activities in Wyandotte, Douglas and Redford Charter Township. (Department of Environment, Great Lakes, and Energy)

The budget also includes current-year supplemental funding as follows:

• $992,000 in federal IIJA funds for Great Lakes Remedial Action Plan Grants to local water providers for remediation of emerging contaminants. (Department of Environment, Great Lakes, and Energy)
• $1.6 million in federal IRA funds to support various air quality monitoring activities and the deployment, integration and operation of air quality sensors in low-income, disadvantaged communities. (Department of Environment, Great Lakes, and Energy)

What’s missing?

Adequate funding for lead poisoning investigations and response. Although the Flint water crisis has sparked critical investment in water infrastructure upgrades to remove lead in recent years, children still face threats from the primary source of lead exposure: deteriorating paint in older homes. When a child has been poisoned by lead, an elevated blood lead investigation is crucial to identifying the source and preventing future poisonings in the same home. Lead exposure response varies across the state based on the resources individual local health departments can cobble together. A state-level revenue stream, estimated at $86 million to $100 million annually, for local investigations and other critical response activity would ensure that all affected children receive the attention they deserve.

Funding for full implementation of the Filter First legislation enacted to ensure safe drinking water in schools and child care centers. In 2022, the Legislature appropriated $50 million for installation of touchless hydration stations and faucet filters in schools and child care centers. This is a cost-effective way to protect children from exposure to lead and other contaminants. Another $50 million will be needed as more institutions throughout the state move to adopt these measures. While the final budget includes $500,000 (General Fund) for the Department of Lifelong Education, Advancement, and Potential to provide specialty water bottles to test drinking water quality at child care facilities, this falls far short of the comprehensive protective measures identified in the Filter First legislation. Robust support for the Filter First approach will better assure parents that their children are safe, help mitigate the broader social and economic impacts of water contamination, and ensure equitable opportunity for all kids.

Michigan succeeds when all of its residents have access to what they need to thrive—high-quality education, healthcare, support for their basic needs and opportunities to engage in the economy. This also needs to extend to our justice-involved youth and adults. While policymakers have enacted a number of criminal legal system reforms over the past five years—including raising the age for who is considered an adult under our legal system and allowing for expungement of certain prior convictions—the state budget creates an opportunity to provide direct support to those currently involved in the justice system. The final fiscal year 2024-2025 state budget includes a number of investments to support this population.

Adult Correctional Facilities and Services (Dept. of Corrections)
Responsible for the operation and maintenance of the state’s 26 correctional facilities, the Michigan Department of Corrections (MDOC) supervises a total of 88,166 people as of May 2024 (a net increase of 17.7% since last year), mostly driven by an increase in the number of people on probation but with increases across the board: 32,949 people who are incarcerated, 44,973 people on probation and 10,244 people on parole. The final budget includes investments in healthcare delivery and pre-release services—such as in-reach and peer-led reentry services—as well as a new Education Center to provide more academic, college or career readiness programming.

The final budget does the following to support adult correctional facilities:

Maintenance funding for vocational education and training to help support returning citizens, with new programming funded through reinvestments. The final budget provides $127.8 million for prison programming that helps prepare prisoners with vocational and educational skills prior to release, reducing the likelihood of recidivism and helping them to lead stable and fulfilling lives. Within this, $38.8 million will be used to maintain ongoing funding for education, skilled trades and career readiness programs.

Expanded educational and vocational training in prison with a new Education Center. The final budget includes $3.4 million in restricted, one-time funding, along with just under $500,000 of reinvested General Fund (from “Offender Success” Services), to retrofit a building at the Thumb Correctional Facility to create an Education Center that provides more educational and vocational training. This location will provide academic, career and technical education, employment readiness or college programming. The $3.4 million would be one-time funding allocated from the remaining unspent balance of the Program and Special Equipment Fund. 

Increased funding for peer service providers to support peer-led reentry. With a $1.5 million reinvestment (from “Offender Success” Services) and an additional $500,000 in one-time General Fund, the final budget includes a boost for peer-led reentry services, which is programming that centers on formerly incarcerated individuals working with those who are eligible for parole. These supports include peer mentoring and coaching focused on both navigating various resources upon reentry as well as recovery from mental illness and/or addiction. 

Expanded capacity to provide services that address social determinants of health earlier. The period just prior to an individual’s release from prison is critical, particularly when it comes to addressing needs around housing, healthcare, transportation, community supports and other social determinants of health. The final budget reinvests $900,000 (from “Offender Success” Services), provides an additional $500,000 in one-time General Fund, and authorizes six additional full-time equivalent (FTE) positions to support the department’s adoption of an In-Reach model that places staff at every facility. This more regional approach would result in In-Reach parole planning services being brought directly to more people who are incarcerated in Michigan. 

Increased funding toward healthcare services, driven largely by population increase. Contracted healthcare services for incarcerated Michiganders cover medical and behavioral healthcare, speciality care, and pharmaceutical services that occur onsite. In line with the governor’s recommendation, the final budget agreement includes a $16.2 million increase overall to cover the rising costs of the contracted services; $12 million of this total would go toward paying for healthcare services themselves, an increase that is the result of new utilization because the population of those under MDOC supervision has recently grown. 

Funding to pay for contracted nurses. The final budget contains $10.4 million to go toward the increased costs of contract nursing staff, which is in line with the governor’s budget recommendation. Contracting with nurses (RNs, LPNs) is more expensive than hiring civil service nurses, but there have been staffing difficulties for civil service nursing positions, forcing MDOC to contract out nursing positions. 

Funding for our state correctional facilities. The final budget includes $1.1 billion in funding for the state’s 26 correctional facilities, a 2.9% increase from recent years. 

What’s missing?

Funding to provide Medicaid coverage prior to release to support reentry and improve health outcomes. The governor’s recommendation contained $30.5 million ($5.6 million General Fund) to provide limited Medicaid coverage to incarcerated individuals 90 days prior to release, by seeking a federal Section 1115 waiver to partially waive the “inmate exclusion.” With this, Michigan would have joined a number of states seeking similar waivers to help reduce reliance on emergency medical services and support the transition of care for formerly incarcerated individuals. Unfortunately, the funding was left out of the final budget agreement.

Supports for Justice-Involved Youth
Over the past several years, Michigan has enacted a number of policies to help reform our juvenile justice system, including raising the age of automatic adult adjudication and improving county services for justice-involved youth. However, Michigan still detains youth at one of the highest rates in the nation, especially for non-criminal behavior, and because of systemic barriers and racial bias, youth of color are disproportionately impacted by juvenile justice policies. A bipartisan Task Force on Juvenile Justice Reform was created in June of 2021, relied on data- and research-backed analysis, and presented a number of reforms that can help both deter delinquency and improve rehabilitation of justice-involved youth. The final fiscal year 2024-2025 state budget recommendation grows on the current budget that included a number of the recommendations presented by the Task Force to improve community safety, reduce disparities and improve youth outcomes.

Black justice-involved youth confined at significantly higher rates than other youths attached to the criminal legal system

Source: PRB analysis of OJJDP’s Census of Juveniles in Residential Placement. Puzzanchera, C., Sladky, T.J., and Kang, W. (2023) “Easy Access to the Census of Juveniles in Residential Placement.” (Persons under age 21 detained, incarcerated or placed in residential facilities)

The final budget does the following to support justice-involved youth:

Implementation of the Task Force on Juvenile Justice Reform recommendations. The final budget includes $10.4 million ($5 million one-time), and 16 new FTEs, to fund new tools to improve pre-service screening, diversion services, and case reviews to reduce lengths of stay as well as new programs at state-operated juvenile justice facilities. This is slightly down from the governor’s $11.9 million recommendation. (Dept. of Health and Human Services)

Support for capital improvements at juvenile justice facilities. The final budget includes $5 million total to provide grants to support capital improvements at specified state-owned and non-state-owned juvenile justice facilities. The Senate recommended $14 million total for this, and the House had recommended $1 million for a specific project.

One-time funding for defense of juveniles charged with felonies. The final budget includes a $1 million grant to the University of Michigan Law School to provide financial assistance to unrepresented juvenile defendants who are charged with a felony so that the defendants can secure competent legal counsel. While a good step, a long-term discussion on juvenile defense is necessary. Michigan currently allows the State Appellate Defender Office (SADO) to provide services for juvenile offenders on appeal, but we currently do not allow the Michigan Indigent Defense Commission to provide competent juvenile defense at the trial court level (see below). 

What’s missing?

Funding to support implementation of youth defense. One of the recommendations of the Task Force on Juvenile Justice Reform was to help provide effective public defense of justice-involved youth. The Michigan Indigent Defense Commission needs $1.3 million to support staff necessary to conduct the research, data analysis, and compliance framework to develop youth defense standards, which will help implement HB 4630, pending on the Senate floor. The Senate budget had included $1 million for this purpose, but it was not included in the final budget. (Licensing and Regulatory Affairs)

Other Criminal Legal System Investments
Michiganders who are incarcerated and returning citizens rely on support that goes beyond the services they receive while confined. Investments in these areas help support a person’s right to due process, reduce recidivism and keep communities safe.

The final budget does the following to support the criminal legal system:

Increasing staff at the State Appellate Defender Office. SADO provides state-funded public defenders to represent individuals with pending appeals and ensure effective counsel for indigent people appealing criminal convictions; they handle about 30% of these individuals. In alignment with the governor’s budget recommendation, the final budget includes an additional $3.3 million to support attorneys and support staff at SADO for a three-year, phased implementation of workload standards. (Judiciary)

Increasing support for public defenders of indigent individuals at initial trials. The Michigan Indigent Defense Commission works to develop and implement minimum standards and provide grants to local trial courts to ensure Michigan’s public defense system is fair, cost-effective and constitutional. The final budget includes a $37.4 million increase for the grants to the 120 local trial courts to help them meet existing and new minimum standards. (Licensing and Regulatory Affairs)

Creation of a Public Safety and Violence Prevention Fund. The final budget includes $75 million from a new restricted Public Safety and Violence Prevention Fund that will be created if HB 4605 and 4606 are enacted. (Treasury)

What’s missing?

Support for Conviction Integrity Units. Since 2018, Michigan has exonerated 71 people falsely imprisoned for crimes they did not commit, which reflect the hard work of innocence clinics, attorneys, and state and local Conviction Integrity Units (CIUs). Conviction Integrity Units provide checks and balances in our criminal legal system by helping investigate innocence claims. Establishing or expanding county-level CIUs improve public safety and restore freedom and justice to Michiganders who have done nothing wrong.

Implementing an Expungement Lookup Portal. In April 2023, Michigan’s automatic expungement law went into effect, and over 4.5 million convictions have been automatically sealed. However, there is no easily accessible, centralized resource where people can check their records and confirm they have been properly sealed. As a result, people may not be accessing jobs and housing for which they are eligible now that they no longer need to check the felony conviction box. It’s possible that the funding for this exists, but it may take several years for a Clean Slate Portal to be implemented.

AN IMPORTANT NOTE ON DATA

Finding and analyzing data on justice-involved Michiganders has been challenging for a number of reasons: it’s not available or if it is available, it’s incomplete or it cannot be compared across communities because there’s no standardization. Unfortunately, this means we rely on incomplete data or data from other states to form policy recommendations. To truly create improved outcomes for Michiganders across the state, we need adequate, comparable and available data. This is especially important to determine whether the changes will equitably impact disproportionately affected individuals and communities.