Updated November 11, 2020
Actions taken so far:
On October 2, 2020, the Michigan Supreme Court struck down a 1945 law that gave the Governor the authority to issue executive orders and directives in response to the COVID-19 crisis—orders that were needed to protect Michigan residents from the coronavirus. Without these restrictions, the number of cases and deaths have risen significantly, leading to broader economic concerns. Though estimates of revenue losses in the 2020-21 fiscal year are smaller than previously projected, large deficits are still projected moving into the 2021-22 budget year.
At the federal level, the CARES Act reserved $150 billion for payments to states and local governments. The State of Michigan received about $3.1 billion in federal funds under the bill, with funds earmarked specifically for necessary expenditures incurred during this public health emergency. Also, local units of government representing more than 500,000 people received about $793.8 million in federal relief.
In July, the Michigan legislature passed and the governor signed a supplemental budget bill allocating $880 million in COVID-19 aid. Of that, $851 million came from federal sources through the Michigan Coronavirus Relief Fund (CRF).
Additionally, to balance the 2019-20 budget:(1) the governor issued an executive order cutting a total of $620 million in state General Funds dollars; (2) a School Aid Fund supplemental budget was approved that included $712 million in federal relief funds and $350 million from the state’s rainy day fund, along with other funding shifts; (3) passed a General Fund supplemental budget that reduced state General Fund spending by nearly $539 million, including the swapping of federal relief funds for state funds, budget cuts, caseload changes and the repurposing of unspent dollars.
Of the state’s $1.2 billion rainy day fund, the legislature appropriated $350 million to supplement School Aid Fund revenues. The remaining $836 million is a potential source of one-time revenue to help address increasing need and falling revenues during the coronavirus crisis.
The governor and legislature passed 2020-21 budget in late September. The projected deficit for the 2020-21 budget was pegged at $972.6 million ($760.1 million General Fund and $212.5 School Aid Fund deficits) below that of the 2019-20 budget, which saw declines from the year prior.
Discussions have begun for the 2021-22 budget, with the consensus revenue estimating conference estimating a rebound of revenues equal to $1.4 billion ($855.8 million General Fund and $551.6 School Aid Fund). Even with this rebound, General Fund revenues are projected to be below 2019-20 levels, while School Aid Fund revenues are expected to recover fully.
Talks regarding additional COVID-19 relief for states and localities have stalled at the national level. The House voted for significant increases in state aid with less restrictions than funding from the CARES Act. Meanwhile, the Senate has refused to take up the HEROES act passed by the House, instead advocating for a much smaller relief package that does not include additional funding for states.
Our recommendations:
- Utilize the state’s rainy day fund to supplement revenues in the 2020-21 budget. The rainy day fund was designed to automatically trigger a 25% withdrawal during an economic downturn. The legislature should use these funds to supplement spending on programs and services that help economically vulnerable people in Michigan.
- Advocate for more federal relief to states. Congress needs to provide more relief to states. The state’s ability to balance the 2021 budget will hinge on the willingness of Congress to provide continuing relief to states, including an additional and larger increase in the federal share of Medicaid costs. Michigan and other states need federal relief that is tied to economic conditions, not the calendar, and allows states to use the funds to cover revenue losses created by COVID-related shutdowns. The League is advocating for additional federal assistance through the HEROES Act that was passed by the U.S. House of Representatives in May.
- Reform our tax system. While tax reform was not a practical solution for increasing revenues during the few months left in Michigan to balance the 2020 budget, it is a viable and needed long-term fix. For 2021 and beyond, Michigan lawmakers have the opportunity to make overdue changes to Michigan’s tax system to guarantee that there are adequate state funds to weather downturns, ensure the state has an ongoing and robust rainy day fund, and generate sufficient revenues to invest in the state’s people and infrastructure—including state policies and programs that eliminate inequities based on race and ethnicity. Michigan revenues have eroded over time in the face of increased costs through inflation, in part because the state’s tax system is not progressive or based on the ability to pay. In the 2019 budget year, the state’s General Fund was estimated to be nearly 30% below 2000 levels when adjusted for inflation, while the School Aid Fund was 2.2% below 2000 levels. The League has developed a set of recommendations for improving Michigan’s tax system to make it more fair and progressive.
Why Michigan must act now:
Without additional federal assistance, the looming budget deficit and short timeframe to negotiate the budget means that the upcoming budget deal will surely include major cuts to state programs and services that Michiganders rely on. Economists predict that employment rates will not recover for a significant amount of time, even after the COVID-19 pandemic slows. This means that there will be increased demand for state-funded services like food assistance, Medicaid, and unemployment insurance.
The COVID-19 crisis has also exposed weaknesses in our current tax system that make the state unprepared for economic downturns. To ensure that Michigan can recover quickly from this crisis and be insulated from crises in the future, state lawmakers should consider a progressive overhaul of our tax system to ensure economic equity and robust revenues in the future.
Jay Cutler joined the League in March 2026 as the Kids Count Senior Data Analyst, where he collects, analyzes, and prepares data for Kids Count in Michigan.
Danielle Taylor-Basemore joined the League as the Development Data and Stewardship Coordinator in June 2025. She brings with her five years of nonprofit experience with a special focus on community engagement, data visualization and strategic programming. Prior to joining the League, Danielle served as the Business District, Safety, and Digital Manager at Jefferson East, Inc.
Scott Preston is a Senior Policy Analyst with the Michigan League for Public Policy, where he leads the organization’s immigration and criminal justice reform portfolios. In the three years prior to joining the League, Scott facilitated the Southeast Michigan Refugee Collaborative and managed a small business economic development program at Global Detroit. His work included launching Michigan’s first Refugee Film Festival and building on a trusted connector model that linked marginalized communities with crucial resources. Scott’s work at the League is informed by his background in journalism and research. He spent four years covering the Syrian refugee crisis in the Middle East for publications such as The Economist, and later worked with unaccompanied refugee minors through Samaritas. Scott holds a master’s degree in international migration and public policy from the London School of Economics and Political Science.
Kate Powers joined the League as the Chief Development Officer in February 2025. Prior to joining the League, Kate held leadership positions at many Michigan nonprofit organizations, most recently serving as the COO and Chief Development Officer of Ele’s Place. Kate has spent the bulk of her career in fundraising, with a short stint in the state Legislature as a legislative aide to members in both chambers. Kate is a graduate of Michigan State University’s James Madison College with a Bachelor of Arts in Social Relations and has a certificate in fundraising management from the Lilly Family School of Philanthropy at Indiana University. Additionally, Kate served on the East Lansing Public Schools Board of Education and is a past President of the Junior League of Lansing. In her free time, she enjoys traveling with her husband and her son and saving outfit of the day and home decor ideas on Pinterest. 
Nicholas Hess joined the League as the Fiscal Policy Analyst in September of 2024. In this role, Nicholas focuses on tax policy, government revenue, and their impact on working families and racial equity, including the effects of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). Nicholas values the role that judicious fiscal policy can play in the improvement of people’s lives and the economy, alleviating inequities along the way.
Audrey Matusz joined the League as the Visual Communications Specialist in September 2024. She supports the team with implementing social media strategies and brainstorming creative ways to talk about public policy. She brings with her nearly a decade of experience in producing digital products for evidence-based social justice initiatives. 
Jacob Kaplan 
Donald Stuckey 
Alexandra Stamm 
Amari Fuller
Mikell Frey is a communications professional with a passion for using the art of storytelling to positively impact lives. She strongly believes that positive social change can be inspired by the sharing of data-driven information coupled with the unique perspectives of people from all walks of life across Michigan, especially those who have faced extraordinary barriers. 
Yona Isaacs (she/hers) is an Early Childhood Data Analyst for the Kids Count project. After earning her Bachelor of Science in Biopsychology, Cognition, and Neuroscience at the University of Michigan, she began her career as a research coordinator in pediatric psychiatry using data to understand the impacts of brain activity and genetics on children’s behavior and mental health symptoms. This work prompted an interest in exploring social determinants of health and the role of policy in promoting equitable opportunities for all children, families, and communities. She returned to the University of Michigan to complete her Masters in Social Work focused on Social Policy and Evaluation, during which she interned with the ACLU of Michigan’s policy and legislative team and assisted local nonprofit organizations in creating data and evaluation metrics. She currently serves as a coordinator for the Michigan Center for Youth Justice on a project aiming to increase placement options and enhance cultural competency within the juvenile justice system for LGBTQIA+ youth. Yona is eager to put her data skills to work at the League in support of data-driven policies that advocate for equitable access to healthcare, education, economic security, and opportunity for 0-5 year old children. In her free time, she enjoys tackling DIY house projects and trying new outdoor activities with her dog.
Rachel Richards rejoined the League in December 2020 as the Fiscal Policy Director working on state budget and tax policies. Prior to returning to the League, she served as the Director of Legislative Affairs for the Michigan Department of Treasury, the tax policy analyst and Legislative Director for the Michigan League for Public Policy, and a policy analyst and the Appropriations Coordinator for the Democratic Caucus of the Michigan House of Representatives. She brings with her over a decade of experience in policies focused on economic opportunity, including workforce issues, tax, and state budget.
Simon Marshall-Shah joined the Michigan League for Public Policy as a State Policy Fellow in August 2019. His work focuses on state policy as it relates to the budget, immigration, health care and other League policy priorities. Before joining the League, he worked in Washington, D.C. at the Association for Community Affiliated Plans (ACAP), providing federal policy and advocacy support to nonprofit, Medicaid health plans (Safety Net Health Plans) related to the ACA Marketplaces as well as Quality & Operations.
Renell Weathers, Michigan League for Public Policy (MLPP) Community Engagement Consultant. As community engagement consultant, Renell works with organizations throughout the state in connecting the impact of budget and tax policies to their communities. She is motivated by the belief that all children and adults deserve the opportunity to achieve their dreams regardless of race, ethnicity, religion or economic class.
Emily Jorgensen joined the Michigan League for Public Policy in July 2019. She deeply cares about the well-being of individuals and families and has a great love for Michigan. She is grateful that her position at the League enables her to combine these passions and work to help promote policies that will lead to better opportunities and security for all Michiganders.
Megan Farnsworth joined the League’s staff in December 2022 as Executive Assistant. Megan is driven by work that is personally fulfilling, and feels honored to help support the work of an organization that pushes for more robust programming and opportunities for the residents of our state. She’s excited and motivated to gain overarching knowledge of the policies and agendas that the League supports.
