Budget leaders agree to details of plan to balance FY 2020 state budget

LANSING, Mich. — Senate Appropriations Committee Chairman Jim Stamas, House Appropriations Chair Shane Hernandez and State Budget Director Chris Kolb on Tuesday announced they have reached an agreement on the details of a plan to balance the fiscal year 2020 state budget.

“Every budget is a statement of priorities,” said Stamas, R-Midland. “In the face of unprecedented and unforeseen challenges in 2020, this budget agreement is evidence of our shared commitment to schools, local governments and everyone affected by COVID-19. We’re all in this together.”

Building on the framework previously announced by Gov. Gretchen Whitmer, Senate Majority Leader Mike Shirkey and House Speaker Lee Chatfield, the agreement will balance the state’s $2.2 billion budget shortfall through spending cuts, hiring freezes and using a portion of the state’s “rainy day fund.”

“This is a uniquely challenging time, but through leadership and collaboration, we have come a long way — and I am encouraged by this progress,” said Hernandez, R-Port Huron. “We have protected Michigan families and taxpayers through tough decision-making, smart planning and the use of already available resources.”

As part of the agreement, the state budget director will present an executive order to the House and Senate appropriations committees this week that reduces state spending. Most state agencies will see reductions, including the executive and legislative budgets.

The supplemental agreement will use federal COVID-19 relief funds and $350 million from the state’s rainy day fund to assist schools, local governments and others affected by the virus.

The bills will include:
• $512 million to support schools;
• $200 million to support universities and community colleges;
• $150 million to local governments; and
• $53 million for $500 in hazard pay to teachers.

“This is an agreement that protects our public schools, keeps our commitment to students and teachers across Michigan, and maintains necessary health care funding in the wake of COVID-19,” Kolb said. “The reductions we are making will get the current fiscal year into balance while still allowing us to support local government and maintain critical government services to our 10 million residents.”

Both the House and Senate are expected to act on the bills this week.

The budget leaders have committed to immediately beginning work on the fiscal year 2021 budget, which begins Oct. 1.

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