In a crucial financial move, the Michigan Senate has approved a two-bill initiative aimed at balancing the books for the state’s previous fiscal year. This legislative decision plays a significant role in managing the state’s creditworthiness and financial health.
The first bill reallocates funds to cover discrepancies in expected and actual expenditures in areas such as Medicaid and veterans’ services. Meanwhile, the second bill directs $3.3 million from the Federal Coronavirus State Fiscal Recovery Funds to bolster the state’s Community College Academic Catch-Up Program. For further details on these bills, refer to this document and this analysis.
Sarah Anthony, the chair of the Senate Appropriations Committee, emphasized the importance of these bills by stating, “When we’re thinking about bonding for new projects, it is a very technical fiscal responsibility. So, if we do not get this done, you know, will it be the end of the world? No, but it does show that folks who are minding the state’s coffers aren’t finishing the business of the previous fiscal year.”
The passage of these bills was not without contention. Senate Republicans attempted to amend the legislation to include additional funding for infrastructure and to curtail inclusion programs at educational institutions, along with proposing a reduction in the state’s income tax rate. Notably, Senator Joe Bellino proposed redirecting $500 million from business incentives to improve local roads, arguing that this was a pressing need. Despite these efforts, the amendments were not adopted.
Simultaneously, House Republicans are advocating for a separate proposal designed to ensure continued funding for certain state agencies if a new budget is not approved in time. This plan, intended to avert a government shutdown, has been dismissed by Anthony as a “non-starter,” though she remains hopeful about reaching an agreement with the House.
“In the close of books supplemental that the House did present, there was a lot of alignment. We are about 85% there because most of this is very technical. There are a few points of differences, but I don’t think it’s anything insurmountable,” Anthony expressed optimistically.
According to state law, the budget director must release a comprehensive financial report within six months following the fiscal year’s end. Lawmakers have until the month’s end to fulfill this requirement.
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