Advancing the Budget Process with Governor Whitmer’s Budget Recommendations
The January 2025 Capitol Perspectives helped set the stage for the start of budget season in Lansing with its coverage of the January Consensus Revenue Estimating Conference (CREC), which offers state fiscal data that “Gov. Gretchen Whitmer and the Legislature are required to use” in developing their budget frameworks (WDET). During last month’s meeting, state economists painted a “rosier revenue [and] budget picture” than some folks anticipated, with “employment and earnings numbers…coming in better than expected…mean[ing] a likely windfall to help pay for K-12 schools…and state government” (WCMU). At the start of February, Governor Whitmer helped advance the budget process and facilitate the more formal “kickoff to…budget season” with the release of her framework at “a joint meeting of the House and Senate Appropriations Committees” (Michigan Advance; MASA 2/7 Legislative Update).
Generally speaking, Governor Whitmer’s proposal would reduce the size of the School Aid Fund from $23.4 billion (FY 2025) to $21.2 billion (FY 2026), but it would include a “4.1% increase in the total funds allocated per-student” and continue “programs like free breakfast and lunches for students and free pre-K for every four year old across the state” (Michigan Advance). In terms of policy specifics, a recent MASA Special Legislative Update provides a complete overview of what made it into Governor Whitmer’s proposed budget for K-12 schools and what did not. Some highlights include:
- School safety and mental health resources: The Executive Budget Recommendation provides “$258 million in ongoing funds for school safety and mental health” (Michigan Advance). In FY 2024, the budget included $328 million for these issue areas, but last year, the initial budget only earmarked “$26.5 million…for per-pupil mental health and school safety” before the legislature passed a supplemental budget allocating an added $126 million for related grants (Michigan Advance). Previously, budget cuts involving these issue areas caused many educators, administrators, and stakeholders to express deep frustration and call for the state to “cover the costs of a 90% cut in state grants they anticipated getting” (July 2024 Capitol Perspectives; Chalkbeat Detroit; CBS News; The Flint Courier News).
- Support for special populations: Governor Whitmer’s framework offers added funding for students who might need added support, including “a 10% increase in the state allocation” to support special education students and “$94 million to support academically at-risk students, English language learners, career and technical education students, and students in rural school districts” (Michigan Advance).
- Funding for Michigan’s new reading law: As covered in the September 2024 Capitol Perspectives, when SB 567 and 568 were passed, there were concerns that they “would put additional burdens…on teachers and school districts” (Michigan Public Radio). In her proposal, Governor Whitmer included “$23 million to provide additional literacy coaches and more instructional time to support student literacy, in line with” these new measures (Michigan Advance).
- The SMART Plan: The Governor’s framework also calls for $250 million for a new Students, Metrics and Results with Transparency (SMART) Plan, mentioned in the January 2025 Capitol Perspectives. It would work to “improve student performance through targeted funding, performance-based incentives and increased engagement with parents” (Michigan Advance). Broken down, $232 million of the funding would be used “for district implementation of best practices,” and $18 million would be “for a School Turnaround Hub and ISD monitoring” (MASA Special Legislative Update).
- MPSERS: The FY 2026 Executive Budget Recommendation has $2.2 billion for the Michigan Public School Employees’ Retirement System (MPSERS), including “$1.5B to cover state contributions exceeding the 15.21% payroll cap on unfunded liability costs for local districts, saving districts $1,100 per pupil – a $360 increase from the previous year” and “$90M to offset 50% of district costs from increased employee healthcare expenses due to the removal of a 3% contribution from educators” (MASA Special Legislative Update). Last year, as detailed in the September 2024 Capitol Perspectives, the debate over MPSERS contributions consumed significant time around the budget and legislative action in the fall.
- CTE: Governor Whitmer’s budget framework would provide “$125M for startup [Career and Technical Education (CTE)] grants, funding up to 250 new programs over five years” and “$41.6M for cost reimbursements” related to vocational education programs (MASA Special Legislative Update).
Importantly, these budget items are only proposals, and Governor Whitmer will need to work with the Michigan Legislature to finalize any of them. This year, the political dynamics surrounding this process are much different from when “Democrats held a trifecta, controlling the governor’s office and both chambers of the Legislature” and “Democratic lawmakers passed the school aid budget on party-line votes” (The Detroit Free Press). To get a budget approved by the Michigan House, Governor Whitmer will need to work with Republicans who “generally described the budget as bloated and called for more restraints on spending” (The Detroit Free Press). With that, state policymakers will need to carefully navigate changing economic conditions. While the January CREC suggested “continued strength in state revenues” allowing plentiful spending, there is “high uncertainty” due to “proposed attacks on federal spending, which makes up 42% of the state budget, and…threatened import tariffs on Canada, which would have significant impacts on the automotive industry and Michigan’s economy more generally” (The Detroit Free Press).
Concerning what is next, “lawmakers in both chambers of the Legislature will each craft their own appropriations bills,” then “a conference committee consisting of members from both the Michigan House of Representatives and Michigan Senate will come together to reconcile differences,” and each chamber of the Michigan Legislature will get to consider the budget (The Detroit Free Press; MASA 2/7 Legislative Update). While “Michigan law states that lawmakers must pass the budget by July 1,” there is “no mechanism to force them to meet that deadline” (The Detroit Free Press). That said, Governor Whitmer appears interested in following this timeline. In fact, during her State of the State, she called for “a balanced, bipartisan budget by the end of June that’s focused on the fundamentals” (2025 State of the State). K-12 district leaders, needing to plan their finances over the summer, will surely hope that lawmakers stick to this timeline and do not drag budget debates into the fall.
Understanding Governor Whitmer’s Priorities Based on the State of the State Address
Each year, another key marker of budget season’s start is the annual State of the State, with the Governor “laying out [their] priorities for the state in front of lawmakers and other state officials” (The Detroit Free Press). On Wednesday, February 26th, Governor Whitmer delivered her penultimate such address (State of Michigan). Tone-wise, the speech was focused on “bipartisan cooperation” and “positivity” (WDET). Such messaging was visible from the start of the address, with Governor Whitmer saying, “I took an oath of office to serve the people of Michigan, and that means all the people of Michigan…no matter who is in the White House or who is on the other side of the aisle in Lansing…I do hope to find common ground with President Trump and work with the Democratic-led Senate and the Republican-led House” (2025 State of the State). It also was present throughout the night, as seen in lines like “our people are not as divided as our politics” and “I think we’re on the same page about lower costs, more jobs, and better results” (2025 State of the State). Concerning policy content, the address prioritized economics, saying “lowering costs is our top priority” and emphasizing the need to make housing, health care, and energy more affordable while boosting wages and reducing tax burdens (2025 State of the State). Though, education topics were not ignored, with Governor Whitmer explaining, “when our kids get a great start, they get a good foundation to build a good life” (2025 State of the State).
Throughout the speech, Governor Whitmer noted a few K-12 policy accomplishments from the last year. For one, she mentioned expanded offerings like free breakfast and lunch for Michigan’s 1.4 million public school students and universal access to free pre-K “so every four-year-old can arrive at kindergarten better prepared” (2025 State of the State). Interestingly, these policies were framed as successes not just for their educational benefits but for their economic effects. For instance, Governor Whitmer explained that free school meals save “families nearly 900 bucks a year per kid in groceries” and that access to free pre-K offers parents savings of $10,000 a year (2025 State of the State). Second, the address reminded observers of expanded access to higher education via the Michigan Reconnect program, the Michigan Achievement Scholarship, and the Community College Guarantee. Finally, when it comes to funding such initiatives, Governor Whitmer celebrated a past budget that “closed the funding gap between schools,” “raised teacher pay,” “cut retiree taxes,” and “trained thousands more educators” (2025 State of the State). She also explained the win of having Michigan’s “financial house…in order,” given the state’s surplus, “all-time high” rainy day funds, decreased debt, strong measured business confidence, GDP growth, employment gains, and higher median household incomes (2025 State of the State).
Regarding future priorities, Governor Whitmer had a few items on her wish list. First, after noting the success of past efforts to expand career and technical education to give “students hands-on experience…so they can land a good job,” she called on the Michigan Legislature to “make the largest investment in career and technical education ever” (2025 State of the State). Perhaps in anticipation of this proposal, the House Education and Workforce Committee spent its first meeting in February “discuss[ing] allowing ISDs to share contracts for CTE programs to help streamline resources sharing and expand access for students in underserved areas” and hearing “testimony regarding HB 4060…which modifies tax requirements for area CTE programs” (MASA 2/21 Legislative Update). Second, in terms of post-secondary experiences, Governor Whitmer promised executive action to “reach more young men and boost their enrollment in higher education and skills training programs” (2025 State of the State). From there, in the section of her speech focused on improved “results,” Governor Whitmer explained a desire to increase the per-pupil foundation allowance to $10,000 per student (2025 State of the State). Though, she highlighted low reading and math proficiency rates and said, “it’s not acceptable” that “we invest more per pupil than most states and achieve bottom-ten results” (2025 State of the State). In response, Governor Whitmer doubled down on the importance of recently enacted legislation that mandates that school districts “use proven science of reading strategies” and “test for dyslexia so they can identify students who need extra help” (2025 State of the State). With that, she positioned her SMART Plan as an important intervention to ensure that added funding is connected to academic results. Lastly, Governor Whitmer noted some education-related focus areas connected with students’ broader well-being. In schools, she called for “bipartisan legislation to limit the use of phones in class,” positing, “it’s hard to teach geography or geometry when you’re competing against memes or DMs” and citing efforts in other states, Europe, and Canada (2025 State of the State). More broadly, after noting that “about 14% of high schoolers use vapes” and that “this addiction has long-term risks that start early,” Governor Whitmer called to change tax policy to tax vapes more like cigarettes (2025 State of the State). Together, the State of the State’s discussed successes and desired actions provide some insight into what issues will dominate the next twelve months of education policy. The central question, however, is the extent to which Governor Whitmer and Michigan Democrats can achieve these goals now that they need to build consensus across the aisle with Michigan Republicans who control the Michigan House.
Updating Readers on Federal Education Policy Developments
Previously, the January 2025 Capitol Perspectives flagged some efforts by President Trump and his administration to “remake public education in the image of his ‘anti-woke,’ populist political movement” (The New York Times). Specifically, it considered an executive order “threatening [districts’] federal funding” if they “recogniz[e] transgender identities or [teach] about concepts such as structural racism, ‘white privilege’ and ‘unconscious bias’”; another executive action “direct[ing] a swath of federal agencies to look for ways to expand access to private school vouchers”; a directive allowing “federal immigration agencies to make arrests at schools, churches and hospitals”; rhetoric calling to “strip the [U.S. Department of Education] of funding and replace its career employees with political appointees”; and the Office of Management and Budget (OMB) announcing a “federal funding freeze” (The New York Times; AP; Chalkbeat Detroit; AP). Even without much resolution of the legal status of these efforts, February saw added efforts by the Trump administration to reshape federal education policy.
To begin, early in the month, President Trump “issued another education-related Executive Order,” in this case “prohibiting transgender women from competing in women’s sports and using women’s restrooms” and “direct[ing] the Secretary of Education to enforce Title IX based on biological sex and to withdraw federal funding from institutions and athletic associations that” violate the order (MASA 2/7 Legislative Update). Then, near February’s end, “the Office of Civil Rights (OCR) issued new DEI-related Title VI guidance warning institutions, including schools, of potential federal funding loss for ‘treating students differently on the basis of race to achieve nebulous goals such as diversity, racial balancing, social justice, or equity’” (MASA 2/21 Legislative Update). Finally, the Trump administration continued its Cabinet creation, with Linda McMahon going through confirmation hearings to be the next Secretary of Education. Throughout this process, she has said that “she intends to keep core initiatives intact – including Title I funding for low-income schools, Pell grants for low-income college students, and Public Service Loan Forgiveness – while vowing to restructure the Department” (MASA 2/14 Legislative Update). However, McMahon has been framed as “a fierce Trump loyalist” who has “stopped short of committing to maintaining the Education Department’s role in administering federal funds” (Politico).
Notably, many of President Trump’s actions already have faced or are likely to experience significant legal challenges. For example, in the last few days, the American Federation of Teachers and the American Sociological Association led a lawsuit alleging that the “memo giving the nation’s schools and universities two weeks to eliminate ‘race-based’ practices of any kind or risk losing their federal money…violates the First and Fifth Amendments” (AP). Likewise, the OMB’s funding freeze, discussed in the January 2025 Capitol Perspectives, remains frozen itself due to “roadblocks in the courts, as dozens of lawsuits have been filed” (CBS News). Locally, many Michigan leaders have vowed to challenge these measures. Emblematically, State Superintendent Michael Rice released a memo “emphasizing that educators have a moral and professional responsibility to protect and support LGBTQ+ students” and said that “Michigan schools’ efforts to incorporate curriculum that reflects its diverse student body won’t be changed by President Donald Trump’s executive order” (Chalkbeat Detroit).
With plentiful executive actions and numerous efforts to block them, there is significant uncertainty about what is expected of K-12 schools. Anxious observers are unlikely to be satisfied soon, given projections that it is likely to “take months for the full impact” of these measures to be understood (Chalkbeat Detroit). As folks wait, a variety of education associations and advocates have offered resources to support school and district leaders working through the changing policy environment. Representatively, the School Superintendents Association (AASA) released an “Analysis on Title VI Compliance,” and the Michigan Association of Superintendents & Administrators (MASA) published a resources clearinghouse (MASA 2/21 Legislative Update). Likewise, MASA shared a FAQ document and presentation slides from an event they held concerning the Trump administration’s new executive actions, and Chalkbeat Detroit shared a letter from “the American Civil Liberties Union of Michigan and the Michigan Immigrant Rights Center…to superintendents outlining best practices their districts should follow” considering the Trump administration’s changes to immigration enforcement (MASA 2/7 Legislative Update). Altogether, these tools are sure to help educators and administrators navigate uncertain waters. Nonetheless, with constantly changing federal directives and politics, readers will have to keep an eye on future editions of Capitol Perspectives.
For questions or more information, please contact Tyler Thur in the Office of K-12 Outreach at thurtyle@msu.edu.