Whitmer, Republican legislative leaders reach deal on state budget shortfall

The Michigan Capitol in Lansing
The Michigan Capitol in Lansing(WJRT)
Published: Jun. 29, 2020 at 7:35 PM EDT
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(6/29/2020) - Gov. Gretchen Whitmer and the two top Republican leaders in the Michigan Legislature announced a deal Monday to solve a $2.2 billion budget shortfall this year.

They are planning cuts to schools, colleges, universities and local governments while replacing some of that with federal CARES Act funding to reimburse costs for dealing with coronavirus.

The $2.2 billion in savings includes:

-- $490 million saved through a state government hiring freeze and an unspecified number of layoffs.

-- An additional $340 million saved by enhanced federal Medicaid matching funds for coronavirus.

-- A $256 million cut for K-12 schools and a $200 million cut for community colleges and universities.

-- Spending $350 million from the state's fund reserves.

-- Saving nearly $475 million in public safety spending that can be reimbursed by the federal government.

-- Cutting $98 million from local government funding.

Whitmer and Republicans also agreed on a separate plan to spend nearly $1 billion in Michigan's CARES Act funds.

That deal includes $512 million for K-12 schools and $200 million for colleges and universities to deal with coronavirus, along with $53 million to provide hazard pay for teachers.

Local governments statewide will receive another $150 million for coronavirus-related expenses in addition to the $300 million already allocated for them.

Only $94 million out of Michigan's more than $3 billion CARES Act share remains.

Whitmer, Michigan House Speaker Lee Chatfield and Michigan Senate Majority Leader Mike Shirkey released the following statement about the budget deals:

“COVID-19 has had an unprecedented impact on our state budget. In this time of crisis, it is our responsibility to come together and build a budget that reflects a bipartisan commitment to the things we value most as Michiganders. This agreement provides crucial funding for Michigan families, schools, and communities grappling with costs incurred as a result of the virus. "Our collective priority is a healthy state and a healthy economy. We are committed to working together to address the remaining shortfalls in next year’s budget and we are looking to our partners in Congress for support to help maintain the essential services relied upon by our families and small businesses.”

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