• Governor Presents 2023-2024 Budget
• Senate Passes Removal of Retention in Third Grade Reading Law
• Senate Committee Adopts Expansion of Civil Rights Law
• Tax Change Package Passes House, Held up in Senate

Governor Presents 2023-2024 Budget

On Wednesday, Gov. Gretchen Whitmer presented her 2023-2024 budget to the Legislature. This officially starts the budget season in Michigan. 

In her budget, she included a $485 per-pupil increase to raise the foundation allowance to $9,608; this is a 5% increase. The proposal spreads that 5% increase to special education, English Language Learners, rural/isolated districts, at-risk students and the Great Start Readiness Program. The GSRP increase also includes an expansion of eligibility from 250% of the poverty level to 300%, taking steps toward universal access for all 4-year-olds.

A new item for her budget this year is to expand the free and reduced lunch and breakfast program to all students. This became a MASB legislative priority this year after our members saw the benefit through the school years that the federal government allowed the waiver. Now that the waiver has expired, the Governor has stepped up to continue to make sure all our students receive healthy meals and we are excited to work with her on this initiative.

MASB issued a statement in support of many of the components of the proposal. We will also have a more detailed analysis available on our website soon. The various appropriations subcommittees will now begin hearings on her proposal and start crafting their budgets.

Senate Passes Removal of Retention in Third Grade Reading Law

The Senate passed Senate Bill 12 on Tuesday by a vote of 22-16. This bill would repeal the mandatory retention sections of the third grade reading law and state that if a child is still not reading at grade level as they move into fourth grade, the reading intervention program for that child would continue.

Amendments adopted during debate on the Senate Floor further clarified the supports that would follow a student and require the Michigan Department of Education to send letters to the parents or guardians of students who are behind grade level explaining their students’ reading ability and encouraging them to seek supports from the district.

The bill is now before the House Education Committee.

Senate Committee Adopts Expansion of Civil Rights Law

On Thursday, the Senate Civil Rights, Judiciary and Public Safety Committee approved a bill to expand the Elliott Larsen Civil Rights Act. Senate Bill 4 would include sexual orientation and gender identity and expression as protected categories under the Act.

The Committee heard from numerous individuals and groups, including business, in support of the expansion and the protections it would bring with it. A small number of people testified in opposition, worried that it could be abused and used against other people.

MASB supports the bill, which is now before the full Senate for its consideration.

Tax Change Package Passes House, Held up in Senate

After lengthy negotiations, House Bill 4001 was adopted by Conference Committee on Wednesday and sent to the House for its approval before going to the Senate. Because it is a conference report, no amendments may be made to it; it is simply a yes or no vote.

Under House Bill 4001 (CR-1), the Earned Income Tax Credit would increase from 6% to 30% and taxpayers could choose between current law on how their retirement or pension incomes are taxed or be subject to new limits that will be fully phased in by 2026. Under the pension tax rollback, the School Aid Fund will be protected by increasing the amount of income tax revenue that is dedicated to the Fund.

The bill also includes a $180 rebate per income tax filer as an advance refund payment for the 2023 tax year and amends the distribution of the revenue collected from the corporate income tax to pay for the rebate.

Finally, the bill includes a $500 million deposit into the Strategic Outreach and Attraction Reserve Fund, which is an economic tool to incentivize businesses to locate in Michigan. This has been the sticking point for some legislators. Some Democrats see it as a corporate handout and some Republicans see it only as a way to avoid the income tax reduction trigger.

After two days of conversations in the House, the bill was finally passed on Thursday by a vote of 56-54. One Democrat, Rep. Dylan Wegela (D-Garden City), voted no and one Republican, Mike Mueller (R-Linden), voted yes. The bill was then sent to the Senate for its consideration.

While the Senate Democrats were still in caucus, the Senate Republicans made a procedural move and adjourned the Senate for the day. This delayed the vote on the bill. It is expected to be brought again up on Tuesday.

Once passed by both chambers, it will go to the Governor for her expected signature. The question remains if it will be granted immediate effect to allow the changes included to take effect and potentially stop the trigger to lower the income tax. Expect more maneuvering over this priority of the Governor, but we do expect the bill to eventually become law.