The Michigan Senate passed a $56 billion budget which will increase the amount spent by the state. The budget was passed by the Michigan House on Tuesday, and next it goes to Governor Rick Snyder who will likely sign it.
The Detroit Free Press noted that the budget package for 2018 “includes $39.9 billion to cover most state government operations and $16.6 billion for education spending.” Among other measures, the budget allocates an additional $48 million to Flint to handle the city’s water crisis, $24.3 million to handle Michigan’s growing medical marijuana business, and $120 million to help economically disadvantaged students.
The budget passed mostly along party lines in both the House and the Senate, which are both controlled by the Republican Party. While the budget is $1.2 billion higher than last year’s, Republicans said that the budget percentage increase was smaller than the inflation rate and thus represented a smaller government, which would benefit Michigan’s citizens.
Changing Teacher Pensions
Democrats criticized the budget for not allocating enough to fix roads and failing to help residents who were falsely accused and fined for unemployment insurance fraud. But the biggest controversy around this new budget is how it will change retirement benefits for Michigan teachers as it seeks to eliminate pensions.
Republicans in Michigan and other states have pushed against pension plans for government workers, claiming they bankrupt state governments in the long run. The new benefits plan will instead enroll new teachers into a 401(k)-only plan and require teachers to contribute more of their salary if they wish to opt out and sell a house instead. This will replace the old plan which saw teachers receive a pension and a smaller 401(k) plan.
Republicans hope that teachers will stick with the 401(k) plan, but the proposal proved to be highly controversial as opponents worried about how lower benefits would drive teachers away. The teacher benefits bill barely passed with a 55-52 majority which saw all Democrats and several Republicans vote in opposition.
The budget will not be signed for a few days as Snyder is currently in Europe on a trade mission.