Late Wednesday night, the House and Senate passed an $82 billion state budget (HB 4437), the largest in the state’s history, in bi-partisan fashion. A budget agreement, which once seemed impossible, quickly came together late in the afternoon and in a matter of hours was passed by both chambers and sent to the Governor for her signature.

In a surprise move during the final hours of budget negotiations, proposed double digit increases in statutory revenue sharing were reduced to a 7% increase as priorities shifted. Within the increase, 2% of that is one-time and must be specifically dedicated to public safety initiatives, and 5% is on-going, but 1% is tied to a requirement that local government must obligate all their ARP money by the end of this year, a full year before the federal guidelines require.

This increase will result in an on-going $14 million increase in statutory revenue sharing, with an additional $6 million in one-time funding dedicated to public safety. Estimated allocations have not yet been published, but we will make those available once they are.

There was also a significant change made to the revenue sharing reporting requirements that were left over from the days of EVIP. Communities will no longer be required to do a citizen’s guide, performance dashboard, or projected budget report. The only reporting requirement remaining is the debt service report. Treasury is required to create new guidelines for this, post them on their website, and distribute them to cities, villages, townships, and counties by October 1.

There were several items included in this budget that aligned with our priorities, including $50 million for both the Revitalization and Placemaking Grant Program and the Housing and Community Development Fund.  Also included was $5 million for communities to access grants up to $50,000 to help reform their zoning to increase housing supply and address affordability issues. Additionally, another $10 million was dedicated to missing middle housing. With housing being the number one issue for many of our members, this investment will continue to help communities address their needs. (Additional highlights are listed below)

The budget also includes approximately $1.5 billion in direct enhancement grants. A significant chunk of those resources will fund public safety projects, economic development initiatives, and critical infrastructure projects in communities across Michigan. These one-time investments provide needed funding for community specific projects, but the resources available to appropriators this year will not be available next year. If we want to maximize these investments, and state officials are serious about the importance of vibrant places as a key economic strategy going forward, they must prioritize on-going investment that will improve quality of life, attract talent to grow our state’s population, and ensure opportunities for our citizens to thrive.

Moving forward, we remain committed to advocating for a system that will protect local resources, prioritize funding for core services, and recognize that the communities we represent are the economic and social fabric of our state’s collective future.

Additional Budget Highlights:

Revenue Sharing

• $36 million (7% increase) in revenue sharing to help counties, cities, villages, and townships. 2% is specifically dedicated to funding for local public safety initiatives.
• $62 million in additional funding for constitutional revenue sharing.

Roads

• $416 million to fix roads and build public infrastructure to improve quality of life.
• $80 million for local bridge bundling program to help local government repair and replace aging bridges.

Water

• Nearly $600 million for water infrastructure across Michigan, helping replace thousands of lead service lines and rebuild sewers.
• $20 million for contaminated site cleanup to protect communities from impacts of former industrial sites.

Transit

• $70 million to improve transit access.
• $45 million for local bus operations: support affordable transportation options.
• $3.5 million for shared streets and spaces to help cities and transit agencies create options for pedestrians and bicyclists.

Energy and Environment

• $30 million for renewable ready communities to help local governments install renewable energy at scale.
• $21.3 million for electric vehicles and renewable energy charging infrastructure.
• $20 million to enhance air quality and remediate contaminated sites in historically disadvantaged and underrepresented communities.
• $25 million for home repairs and upgrades that enable clean energy.

Natural Resources

• $64 million for the Brandon Road Lock and Dam, protecting the Great Lakes from Invasive Carp.
• $66 million to make upgrades at Belle Isle State Park and operate Flint State Park.

Economic Development

• $350 million for the Make it in Michigan Competitiveness Fund to win federal resources from the Bipartisan Infrastructure Law, the CHIPS and Sciences Act, and the Inflation Reduction Act.
• $1.5 billion (4th highest in the nation) through the Broadband Equity, Access, and Deployment (BEAD) Program to expand high-speed internet access to over 200,000 Michiganders in unserved and underserved areas across the state.
• $2 million to help fund the recently established Growing Michigan Together Council so they can focus on growing our population and economy while protecting our natural resources.
• $50 million in sustainable, recurring funding for the Housing and Community Development Fund. This builds on $150 million investment in the fund earlier this year.
• $50 million in sustainable, recurring funding for Revitalization and Placemaking Grants, used to make communities more attractive places to live and work by building housing, parks, and beautifying other places. This builds on $100 million investment in the program earlier this year.

One-Time Investments to Support Specific Public Safety Investments

• $235 million to assist police, firefighters, and emergency medical service providers.
• $156 million for public safety equipment, technology, and facility improvements.
• $30 million for recruitment, retention, and well-being of first responders.

John LaMacchia is the League’s director of state & federal affairs. He can be reached at [email protected] or 517-908-0303.