July 11th-22nd, 2022

After the FY 23 School Aid Fund Budget (Senate Bill 845) and the General Omnibus Budget (House Bill 5783) won bipartisan approval from the Michigan State Legislature in the early morning hours of July 1, the budgets were transmitted to Governor Gretchen Whitmer.

On July 20, the Governor signed into law House Bill 5783, the Fiscal Year 2022-23 General Omnibus budget, which funds all state departments and agencies for the next fiscal year beginning October 1, 2022.

The General Omnibus budget, part of a historic $76 billion bipartisan budget agreement, includes $15.2 billion in General Funds. The School Aid budget, signed into law on July 14, totaled $17 billion.

Several new, one-time investments were included in the budget agreement that were not built into the budget as on-going items, ostensibly to avoid structural budget challenges in the future. $180 million was deposited into the state’s rainy-day fund, which brings that fund to $1.6 billion – an all-time high.

With billions in federal funds remaining on the table yet to be appropriated, additional action around tax relief and supplemental appropriations measures could come later this summer.

All FY 23 appropriations materials can be found here

On July 19, Court of Claims Judge Douglas Shapiro ruled in Mothering Justice vs. Dana Nessel that the Legislature violated the Michigan Constitution when, in 2018, it amended two citizen initiatives. One initiative would raise the minimum wage to $12 per hour over a period of years with an inflation adjustment in place once the maximum was reached. It would also eliminate the lower tipped minimum wage. A separate initiative would allow employees to earn one hour of paid sick leave for every 30 hours worked up to a maximum of 72 hours per year.

Prior to the 2018 election, the Republican-led legislature took up and passed the two ballot proposals, thus preventing them from going before voters. After the election, the Legislature then voted to amend the ballot proposals, effectively limiting the pool of employers subject to the law to those with 50 or more employees and reducing the sick time hours that could be earned.

The judge ruled that nothing in the Michigan Constitution empowers the Legislature to adopt and amend an initiative petition in the same legislative session, and that doing so effectively undermines the ability of voters to decide.

Michigan Attorney General Dana Nessel and other groups like the AFL-CIO praised the order. While several groups from the business community, including the Michigan Chamber of Commerce and the Michigan Restaurant and Lodging Association, warned the ruling could have a crippling effect on employers and employees.

A stay is expected to be filed. Business groups may also choose to appeal.

On Friday, July 15, Governor Gretchen Whitmer signed Executive Order 2022-5, which creates the Michigan Parents Council – an advisory body housed within the Michigan Department of Education. The Council must include a diverse representation of seven parents, guardians or family members appointed by the Governor, as well as a representative appointed by the state superintendent, and the Governor’s K-12 policy advisor.

The Council will be charged with convening regional roundtable discussions covering, at a minimum, strategies, and approaches for combating unfinished learning and supporting children’s mental health. Themes and ideas gleaned from the discussions will help inform policy recommendations in the Governor’s next budget recommendation.

A report must be submitted by December 9, 2022. The council will dissolve on March 1, 2023.

On July 11, two ballot campaigns submitted signature counts far exceeding the 425,059 valid signature threshold necessary to be considered for the November ballot.

Officials with the Promote the Vote ballot initiative announced on July 11 they had submitted over 650,000 signatures to secure a spot on the November ballot. The initiative would enshrine in the Michigan Constitution a “fundamental right to vote”, streamlining access to absentee voting, among other things.

The effort contrasts with a Republican-led effort – Secure MI Vote – which has yet to submit the requisite number of signatures to be added to the ballot.

On the same day, officials with the Reproductive Freedom for All initiative submitted over 750,000 signatures – the most of any ballot proposal in the state’s history – for a proposal that would enshrine abortion rights in the Michigan Constitution.

The Bureau of Elections is currently reviewing the validity of the signatures.

On July 12, the Senate Fiscal Agency issued its June revenue report showing sales tax collections for June came in around $1 billion – 13.6 percent over 2021 and $125.6 million higher than expectations set during the May Revenue Estimating Conference. It was also the first time monthly sales tax revenues have exceeded $1 billion.

Combined, General Fund and School Aid Fund collections for the month totaled $3 billion – 10.7 percent above 2021 levels and $277 million higher than forecasts.

The House Fiscal Agency issued similar numbers in its June report, showing total collections at $3.7 billion for June - $341 more than June 2021. Year-to-date the agency said state revenues were $3.5 billion more than the 2020-21 fiscal year.