LANSING, Mich. (AP/WOOD) — Gov. Gretchen Whitmer has proposed a $74.1 billion state budget that would significantly boost education spending, pay bonuses to frontline workers and cut taxes for retirees and low-income families.

The election year plan comes with Michigan awash in surplus revenues and federal pandemic aid.

“…We now have a $7 billion surplus. And it’s time to make investments that are long overdue and that’s what this budget does,” Whitmer said a press conference in Grand Ledge, near Lansing, Wednesday afternoon.

She said she and her team designed the budget after conversations with stakeholders of diverse opinions.

“It’s important that this budget reflects Michigan values, not one party’s values, but the values of our state,” Whitmer said. “This budget really puts Michiganders first. It delivers on issues that matter most to families.”

If the Legislature approves her proposal, there would be a 5% increase in base aid for K-12 schools, universities and community colleges, and a 10% increase in revenue-sharing payments to municipalities.

Whitmer said her per-pupil funding proposal of $9,135 would be the highest ever.

Saying it would improve retention in schools, which are tight on staffing, she called for a $2,000 bonus this fall and another $2,000 next year for every school worker ranging from administrators to teacher to custodians, plus a total of $11,000 in bonuses for teachers and certified staff who stay with their districts through the fall of 2025.

Gov. Gretchen Whitmer discusses her budget proposal during a press conference in Grand Ledge on Feb. 9, 2022.
Gov. Gretchen Whitmer discusses her budget proposal during a press conference in Grand Ledge on Feb. 9, 2022.

In addition to calling for sizable funding hikes, Whitmer proposed the creation of a new $1 billion school infrastructure modernization fund.

“These are funds that can be used over several years on new construction or renovation,” the governor explained.

“The reason that we gave the budget presentation at Grand Ledge High School is because we really wanted to emphasize how critical these investments in education are,” Lt. Gov. Garlin Gilchrist told News 8 in a video call Wednesday. “The largest state funding increase in K-12 education in 20 years, the record per-pupil funding, the support for mental health professionals and mental health support services for our students, the retention and recruitment bonuses for education professionals. We’re really proud of what this means for setting the trajectory for success in Michigan’s education system.”

Whitmer is also proposing $6.3 billion in infrastructure spending — $1 billion more than last year — for everything from roads to bridges to airports to railroads. Some of the money would come from the federal bipartisan infrastructure act signed into law last year. Focuses include updating Michigan’s infrastructure to support more electric vehicles, improving state parks and upgrading water infrastructure.

The governor also wants programs to help recruit and train more first responders amid a worker shortage in that sector, including Michigan State Police.

Whitmer said her budget includes proposed tax cuts for the working class and those who are retired, plus rebates to encourage people to buy electric vehicles.

“The last piece is putting money in people’s pockets,” Gilchrist told News 8. “Whether it’s rolling back the tax on retirement income or tripling the earned income tax credit, that’ll pull hundreds of thousands of Michigan working families out of poverty.”

The governor added her budget would make a deposit in the state’s rainy day fund.

Whitmer, a Democrat, and the Republican-led Legislature will iron out the budget in the coming months, though Republicans have said they favor broader tax relief.

“I would hope that it will be a straightforward budget process because we do have the resources and this is the moment that we need to invest them in priorities that will pay off over the long term,” Gilchrist said. “We have legislators that are ready to come to the table with that attitude so we can get this done for the people of Michigan.”

The next fiscal year begins Oct. 1.

—News 8 political reporter Rick Albin contributed to this report.