Whitmer State of the State 2024: More money for housing, college, childcare
- Whitmer called for 10 policy goals, including rebates for electric vehicles, tax incentives and a $5,000 family child care credit
- The governor’s sixth State of the State speech comes as Democrats have temporarily lost their majority of the House
- Republicans are unlikely to support most, if not all, of Whitmer’s proposals
LANSING – Michigan Gov. Gretchen Whitmer used her sixth annual State of the State Address on Wednesday to call for new spending on affordable housing, business incentives, universal pre-school and free community college.
The speech to a joint session of the state Legislature reflected scaled-back expectations for 2024, as Democrats start the legislative session without the House majority that helped Whitmer enact sweeping changes in 2023.
Whitmer outlined roughly 10 proposals – matching the number of classic rock references she made in a speech themed around what she called the “big hair and bold leather jackets” of the 1980s.
Still, the governor’s plan to spend $1.4 billion on affordable housing would be “the largest investment” of its kind “in Michigan history,” she said.
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Other proposals would “make life more affordable” in a time of high inflation.
“No matter who you are or where you come from, if you work hard, you should be able to provide for your family and have a fair shot at a better future,” Whitmer said.
Whitmer’s address came amid mixed reviews of the Michigan economy, which appears "strong and stable" compared to recent pandemic years, according to economists and state officials.
But Michigan is lagging in median income and educational outcomes while falling behind on infrastructure, community well-being and job opportunities, according to a recent report by the governor's population growth council.
The state is losing more young people than it is attracting, and it's aging faster than its neighbors, a reality that poses significant challenges for policymakers, the council concluded.
The Michigan Education Association called Whitmer's twin proposals for universal pre-school and free community college a "game changer,” and legislative Democrats said they were excited to get to work on the agenda.
But Republicans criticized Whitmer’s speech as a "greatest hits" compilation that lacked concrete ideas to fix vexing problems.
Rep. Phil Green, R-Millington, said he feared the governor’s plans would “take us back to the 80s.”
"She talked more about the Detroit Lions than she did about a real plan to fix the road or a plan to solve ...our education scores," said House Minority Leader Matt Hall, R-Richland Township.
All of Whitmer’s proposals would have to be funded and approved by the Legislature. Her plans for 2024 include:
Whitmer wants to spend nearly $1.4 billion to build or rehabilitate 10,000 housing units across the state.
“The rent is too damn high, and we don’t have enough damn housing,” she said. “Our response will be simple: build, baby, build!”
It’s not immediately clear where the money would come from, but Whitmer spokesperson Stacey LaRouche told Bridge Michigan that the state government “has the funding to build 10,000 new homes.”
Republicans were skeptical, however.
The plan is "all about keeping up with the Newsoms," Senate Minority Leader Aric Nesbitt, R-Porter Township, argued earlier Wednesday, referencing California Gov. Gavin Newsom, who like Whitmer has generated buzz about future presidential ambitions.
California spent billions on affordable housing in recent years but reportedly built less than projected because of unexpectedly high costs, Nesbitt noted.
"This is the challenge," he said. "Instead of motivating the private sector... they're trying to pick winners and losers."
Bringing back good jobs
As she continues to try to stimulate job creation, Whitmer is backing plans to bring back and expand the “Good Jobs for Michigan” business incentive program started by her predecessor, Republican Gov. Rick Snyder.
Renamed the High-wage Incentive for Regional Employment program, or HIRE, the plan would allow businesses to “capture” some of the income taxes paid by employees in newly created jobs.
Legislation introduced last year but not yet voted on by the Michigan Senate would provide an income tax capture for businesses that create at least 50 new jobs with annual wages exceeding 175% of the regional median.
The state would be allowed to commit up to $100 million in tax capture revenue to qualifying businesses each year, up to a total of $1.3 billion through 2038, making it richer than the Snyder era program that was limited to $200 million total.
Nesbitt, the Republican Senate leader, dismissed the legislation introduced last year as an attempt to reward "woke corporations" and "every little favored left-wing Democratic interest group."
Among other things, the legislation would prioritize tax captures for companies that advance "diversity, equity and inclusivity" in the state, utilize clean energy sources and honor worker decisions to form unions.
Nesbitt opposed Snyder's Good Jobs for Michigan program when he served in the House — and still does, he told reporters Wednesday. "I've been pretty consistent on that."
The governor also pitched a new "innovation fund" to support start-up firms, and she backed a House-approved plan to bring back a research and development tax credit program for businesses.
Free community college
Whitmer confirmed Wednesday that she wants to make the first two years of community college tuition free for high school graduates in Michigan.
It’s unclear how much that would cost.
The Whitmer administration has worked with both Republican- and Democrat-led Legislatures to approve earlier measures that expanded college affordability.
In recent years, the Michigan Reconnect program has provided funds to help adults 25 and old attend community college tuition-free. Last summer, leaders approved a temporary expansion of the program for people aged 21 to 24.
The state has also launched a new scholarship program to help high school graduates attend a career training program, community college, private or public 4-year college or university.
Free pre-K for all
Whitmer previously called for free preschool in the state by the end of her second term but accelerated that plan Wednesday, proposing to fund pre-k for "every single 4-year-old in Michigan, two years ahead of schedule."
“Let this be a message to parents in other states: Come to Michigan,” Whitmer said. “We got your back every step of the way, and we’ll save you 10 grand on your child’s education.”
Even if the Legislature provides funding for all students to attend pre-K, providers may still face troubles with finding enough staff.
In the most recent education budget, the Legislature boosted pre-K funding with an additional $90.9 million to increase the amount per student, expand student eligibility based on household income, allow programs to expand the days and weeks of programming and increase student transportation.
The legislature also deposited $200 million into a new reserve fund that can be used if costs exceed initial appropriation.
The Michigan Department of Education previously oversaw the Great Start Readiness Program. Whitmer moved the program to her new education agency called the Michigan Department of Lifelong Education, Advancement, and Potential.
$5,000 family caregiver tax credit
Whitmer also confirmed plans for what she is calling the "Caring for MI Family Tax Credit,” which would provide up to $5,000 in tax relief for families paying for care like counseling, transportation and nursing or respite services.
The governor said the goal is to lift a burden off of unpaid caregivers, who often spend significant sums out-of-pocket to pay for their loved ones.
Electric vehicle rebates
In her speech, Whitmer urged lawmakers to pass her Michigan Vehicle Rebate plan, a $25 million program that would offer up to $2,500 in rebates for drivers buying a new car: $1,000 for any vehicle, $2,000 for electric vehicles and an extra $500 if the vehicles were union-made.
“We want our autoworkers and our auto industry to thrive right here in Michigan,” Whitmer said. “With the MI Vehicle Rebate we can lower costs and support the ongoing transition to an all-electric, union-made future.”
It’s the third time Whitmer has proposed a rebate or tax break to encourage electric vehicle sales, but past efforts did not gain traction and have never received needed funding.
The incentive proposal comes as the price gap is narrowing between electric and conventional cars: The average transaction price for EVs in July was $53,469 compared to $48,334 for gas-powered vehicles, according to Cox Automotive.
“This proposal makes you wonder if Gov. Whitmer even knows what the cost of a new car is," Mary Drabik, a spokesperson for the conservative Michigan Freedom Fund said in a statement. "$1,000 for a gas car and $2,500 for an EV doesn’t even cover the cost of the interest on the loan.”
Finish spending road money
Whitmer used her sixth annual address to hearken back to her 2019 campaign promise to “fix the damn roads.”
But she stopped short of announcing any new plans. Instead, the governor called on the Michigan Department of Transportation to authorize the final $700 million of her $3.5 billion road bonding plan that began 2020, in order to cover projects on Interstate 94, Interstate 696 and others.
Last year’s budget boosted total state transportation funding by about $500 million, but $118 million of that was to pay off debt from the bonding program, and Whitmer’s own population council later reported that the state needs another $3.9 billion each year to really fix the problem.
The governor has expressed interest in — but not yet committed to — more aggressive ideas to overhaul the state’s road funding scheme, such as moving to a miles-driven tax or turning some highways into toll roads.
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