Gov. Gretchen Whitmer’s (D) 2023-24 budget proposal calling for about $500 million to fund efforts to reach Michigan’s net-zero goals won praise last week from environmentalists.

Whitmer’s budget, the first of her second term in office, proposes slightly more than $79 billion in total spending, meaning the climate change mitigation spending makes up less than 1%.

But Derrell Slaughter, with the Michigan office of the Natural Resources Defense Council, said Whitmer’s “budget proposal points to the clean energy transition moving forward in Michigan.” While the investments are small overall compared to the entire budget, Slaughter said they would boost jobs, cut consumer electricity bills and lower overall pollution.

And when paired with other spending proposals on issues improving home weatherization, the budget will help many Michiganders, especially those in lower-income households, save money, said Lisa Wozniak, executive director of the Michigan League of Conservation Voters. Whitmer’s proposed budget “puts money back in Michiganders’ pockets while investing in our communities, expanding clean energy and protecting our health,” Wozniak said.

Included in the spending plan is:

• $150 million in grants for school districts to run electric school buses;
• $45 million, mostly in federal funds, for the Michigan Clean Fleet Initiative to encourage counties, airports and regional transit systems to upgrade to electric vehicles;
• $40 million in one-time state general fund monies to help local governments get ready to develop renewal resources;
• $43 million to help harden the state’s electric grid against natural disasters and severe weather incidents; and
• $100 million for environmental justices projects.

Whitmer also called for the state to temporarily suspend the sales and use taxes on the first $40,000 of the cost of an electric vehicle.

Charles Griffith with the Ecology Center said the organization would continue lobbying for even more funds to meet the goals of the MI Healthy Environment Plan, but he called Whitmer’s proposal “a great step forward.”

Michigan’s fiscal year runs from Oct. 1 to Sept. 30, and typically the Legislature completes work on the budget by early summer.

The budget has been criticized by Republicans for proposing to spend almost all the nearly $9 billion surplus Michigan received from the federal government, leaving just $250 million that would be allocated to the state’s Budget Stabilization Fund, used during economic recessions to minimize budget cuts.

Republicans also worried the plan is designed to forestall a required income tax cut if the state finds itself with a large budget surplus. Top state officials have not been shy about saying an alternative tax proposal pushed by Whitmer is designed in part to keep the required income tax rate cut from taking place, and thus preventing the political anguish of trying to raise the rate in the event of a recession.

Democrats narrowly hold the majority in both houses of the Legislature: by just one vote in the Senate, and two votes in the House of Representatives.