Michigan legislators, unlike their federal counterparts, are bound by the state constitution to balance their budgets. This means they can spend no more in a year than they expect to collect in revenue, plus anything they may have saved in the past. This constitutional standard is a limit, not a recommended spending level. Lawmakers can always practice restraint, and they ought to.
The latest state budget increases state spending — which excludes federal revenue and the small bits of local and private spending in the budget — from $48.4 billion to $50.2 billion. This is a 3.8% increase. It now costs about $5,000 to run the state government for every man, woman, and child in Michigan.
This is substantially higher than what the state used to spend. Before the pandemic, the state spent $34.4 billion. Had lawmakers practiced restraint and increased the budget only by the rate of inflation, they would have saved taxpayers $6.7 billion. That’s a lot of money that could have been used to catch up on debts, save for a rainy day, or be left in taxpayers’ pockets.
To be fair, people have gotten some things for their lawmakers’ decision to spend more. Roads are now being repaired at roughly the rate they fall apart. Schools also get more money: roughly $23,900 for every student including state, local, and federal sources.
There has been a darker side to lawmakers’ increased spending, however. They have allocated $4.6 billion in pork funding over the past eight years, or a little more than $1,000 per household. It’s down to $180 million in the most recently approved budget, half the amount allocated in the previous fiscal year.
Lawmakers also approved a lot of selective business subsidies. They’ve authorized $8.6 billion in business subsidies during Whitmer’s two terms. Much of this remains unspent, though not all of it. Major deals signed during the Whitmer administration pledged $2.7 billion for 20,595 jobs, and $1.9 billion has been spent so far for just 602 jobs — a massive difference between what was expected and what has transpired.
It all means that lawmakers can do better with less. We continue to encourage them to operate at sustainable levels and increase the budget by no more than inflation plus Michigan’s population growth. (The population, unfortunately, has been stuck at around 10 million people for a generation.) A little bit of restraint can pay dividends for taxpayers.
14%
Increase in state government spending from the state’s taxes, when adjusted for inflation, over Gov. Whitmer’s tenure.
$1,000
Amount spent on pork projects per household over Whitmer’s tenure.
2/3rds
Proportion of the Legislature needed to approve local or private spending, such as pork projects.
