APPROPRIATIONS REPORT Part I - Governor's Recommendations

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APPROPRIATIONS REPORT Part I - Governor's Recommendations FY 2020-21 APPROPRIATIONS REPORT Part I - Governor's Recommendations February 2020 Senate Fiscal Agency Christopher Harkins, Director - Lansing, Michigan - (517) 373-2768 www.senate.michigan.gov/sfa THE SENATE FISCAL AGENCY The Senate Fiscal Agency is governed by a board of five members, including the majority and minority leaders of the Senate, the Chairperson of the Appropriations Committee of the Senate, and two other members of the Appropriations Committee of the Senate appointed by the Chairperson of the Appropriations Committee with the concurrence of the Majority Leader of the Senate, one from the minority party. The purpose of the Agency, as defined by statute, is to be of service to the Senate Appropriations Committee and other members of the Senate. In accordance with this charge the Agency strives to achieve the following objectives: 1. To provide technical, analytical, and preparatory support for all appropriations bills. 2. To provide written analyses of all Senate bills, House bills, and Administrative Rules considered by the Senate. 3. To review and evaluate proposed and existing State programs and services. 4. To provide economic and revenue analysis and forecasting. 5. To review and evaluate the impact of Federal budget decisions on the State. 6. To review and evaluate State issuance of long-term and short-term debt. 7. To review and evaluate the State's compliance with constitutional and statutory fiscal requirements. 8. To prepare special reports on fiscal issues as they arise and at the request of members of the Senate. The Agency is located on the 8th floor of the Victor Office Center. The Agency is an equal opportunity employer. Christopher Harkins, Director Senate Fiscal Agency P.O. Box 30036 Lansing, Michigan 48909-7536 Telephone (517) 373-2768 www.senate.michigan.gov/sfa SENATE APPROPRIATIONS COMMITTEE Senator Jim Stamas, Chair Senator Jon Bumstead, Vice Chair Senator Tom Barrett Senator John Bizon, M.D. Senator Kimberly LaSata Senator Michael D. MacDonald Senator Peter MacGregor Senator Aric Nesbitt Senator Rick Outman Senator Jim Runestad Senator Wayne Schmidt Senator Roger Victory Senator Curtis Hertel, Jr., Minority Vice Chair Senator Rosemary Bayer Senator Adam Hollier Senator Jeff Irwin Senator Sean McCann Senator Sylvia Santana TABLE OF CONTENTS Page OVERVIEW SUMMARY .............................................................................................................................. 1 Table 1: FY 2020-21 Governor's Recommendation by Source of Funds ............................................... 3 Figure A: Gross Appropriations by Source of Funds FY 2020-21 Governor's Recommendation ........... 4 Table 2: Gross Appropriations FY 2019-20 Year-to-Date Versus FY 2020-21 Governor's Recommendation ...................................................................................................................... 5 Figure B: Gross Appropriations by Major Category FY 2020-21 Governor's Recommendation ............. 6 Table 3: Adjusted Gross Appropriations FY 2019-20 Year-to-Date Versus FY 2020-21 Governor's Recommendation ................................................................................................... 7 Figure C: Adjusted Gross Appropriations by Major Category FY 2020-21 Governor's Recommendation ...................................................................................................................... 8 Table 4: State Spending From State Resources Appropriations FY 2019-20 Year-to-Date Versus FY 2020-21 Governor's Recommendation ................................................................... 9 Figure D: State Spending From State Resources FY 2020-21 Governor's Recommendation .............. 10 Table 5: General Fund/General Purpose Appropriations FY 2019-20 Year-to-Date Versus FY 2020-21 Governor's Recommendation ............................................................................. 11 Figure E: General Fund/General Purpose FY 2020-21 Governor's Recommendation.......................... 12 Table 6: Full-Time Equated Classified Positions FY 2019-20 Year-to-Date Versus FY 2020-21 Governor's Recommendation .............................................................................. 13 Figure F: Full-Time Equated Classified Positions FY 2020-21 Governor's Recommendation .............. 14 Table 7: FY 2020-21 Governor's Recommendation One-Time Appropriations .................................... 15 Table 8: State Payments to Local Units of Government FY 2019-20 Year-to-Date Versus FY 2020-21 Governor's Recommendation ............................................................................. 17 Table 9: February 2020 Governor's Recommendation General Fund/General Purpose Revenue, Expenditures, and Year-End Balance .................................................................... 18 Table 10: February 2020 Governor's Recommendation School Aid Fund Revenue, Expenditures, and Year-End Balance ..................................................................................... 19 SUMMARY OF MAJOR FY 2020-21 GROSS AND GF/GP APPROPRIATION CHANGES .................. 20 Table 11: FY 2020-21 Governor's Appropriation Recommendation Summary of Changes from FY 2019-20 Year-to-Date Gross and GF/GP Appropriations ........................................ 20 Table 12: FY 2020-21 Governor's Appropriation Recommendation New Gross and GF/GP Programs ................................................................................................................................. 21 Table 13: FY 2020-21 Governor's Appropriation Recommendation Gross and GF/GP Funding Increases ................................................................................................................... 22 Table 14: FY 2020-21 Governor's Appropriation Recommendation Gross and GF/GP Funding Eliminations ............................................................................................................... 27 Table 15: FY 2020-21 Governor's Appropriation Recommendation Gross and GF/GP Funding Reductions ................................................................................................................ 28 Table 16: FY 2020-21 Governor's Appropriation Recommendation Fund Shifts to Increase/(Reduce) GF/GP ...................................................................................................... 31 Table 17: FY 2020-21 Governor's Appropriation Recommendation Program Transfers ....................... 32 Table 18: FY 2020-21 Governor's Appropriation Recommendation Gross and GF/GP Changes for Unclassified Salaries and Economics Factors ................................................... 33 SUMMARY OF MAJOR SCHOOL AID APPROPRIATION CHANGES .................................................. 33 Table 19: FY 2020-21 Governor's Gross Appropriation Recommendation K-12 School Aid Appropriation Changes ........................................................................................................... 35 SUMMARY OF OTHER MAJOR FY 2020-21 APPROPRIATION ISSUES ............................................. 36 Table 20: Environment & Agricultural Initiatives ..................................................................................... 37 Table 21: Revenue Sharing Appropriation Summary ............................................................................. 40 Table 22: Flint Drinking Water Declaration of Emergency Appropriation Summary............................... 42 Table 23: FY 2020-21 State Budget Recommendation Economic Adjustments Included in Budget ..................................................................................................................................... 43 Table 24: State Retirement Contribution Rates as a Percentage of Payroll .......................................... 45 Table 25: FY 2020-21 MPSERS Employer Contribution Rates .............................................................. 46 Table 26: FY 2020-21 Estimated Contributions to Two Largest Retirement Systems ........................... 47 Table 27: FY 2020-21 Legacy Costs Breakout - Pensions and Health Care ......................................... 48 Table 28: Debt Service Appropriations FY 2020-21 Compared with FY 2019-20 .................................. 49 Table 29: Tobacco Settlement Revenue and Appropriations FY 2019-20 Compared to FY 2020-21 Governor's Recommendation ............................................................................. 50 Table 30: State Spending from State Resources Appropriations Total Compared in Selected Budget Areas ........................................................................................................... 51 ECONOMIC AND REVENUE FORECAST ............................................................................................... 52 Table 31: Consensus Economic Forecast January 10, 2020 ................................................................. 55 Table 32: Governor's Projected Total State Revenue: FY 2018-19 Through FY 2020-21 .................... 56 Table 33: General Fund/General Purpose Revenue Estimates: FY 2019-20 and FY 2020-21 ............ 57 Table 34: School Aid Fund Revenue Estimates: FY 2019-20 and FY 2020-21 .................................... 58 Figure G: Budget Stabilization Fund Year-End Balance with Estimates for FY 2018-19, FY 2019-20, and FY 2020-21 .................................................................................................. 59 DETAILS FOR DEPARTMENTS AND BUDGET AREAS ........................................................................ 60 Table
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