Michigan’s $23B education deal: Free community college for all, pre-K for many

• Michigan education budget will save schools money on retirement costs but will not increase per-pupil funding
• Democrats hailed the plan, but some school groups and all Republicans opposed it
• Plan funds Gov. Gretchen Whitmer’s plan for tuition-free community college but not her universal pre-K proposal

LANSING — Michigan will guarantee free community college, continue free school lunches for all and expand access to free preschool under a budget deal approved early Thursday by the Democratic-led Legislature.

But the $23.4 billion education spending plan stops short of guaranteeing free preschool for all, a top priority for Democratic Gov. Gretchen Whitmer, and some school groups warned the plan could force future teacher layoffs.

The budget deal was delayed for weeks amid debate over Whitmer’s initial proposal to redirect $670 million in retirement health care contributions to other education priorities, including universal free pre-K. 

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Under the final deal unveiled and approved Thursday morning, most of those savings would instead go directly back to traditional public schools. But for the first time in a decade, those schools will not receive any increase in their per-pupil foundation allowance. 

Democrats approved the education budget in party-line votes, 56-54 in the House and 20-18 in the Senate, which voted at around 4:45 a.m. on Thursday to cap a marathon session that had begun Wednesday at 10 a.m.

Senate Majority Leader Winnie Brinks, D-Grand Rapids, said the budget will ultimately put more money back into Michigan classrooms, calling it a “thoughtful and responsive budget to the real needs of our students, parents, teachers and schools.”

But Republicans panned the spending plan as irresponsible, arguing that reducing retiree healthcare contributions was irresponsible given ongoing debt in the larger teacher pension fund. 

“It's just an extremely unwise and reckless move,” said Sen. Thomas Albert, R-Lowell. “It is in no way necessary to maintain the central programs, and it makes no financial sense.”

With state surplus and federal pandemic funds run dry, the overall education budget is 3.5% smaller than the $24.3 billion version Whitmer and the Democratic-led Legislature negotiated last year. 

Here’s a look at the education budget, which is part of a larger $82.5 billion spending plan approved Thursday:

K-12 school funding, retirement savings

Traditional school districts will have the health care portion of their pension contribution rates reduced by about 5.75 percentage points for next school year, saving them a combined $598 million. 

But the plan eliminates $316 million in new spending Whitmer had proposed to increase traditional public school funding by $241 per student. Instead, most schools will receive the same $9,608 allowance as this year.

Public schools will face cuts in some other state programs. 

The state will not add additional funds to the Mi Kids Back on Track program, which districts could use for tutoring and other support to help students recover learning loss. Whitmer had proposed $150 million.

The budget agreement also significantly pairs back how much the state will provide to public and nonpublic schools for mental health and school safety funding. Schools received these funds on a per-pupil basis. 

This past school year, the state spent $328 million on the program. The governor had proposed another $150 million this year, but the final deal includes just $26.5 million.

Expanding Pre-K access

Michigan will expand access to the state’s free preschool program for 4-year-olds under the budget approved Wednesday, but the Great Start Readiness program will not be open to all, as Whitmer had proposed.

Under the final deal, a family will qualify for a free preschool spot if they are at or below 400% of the federal poverty line. Using 2024 federal poverty numbers, a family of four with an income of up to $124,800 could qualify. 

Families that earn more than that could still qualify for free preschool if Great Start Readiness Program providers have additional open spots.

An estimated 5,000 kids would benefit from the expansion, down from the 6,800 who would have benefited from Whitmer's proposal for universal pre-K, according to an analysis by the nonpartisan House Fiscal Agency. 

House Democrats had wanted to remove a requirement that intermediate school districts allocate 30% of preschool slots to private providers, and Senate Democrats proposed wage requirements for preschool teachers. 

Private providers warned those proposals could force closures, but neither provision made the final budget. 

Free community college tuition 

The budget deal includes what Whitmer is calling the Community College Guarantee, which combines state and federal aid to make community college tuition-free. 

The program builds off the existing Michigan Achievement Scholarship, which currently pays up to $2,750 a year for community college, $4,000 a year for independent nonprofit college or $5,500 a year for public university.

The new budget will eliminate income caps that had restricted access to free community college and raise the yearly amount some students can receive. 

Community college students who are eligible for the federal Pell grant will receive an additional $1,000 to pay for school. 

The state would cover up to the cost of in-district community college tuition for a student. 

Brandy Johnson, president of the Michigan Community College Association, said that roughly 80 percent of K-12 students live within a community college district. 

The deal will also raise the maximum yearly award for students who attend independent nonprofit schools from $4,000 a year to $5,500 a year. 

The changes are funded by a $330 million deposit into the state’s postsecondary scholarship fund, an increase of $30 million from the previous budget. 

Free school meals 

Michigan will put another $40 million into a reserve fund that pays for free school meals for all public school students regardless of income. 

School districts across the state offered free breakfast and lunch to students regardless of their income during the 2023-2024 school year. Whitmer and legislative Democrats had each proposed continuing the free program.

Growing educator workforce 

The state will also continue to invest in the Mi Future Educator Program, which provides scholarships to university students studying to become a teacher and stipends for student teachers.  Whitmer had proposed $75 million for the program and the budget deal includes the same allocation.