When the FY2021 Executive Budget was released last February, few realized that the world was about to change dramatically due to the COVID-19 pandemic. Within a month, budget deliberations were dominated by financing the state’s pandemic response efforts and addressing anticipated revenue declines that could result from a slowed economy. However, relaxed restrictions over time and significant federal support tied to the pandemic helped the state avoid large-scale budget reductions.

Now, Governor Whitmer has released her FY2022 budget proposal. With state revenues coming in stronger than initially expected, the administration had significant General Fund resources available that are tapped to support a number of major investments in areas including education, infrastructure, the environment, and public health. And more support from Washington may be on its way. Longer term, however, structural budget challenges remain.