$165M Lifted From Restricted Funds To Prop Up Budget
October 13, 2020
To shore up the Fiscal Year (FY) 2021 budget, Gov. Gretchen Whitmer and lawmakers agreed to shift $165.6 million from 13 restricted funds for other purposes to help plug the General Fund (GF) hole.
The largest chunk of transferred funds was $54 million lifted out of the 21st Century Jobs Fund, which is used by the Michigan Economic Development Corp. (MEDC) for such economic development programs as Pure Michigan or business grant programs, according to this white paper from the MEDC website. The fund can receive money from any source, but it’s mostly comprised of GF and tobacco settlement revenues.
According to a State Budget Office (SBO) breakdown of the $165 million in fund transfers, $37.1 million was lifted out of the Film Promotion Fund, as the program ended.
The Marihuana Regulatory Fund saw $17 million taken out to go to the GF. Revenue from this fund comes from application fees and annual regulatory assessments that medical marijuana licensees pay, according to this document from the Senate Fiscal Agency.
Other larger chunks of money taken include $13 million from the Economic Development Fund, $10 million taken from the Health Professionals Regulatory Fund, and $3.4 million taken from the Sex Offenders Registration Fund, which is used to maintain that law enforcement database.
The Juror Compensation Reimbursement Fund, which assists trial courts with compensation for jurors, gave $2.5 million. Another $4 million from the Scrap Tire Regulatory Fund was tapped, which derives its funds from a $1.50 fee per vehicle title transfer, said Nick Assendelft, spokesperson for Michigan Department of Environment, Great Lakes, and Energy.
Another environmental-related fund, the Solid Waste Management Fund, contributed to the cause to the tune of $2 million. Assendelft said the fund gets money from a 12-cent per cubic yard surcharge on waste disposed of in landfills.
State Budget Office spokesperson Kurt Weiss said the particular funds were chosen because either the balances were not being used, or they were funding “lower-priority programs” and the money was “needed to protect other core services in the budget such as health and safety.”
Weiss said this isn’t the first time restricted funds have been lifted to help cover the GF and get the budget in balance, but because they are restricted dollars, it takes legislative action to allow it. Whitmer signed a few of these bills that allowed for the transfers last week.
Not every bill, however, had been signed as of Tuesday. HB 6119, which, among other things, provides for a $10 million transfer from the Convention Facility Development Fund, is still sitting on Whitmer’s desk. The fund is normally used to pay debt service on bonds tied to the TCF Center in Detroit, as well as to distribute liquor taxes to counties.
The $165 million should be considered one-time funding, meaning it will be a hole that needs to be filled for the FY 2022 budget.
Here’s the breakdown on the fund transfers to the GF as provided by the SBO, and how the SBO described how those funds are typically used:
Michigan Craft Beverage Council Fund – $476,500
Used to support the Michigan Craft Beverage Council.
Scrap Tire Regulatory Fund – $4 million
Cleanup or collection of abandoned scrap tires on public or private land; grants to end-users of scrap tires.
Solid Waste Management Fund, Staff Account – $2 million
Solid waste management program.
Certificate of Need – $3 million
Certificate of Need Program Administration.
Juror Compensation Reimbursement Fund – $2.5 million
Assists trial courts with compensation costs for jurors.
Film Promotion Fund – $37.1 million
21st Century Jobs Fund – $54 million
Economic development programs.
Health Professionals Regulatory Fund – $10 million
Administration of public health code.
Marihuana Regulatory Fund – $17 million
Administration and enforcement of the Medical Marihuana Facilities Licensing Act.
Sex Offenders Registration Fund – $3.4 million
Maintenance and automation of the law enforcement database.
Economic Development Fund – $13 million
Economic development projects.
Convention Facility Development Fund – $10 million
Debt service payments on Cobo Hall bonds and distribution of liquor tax to counties.
Land Reutilization Fund – $9.1 million
Costs of administering foreclosure and disposition of property forfeited for delinquent taxes.