Happy New (Fiscal) Year; State Spending Up But Not By Much

Spurred by the Obamacare Medicaid expansion and increases in the state gas tax and vehicle registration tax, overall spending by Michigan’s state government increased by $7.8 billion under Gov. Rick Snyder’s eight-year tenure. The figure is based on spending supported by both state tax revenue and federal pass-through dollars.

Former Gov. Jennifer Granholm’s final budget (2010-11) totaled $48.1 billion, which would be equivalent to $54.1 billion if stated in current 2018 dollars. Snyder’s last budget is for the 2018-19 fiscal year, and it totals $55.9 billion. The state’s new fiscal year began Monday.

One department that has experienced the largest spending increase in the Snyder years is the Department of Transportation. Another is the Department of Health and Human Services, which resulted from the 2015 merger between the Department of Community Health and the Department of Human Services.

The Department of Health and Human Services, which manages the state’s welfare and public health programs, saw its spending increase from $21.3 billion in 2010-11 (equivalent to $23.8 billion today) to $24.9 billion authorized for the fiscal year that begins this week. That increase was mostly due to the Legislature and governor accepting the Affordable Care Act Medicaid expansion in 2013.

The Michigan Department of Transportation’s spending increased from $3.6 billion ($4.0 billion in 2018 dollars) in 2010-11 to $4.8 billion in 2018-19. The MDOT increases are largely due to the gas tax and vehicle registration tax hikes enacted in 2015 to provide more money for road repairs.