Legislative Update: Following the State Budget Process

Michigan’s fiscal year (FY) starts on October 1 and ends on September 30 of the following year. School district fiscal years start on July 1 and end on June 30. The budgeting process for each fiscal year is continuous. While planning the upcoming fiscal year budget, the Governor and Legislature also monitor and adjust the current budget.

• Creates a plan for how the state will spend money.
• Identifies where the funding will come from.
• Allocates funds according to executive and legislative priorities. 
• Distributes state funds to local governments and other service providers. 
• Tracks spending and holds agencies and departments accountable.

• General Fund: The state’s primary operating fund
• School Aid Fund (SAF): A restricted fund that serves as the primary state funding source for K-12 schools and Intermediate School Districts. In recent years, SAF revenue has also gone towards community college and university budgets.
• Budget Stabilization Fund: The state’s “rainy day fund”

Michigan’s Constitution gives the Legislature control over state spending. No money can be spent without the Legislature’s approval, making it equal to the governor and the courts. This power also helps ensure that state agencies and departments follow the law.

As always, MARSP monitors the state budget process and will keep members informed of activities that intersect with our legislative priorities: 

• Solvency of MPSERS pension and healthcare funds
• Workforce stability
• Return to work without penalty
• Finalize the state budget by June 30th of each year

Your engagement with legislators reinforces and legitimizes MARSP’s efforts to protect and enhance your retirement system during the budget process. Phone calls, emails, handwritten letters, and in-person meetings are all great ways to build relationships with legislators. The BEST option is the one that works for YOU.

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