Sept. 12, 2025 | This Week in Government: What’s the Deal With Going PRO?

More workforce organizations are raising the alarm about the proposed House budgets cuts to training programs.

The $1.2 billion Department of Labor and Economic Opportunity budget passed by the House late last month proposed big changes, including eliminating the Strategic Outreach Attraction and Reserve Fund and the Michigan Strategic Site Readiness program, cutting the Going PRO workforce training program along with other workforce training initiatives (See Gongwer Michigan Report, Aug. 28, 2025).

SEMCA Michigan Works! expressed strong concern in a statement on Thursday about the status of the Going PRO Talent Fund, registered apprenticeship programs, the Jobs for Michigan’s Graduates program, and the Barrier Removal Employment Success program.

“These core programs connect our residents to good-paying jobs while ensuring employers have the talent they need to thrive,” Greg Pitoniak, Chief Executive Officer of SEMCA Michigan Works! said in a statement. “Since its inception, 90% of Going PRO Talent Fund awards have gone to small, local businesses, and workers trained through the program have seen an average 9% wage increase. Eliminating these resources would devastate job seekers, local employers, and Michigan’s economy.”

Workforce organizations are particularly concerned about the Going PRO Talent Fund, which since its launch in 2013 has consistently received bipartisan support and is considered a best-practice workforce development model.

“The Going PRO Talent Fund has been a game-changer for us, enabling the attraction and retention of top Michigan talent. Employees expect opportunities to grow, and this grant allows us to deliver. Without it, we couldn’t compete at the level we do today,” said a statement from Caroline Hinson, Vice President of human resources–Americas, for SAMES.

The registered apprenticeships program is another important tool for workforce development, stakeholders said, citing that Michigan ranks fourth in the country for active registered apprentices and graduates earn a median salary of $80,000 one year after completion.

“By bridging the gap between education and employment, Registered Apprenticeships ensure we grow a workforce that’s both mission-ready and Michigan-grown,” said a statement from Tracey Birkenhauer, Vice President, STACK Cybersecurity.

Pitoniak stressed that these programs are more than budget line items.

“They are lifelines for workers, businesses, and communities across Michigan,” he said. “They would halt Michigan’s momentum in building a competitive, future-ready workforce.”

House Appropriations Labor and Economic Opportunity Subcommittee Chair Rep. Nancy Jenkins-Arno, R-Clayton, did not respond to a request to discuss workforce training programs in the budget on Thursday.

House Republicans previously argued that their budget continues to offer workforce training but ends corporate handouts.

“The House budget invests in solutions that will truly grow Michigan’s workforce and strengthen our economy. We committed $3.4 billion to fixing roads and bridges, an investment that, according to Gov. Whitmer’s own Department of Transportation, will support up to 21,000 additional jobs across our state. These are good-paying jobs that can’t be outsourced or sent overseas,” House Appropriations Chair Rep. Ann Bollin, R-Brighton, said in a statement issued last month. “We also created a new $20 million workforce training fund to expand skilled trades education, certification programs, and upskilling opportunities. These grants will directly support Michigan businesses that are struggling to find qualified workers – connecting people with the skills they need to step into high-demand careers.”

With just under three weeks to go before the clock runs out on the 2024-25 fiscal year, a sense of panic is taking root in the education community at the lack of progress on a state budget – and with it, an unwanted tightening of fiscal belts, school leaders say.

This week, comments from dozens of local superintendents and warnings from Superintendent of Public Instruction Michael Rice have sought to impress upon lawmakers that their actions – or lack thereof – are already having consequences. Rice, speaking before the State Board of Education for the final time on Tuesday ahead of his retirement next month, excoriated lawmakers for the “unacceptable” decision not to hammer out a budget deal by July 1.

“Failure to pass a budget on time has led to districts being more cautious in spending decisions, including staffing decisions,” Rice said. “This summer into the beginning of the school year, some districts have begun to share with parents (that) some programs will not run or may not be funded, including universal meals, after school programs and additional teachers to reduce class sizes in a particular grade. This, too, is unacceptable.”

The Michigan Association of Superintendents and Administrators and Michigan Alliance for Student Opportunity hosted over 25 local superintendents at a Lansing press conference Wednesday to outline the specific measures districts have had to take in response to a past-due state budget and to brace for the possibility of a government shutdown.

A recent survey from the more than 4,400-member Michigan School Business Officials found that 52% of respondents have already made budget cuts in their districts for the upcoming fiscal year, MASO Executive Director Peter Spadafore said. Eleven percent have laid off classroom teachers, 15% have laid off non-instructional staff, and 42% have cut positions through attrition.

“These cuts aren’t just line items on a spreadsheet,” Spadafore said. “They’re broken promises to families and educators.”

Despite claims from officials on both sides of the aisle that a quality K-12 School Aid budget is a top priority, school leaders still feel they’re being strung along by a Legislature more focused on political spats than students and educators. Especially grating to the superintendents were comments made by House Speaker Matt Hall, R-Richland Township, at a recent press conference, in which he implied that school districts were overreacting to the delayed budget and that there’s no need to make cuts since state funds will come eventually.

“The truth of the matter is we have just about 1.4 million kids in public education across the state … there are many missed opportunities. What we would have planned for, but we couldn’t, because there’s not a budget to plan with,” Wyoming Public Schools Superintendent Craig Hoekstra said. “This is time that we cannot get back. Our role across the state, with all educators, is to show up for kids in great ways, make their day and leave everything on the table. A response like that from Mr. Hall is extremely disappointing, and they just need to spend their time working on a budget rather than playing things out in the media.”

The extra wrench thrown into the plan, school leaders said, is students becoming a bargaining chip for road funding in a budget cycle where lawmakers are already miles apart from each other in their partisan camps on how to fund schools.

“The need for a roads plan dates back many years, and three governors in a row have acknowledged the importance of increasing revenue to meet the state’s structural budget needs, including fully funding roads and schools,” Rice said Tuesday. “These recommendations noted that children’s pre-K-12 education is billions of dollars underfunded. Notwithstanding three strong budgets in a row, Michigan schools continue to be underfunded on an inflation adjusted basis by billions of dollars. If it were to fully fund schools and roads, the state would clearly need additional revenue, and while efforts to increase roads funding are not explicitly intended to adversely affect school funding, the practical implication of adding $3 billion more in roads funding to the budget without increasing revenue would be to create significant harm to children and families.”

Scott Koenigsknecht, superintendent of Clinton County RESA, worked through both the 2007 and 2009 government shutdowns. The difference between then and now, he said, is that lawmakers are much farther away from any agreement and show almost no signs of yielding, even on their most extreme priorities. In prior tough budget cycles, schools could count on budget programs staying mostly consistent, even if dollar amounts changed year to year – but this year, the differences between the Senate Democratic budget and its House Republican counterpart consist of millions of dollars and dozens of programs that could be cut.

“Both the governor’s executive budget recommendation and the Senate’s budget make recommendations with which educators could work,” Rice said. “The House’s budget is an outlier budget, one that fails to fund LETRS training, fails to fund a pilot in low class sizes in high poverty grades K-3, fails to fund research-based early literacy material, fails to fund general education transportation reimbursement, fails to fund partnership district support.”

Other superintendents said they’re concerned about the possibility of budget items like funding for career and technical education or early childhood programs being traded away during the negotiation process, either to support a roads plan or other priorities.

A coalition of superintendents from Ingham County sent a letter to families on Wednesday, urging them to contact their elected officials and encourage them to pass an on-time budget that doesn’t pull from the K-12 School Aid Fund. They warned that a government shutdown could affect school services like transportation, preschool, and early childhood care, extracurricular activities and student travel.

“At the heart of the deadlock is a proposal to redirect dollars from the School Aid Fund – the fund voters were promised would be dedicated to K-12 education – to other priorities, including road repairs,” the superintendents wrote in the letter. “Many believe this violates the original intent of the system voters approved in 1994 to provide fair, statewide funding for public schools. If the Legislature does not pass a budget, districts will miss their first scheduled state aid payment on Oct. 20, 2025.”

An additional concern for K-12 advocates is the House proposal to allocate a larger chunk of School Aid Fund dollars to public universities for operational costs – one of the solutions Republicans have put forth to fund a nearly $3 billion roads plan without having to source new streams of revenue and to relieve pressure on the General Fund.

Michigan Association of State Universities Chief Executive Officer Dan Hurley said, though, that increasing the School Aid Fund makeup of the higher education budget is actually the most effective way to “achieve state educational, workforce and economic goals.”

“Allocating a larger share of SAF dollars to support university operations, as the House has proposed, does not take away existing funding from K-12. House Fiscal Agency data illustrates that universities currently receive only 2% of SAF dollars, which in turn represents 20% of the higher education budget,” Hurley said in a statement. “Utilizing a portion of new growth in the SAF will support college affordability in a more consistent and reliable manner, while strengthening the state’s entire pre-K through postsecondary educational system. Doing so will still allow record funding for K-12 education while freeing up more General Fund dollars to fund other state priorities.”

Education Advocates of West Michigan Director Dan Behm said the crux of the budget holdup “hinges on raiding the School Aid Fund” – that lawmakers could have chosen to pass education budgets separately from the rest to meet the July 1 deadline, but there was an impasse between those who wanted to move School Aid Fund dollars to support road funding and balancing the General Fund and those who would not support such a measure.

However, the Legislature is divided, superintendents are starting to brace for the possibility that it may not be able to overcome those rifts by the deadline.

Coby Fletcher, superintendent of Escanaba Area Public Schools, said he’s most worried that if lawmakers are unable to come to an agreement by Sept. 30 and his district has to dip into its savings or take out a loan to continue operating, there won’t be an option to backfill the funding he was planning to have throughout the summer and into the fall.

“What I worry about for my district is if I have to use savings to keep the door open, are we going to be able to recoup all that funding? Are they going to apply that funding retroactively to the start of the school year? Or are they going to say ‘hey, this is a great way to create savings. Maybe we don’t retroactively provide all of that funding,’” he said. “So (lawmakers) may be saying we know the funding will come, we’ll get it. But realistically, do we really know that it’s going to come, and do we really know that we’re really going to get it?”

MASA Executive Director Tina Kerr said her organization and others will continue putting the screws to those in the Capitol each day until the deadline. After their press event, the superintendents made their way downtown, hoping to come face-to-face with the policymakers they feel have been walling them off for the past three months.

“We’re coming for you,” Kerr said.

The chair of the Senate Appropriations Committee on Wednesday said a road funding plan will need to include new revenue and some cuts to other parts of the budget to work, while also expressing frustration with the pace of negotiations ahead of the approaching budget deadline.

Senate Appropriations Committee Chair Sen. Sarah Anthony, D-Lansing, during a Wednesday morning roundtable with reporters, declined to get into specifics on what possible revenue increases might be necessary to make any road funding deal work.

“Many of the concepts that the governor put out early this year we are in agreement with, but not in isolation,” Anthony said. “Whether it is looking at industries that disproportionately impact the quality of roads or other creative ways for us to make sure there’s shared sacrifice, I think ultimately when we get to the point that we’re building a sustainable roads plan, it’s going to take a lot of creativity, both revenue as well as reductions in some of our state services.”

Earlier this year, Gov. Gretchen Whitmer released the outline of a $3 billion proposal calling for a new tax on marijuana, assuring all taxes at the pump go to roads, redirecting $500 million in existing spending and a mix of to be determined tax and fee hikes (See Gongwer Michigan Report, Feb. 10, 2025).

House Speaker Matt Hall, R-Richland Township, prior to that, proposed a $3.1 billion plan that included some similar ideas to the governor’s plan, but also would eliminate multiple tax breaks and relies on the redirection of existing revenue instead of raising new revenue (See Gongwer Michigan Report, Jan. 16, 2025).

Anthony reiterated the Senate Democratic stance that the budget and any road funding plan should be done together.

“We are not in a place that we are ready to put together a glossy piece of paper that is empty when you finally get to the negotiations room,” Anthony said. “We are serious about making sure that our roads and bridges and water are addressed in our state, but not in isolation.”

The senator’s comments came amid speculation this week that the Senate Democrats may be close to unveiling a road funding plan. However, nothing has been announced.

When asked Wednesday about word circulating around the Capitol this week of a possible road funding plan coming from Senate Democrats, a caucus spokesperson said there was “no announcement” and therefore nothing to talk about.

Anthony also said although there are conversations and meetings happening on the budget, they are not progressing quickly enough.

“I’ve been frustrated because we’re not meeting enough to actually get to the heart of these negotiations,” Anthony said, adding that major decisions on federal tax changes or any of the major items on the table have not been decided. “Obviously, phone calls and meetings are being had, but decisions are not being made.”

Anthony said in speaking with past Appropriations chairs, she has been told that the normal process takes four to six weeks to go line through line of budgets and then allow for negotiations. She said the actions of the House ensure an accelerated timeline will be necessary if the Legislature is to meet the budget deadline.

“Matt Hall has put us in a very dangerous position as it relates to this budget process,” Anthony said.

Members of her caucus also took aim at Hall on Wednesday over claims made regarding items in the House budget.

Sen. Mallory McMorrow, D-Royal Oak, called the billions in cuts in the House budget, which they have called an effort to eliminate waste, fraud and abuse, are merely an accounting game.

“What they’ve actually done is take $5 billion in Medicaid matching fund dollars, real money that helps real people get health care, and shuffle it into a contingency fund,” McMorrow said.

She said their budget artificially lowers the overall spending total while cutting Medicaid.

McMorrow also took exception with the House budget’s push for eliminating state employee positions, which Republicans said would save hundreds of millions of dollars by eliminating unfilled positions.

She said full-time equivalent does not mean a full-time employee but is a standard measurement of the hours normally worked by a full-time employee at a place of employment. It consists of a mix of full-time and part-time workers by combining their working hours.

“This reveals either the House Republicans’ stunning ignorance of basic budgeting, or it is a deliberate attempt to mislead the public,” McMorrow said. “This represents yet another coordinated attack on our hard-working state employees by the Speaker all and his caucus. When you underfund staffing while expecting departments to maintain services, you’re not being fiscally responsible. You’re forcing agencies to cut corners, to compromise the services that our citizens depend on.”

Sen. Sylvia Santana, D-Detroit, said Department of Health and Human Services officials testified that they have worked hard to reduce waste, fraud, and abuse in Medicaid and other programs and that it is a relatively small amount within the budget.

Santana pointed to programs she said have helped young mothers and children including the Rx Kids program for expecting and new mothers as well as line items for helping people gain access to autism services. Santana said these are not wasteful and such spending helps improve the chances of success for children and families.

Sen. John Cherry, D-Flint, said the Senate budget includes funding for drinking water infrastructure and monitoring as well as water affordability programs, while the House made cuts in those areas.

As to food and agriculture, he said the House budget includes significant cuts to food safety and emergent diseases. For Northern Michigan, he said the House makes cuts to wildfire protection despite forecasts of heightened wildfire risk in the coming years.

“If you care about keeping our water clean, making sure we have safe food, if you care about public safety, the House budget attacks all while the Senate lifts the state up,” Cherry said.

Lawmakers discussed how to prevent artificial intelligence from taking over the world during a House committee Wednesday.

The House Judiciary Committee discussed HB 4667  and HB 4668. The first bill would add a new section to the Michigan Penal Code to create three felonies related to AI systems. The second bill would create the Artificial Intelligence Safety and Security Transparency Act, which would require large developers of AI to create and implement risk management practices. HB 4668  also outlines further government regulations and provides whistleblower protections.

Randy Gross, senior director of legislative affairs for the Michigan Chamber of Commerce, testified against the legislation.

“We appreciate the need and the interest in the regulation of AI, and we understand that there likely needs to be some boundaries put on this,” Gross said. “Our biggest concern with the legislation, quite frankly, is we think this should be done at the federal level.”

Gross said regulating AI at the state level would create a patchwork of rules, which would lead to inconsistencies.

“Let’s create that regulatory structure and push on our congressional delegation to move that aspect and then identify what pieces, if they’re needed, to fill in at the state level,” he said.

Felix De Simone, director of policy for PauseAI US, an advocacy group focused on regulating AI, testified in support of the bills, calling them a commonsense approach to addressing concerns around AI.

“Every technological innovation has the potential for both good and harm, and it’s the responsibility of lawmakers to keep citizens safe from these harms while ensuring that innovation occurs in the public interest,” he said. “As the most advanced AI systems grow more powerful, they will have increasingly dangerous capabilities… experts are warning us that this is a recipe for disaster, and instead of rolling the dice and gambling with an uncertain future, we should act now to make sure that these worst-case scenarios of autonomous, weapons-capable AI systems don’t come to pass.”

Rob Eleveld, CEO of Transparency Coalition, a nonprofit focused on AI guardrails, also testified in support of the bills.

“Michigan citizens are seeking just how powerful AI systems can be, but also how pernicious they can be in grooming and convincing folks,” he said, mentioning recent news stories about AI chatbots helping people commit suicide.

“Most states…have stiffer penalties when a firearm is used to commit a crime… this would be very similar,” he said of HB 4667.

Eleveld also talked about the importance of whistleblowers’ protections for knowing what’s going on with AI.

“Waiting for the federal government to do something is just not going to happen,” he said. “I would urge you in your vote to consider protecting the state, the citizens who are in your districts in the state of Michigan…if Michigan passed HB 4668 , it puts more pressure, along with Colorado, along with New York, along with California, along with other state…for the federal government to act.”

Tyler Diers of TechNet also testified against the legislation, saying he thought regulation should happen at the federal level.

“If each US state were to set its own rules for frontier models, companies would face 50 different compliance regimes,” he said. “This would drive up cost, create legal uncertainty and slow down responsible innovation.”

Diers said, if anything, Michigan should wait to see how the legislation in New York and California play out, or create a task force to do more research.

The language of the bill also would create challenges for open-source developers and the third-party audits laid out in the bill would also pose challenges to development, Diers said.

“We believe that certain provisions within the bill could significantly impede innovation and impose substantial burdens across critical sectors,” he said.

Diers also raised concerns with HB 4667, saying the language was vague and raised technical questions.

“While this bill aims to address legitimate concerns about criminal misuse of AI, I think some of its broad and big provisions just risk criminalizing innocent developers and stifling that AI ecosystem,” he said.

Changes could be made to improve the bill, Diers said.

Rep. Kelly Breen, D-Novi, said she would like to see more work done on delineating the criminal penalties and distinguishing misdemeanors from felonies.

Rep. Tyrone Carter, D-Detroit, agreed that there was a lot of work to be done on the topic.

“I agree there needs to be one basic standard that we can live on country-wide, because there’s no best practice at this point,” he said.

Committee Chair Rep. Sarah Lightner, R-Springport, stressed she wanted to work in a methodical and strategic way on the legislation because it was new.

“This is something we want to be strategic about, that we want to take our time on, hope that the federal government actually does something in regard to this,” she said. “Because I don’t disagree that a lot of this could be handled that way.”

The committee then voted unanimously to refer HB 4668 to the House Communications and Technology Committee.

 

The state’s General Fund revenue was estimated to be about $1.2 billion in August, about $8.8 million above the May Consensus Revenue Estimating Conference estimates, the House Fiscal Agency said in its monthly revenue report.

This was primarily due to above forecast Individual Income Tax quarterly and withholding payments, higher use tax collections, and above forecast Michigan Business Tax revenues, which offset higher Individual Income Tax refunds and below forecast Corporate Income Tax revenues.

On a year-to-date basis, though, the General Fund tax revenue for fiscal year 2024-25 is approximately $82 million below the projected amount.

The School Aid Fund revenue was estimated to be $1.5 billion in August 2025, about $119 million above the amount estimated at the May CREC. Collections from the state education tax, real estate transfer tax, sales tax, lottery, and online gaming were above forecast.

The School Aid Fund revenue for this fiscal year is approximately $143 million above CREC projections on a year-to-date basis.

Collections from the state’s major taxes, penalties and interest, and lottery transfers were 5.7% higher in August this year than they were last year.

The state brought in $2.9 billion in August 2025, $187.9 million more than August 2024. For the fiscal year to date, collections were $1.4 billion higher than fiscal year 2023-2024.

Net income tax revenue totaled $1.03 billion in August 2025, and collection through August of the current fiscal year were $1.3 billion more than during the same period last year. Year-to-date gross income tax collections this fiscal year were $1.11 billion higher than one year ago, primarily because of higher individual income tax withholdings.

Net business taxes were lower on a fiscal year-to-date basis by about $185 million. Michigan Business Tax refunds through August 2025 were $80.2 million more negative than last year, while Corporate Income Tax collection over the same period were $97.1 million lower than last year’s amount. Year-to-date insurance taxes were also lower by $9 million.

Consumption taxes totaled $1.26 billion in August and were collectively $68 million higher than last fiscal year on a year-to-date basis. Sales tax collections were $144 million above last year’s amount and use tax collection were $29.9 million lower.

Online gaming revenue totaled $46.1 million and collections through August were $109.4 million higher than the same period last fiscal year. Recreational marijuana revenue was $2.8 million higher. The transfer from the lottery to the School Aid Fund was $126.4 million in August 2025. Year-to-date transfers were $60.1 million lower than last fiscal year.