Michigan lawmakers face a critical decision: continue a pattern of overspending or embrace fiscal restraint to secure a stronger, more prosperous future. With a history of unsustainable spending and missed opportunities, legislators should choose a responsible approach to budgeting that protects taxpayers and ensures economic stability.

Michigan’s Democratic majority inherited a $9 billion surplus in 2023 — a golden opportunity to strengthen public finances, pay down debts or return money to taxpayers. Instead, they squandered it. Legislators directed $4.7 billion to business subsidies and another $3 billion to district pork projects. These initiatives might benefit politically connected firms or legislators’ ambitions, but history shows they yield little value for Michigan residents. The state’s major business subsidy deals from 2000 to 2020 delivered only 9% of the promised jobs, even as Michigan’s economic growth lagged behind the rest of the country.

The failure doesn’t stop there. Lawmakers compounded their fiscal mismanagement by diverting $670 million from pension debt payments to fund other priorities. This reckless decision treated pensioners — people who earned secure retirement benefits — as creditors, deepening Michigan’s unfunded liabilities. These obligations already rank among the state’s largest financial challenges, and further neglect undermines long-term stability.

This profligate spending reveals why the state desperately needs a Sustainable Michigan Budget. Lawmakers must adopt a framework that limits annual spending growth to a maximum rate of population growth plus inflation—a proven model for fiscal responsibility embraced by states like Colorado, North Carolina, and others. For the upcoming budget, this means capping spending growth at 3.6%, ensuring expenditures align with the average taxpayer’s ability to pay while creating room for debt reduction and tax relief.

Contrary to common misconceptions, fiscal restraint empowers governments to do more. The state can plan strategically now and for the future. When lawmakers curb spending during revenue booms, they prepare for future downturns, allowing stable budgets even in lean times. Restraint also makes it possible to pay down debt, reducing liabilities like pension obligations that otherwise drain resources from essential services. Finally, fiscal discipline creates room for meaningful tax relief, boosting economic growth by allowing individuals and businesses to invest more in productive activities.

Michigan has an opportunity to learn from states that have embraced sustainable budgeting. In North Carolina, for example, spending growth has been tied to population growth plus inflation for years, fostering fiscal stability while enabling significant tax relief. Michigan can follow this path, using discipline today to build a stronger, more resilient economy tomorrow.

With Republicans now controlling the Michigan House of Representatives, hope exists for a shift toward sustainable fiscal practices. The state’s post-pandemic revenue surge and federal cash infusions have already been spent. However, revenues are projected to grow this year, providing lawmakers with the chance to correct the state’s course and avoid repeating past mistakes.

Will Michigan’s leaders seize this moment or squander it again? By continuing to overspend, they risk burdening taxpayers with unsustainable debts and jeopardizing the state’s economic future. But if they embrace sustainable budgeting, they can ensure that Michigan residents keep more of their hard-earned money and secure long-term prosperity for everyone.

Michigan deserves better than the reckless spending and short-term thinking that have defined its recent history. Lawmakers must chart a new course that prioritizes fiscal responsibility, respects taxpayers, and fosters economic freedom. The time for change is now.

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