$90 millon in personal tax cuts and $106 million to prefund the school employees retirement system are just two areas set to receive increased funding under a spending agreement signed by the governor and legislative leaders.
According to Budget Director John Nixon, the state can afford it. That's partly because the state is expected to move into the next fiscal year with an extra $300 million.
"We increased the funding primarily in the sales tax and other taxes. Economy activity is picking up. People are spending more, people are making more money," Nixon said.
He says that's further proof the economy is on the right track. Rep. Joan Bauer, D-Lansing, credits the auto industry for Michigan's economic come back.
"Our economists have confirmed that our automotive industry is still here and it's strong and flourishing," said Rep. Bauer.
The state is also spending less in other areas, which is the other part to covering additional costs planned in next year's budget.
"Last year we budgeted a certain level of caseloads in our medicaid caseloads, human services caseloads and those caseloads are stabling and even decreasing in many areas," said Nixon.
Meanwhile, Rep. Bauer argues the state may have more money, but she says the way Republicans want to spend it is not the way to go.
Rep. Bauer wants to see more funding restored to K-12 schools and higher education.