LANSING, Mich. (AP) — Gov. Gretchen Whitmer on Thursday proposed using a budget surplus to finally eliminate a funding gap among K-12 districts, 27 years after Michigan overhauled the financing of public education.

Under the Democratic governor’s revised proposal, all districts and charter schools would receive $8,692 in base per-student aid from the state. That is $581, or 7%, more for most. Districts at the top end would get an additional $163, or a nearly 2% increase.

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An existing $418 gap between lower- and higher-funded schools would be fully closed.

The $664 million in proposed spending was outlined as part of a $2.6 billion plan to spend surplus state revenues and a portion of federal COVID-19 relief funding.

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“With the resources we have available to us thanks to federal aid and a state surplus, we can making lasting, transformative investments in our kids and schools that will have positive impacts for generations,” Whitmer said in a statement. She announced the framework as a school in Bay City.

Whitmer proposed giving schools $500 million to hire and retain more teachers, psychologists, social workers, counselors and nurses, and to relieve student loans for mental health workers and nurses in high-need districts. Another $500 million would be used to upgrade school infrastructure.

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