LANSING, Mich. (AP) — Flush with surplus state revenues, Democratic Gov. Gretchen Whitmer on Wednesday called for a series of targeted tax cuts while outlining her legislative agenda and touting bipartisan accomplishments before she is up for reelection.

Delivering her second straight State of the State speech virtually due to the COVID-19 pandemic, she called for exempting retirement income from taxation — saving 500,000 households an average of $500 a year — and fully restoring a credit for 730,000 low- and moderate-wage families who on average would get an extra $350 annually.

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She proposed a $2,500 state credit for the purchase of an electric vehicle and charging equipment on the heels of General Motors’ announced $7 billion investment in Michigan to convert a factory to make electric pickup trucks and to build a new battery cell plant.

Other new initiatives include adding hundreds of mental health providers and lowering the cost of insulin.

“I believe that whenever possible, we should make taxes more fair for our seniors and working families. Michiganders should be able to keep more of what they’ve earned,” Whitmer said from auto supplier Detroit Diesel’s plant in Redford Township, flanked by all-electric vehicles, saying places like it are where Michigan’s future will be forged.

It was believed to the first time a governor gave annual remarks outside Lansing since it became the state capital 175 years ago. Governors began delivering address in person at some point in the 20th century, state archivist Mark Harvey said.

Whitmer had planned to again address lawmakers in a joint legislative session in the Capitol, as is tradition, until the omicron variant fueled record-high reported infections and hospitalizations.

“While 2021 wasn’t as miraculous as any of us wanted, we have made progress,” she said of the pandemic during the 25-minute speech. “We’re stronger in large part thanks to science and life-saving vaccines. We have come a long way, and I am encouraged about the path ahead.”

The optimistic governor said despite the coronavirus, she and the Republican-led Legislature have made strides funding education, adding auto jobs, fixing roads and lowering car insurance premiums.

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One goal, she said, is increasing the number of mental health workers. She proposed expanding a program through which the state repays up to $200,000 in student loans for those who work in nonprofit clinics in areas where there is a shortage of health care professionals. And she said she will propose another “bold investment” in her budget to boost funding of mental health employees in schools, as part of a plan that would mark the biggest education funding hike in more than 20 years.

Republican legislators also support a tax cut, though they may push for one that is broader. A Senate committee earlier Wednesday passed a bill that would cut state income and corporate taxes and reinstate a child tax credit. Senate Majority Leader Mike Shirkey said it will sit in the Senate while analysis and talks continue.

“I think all the options that we can possibly have on the table to returning money to citizens is a very good thing, and I can’t wait to roll our sleeves up and get involved with it,” he told reporters.

Whitmer, whose management of the pandemic faced fierce GOP resistance for over a year until her administration lifted capacity restrictions and mask mandates when vaccines became widely available, remembered the 30,000-plus residents who died from COVID-19. But she otherwise focused on pocketbook and other topics and steered clear of contentious issues except to briefly say she would veto any attempt to restrict the right to abortion.

She asked, for instance, that legislators give final approval to House-passed legislation that would cap out-of-pocket insulin costs at $50 a month.

The first-term governor will face voters in more than nine months, and it is unclear the extent to which she and Republicans can find common ground in an election year. But a $5.8 billion surplus, and an unprecedented amount of federal discretionary pandemic aid, provide opportunities for major infrastructure and other spending.

Whitmer’s bipartisan messaging did not stop the state GOP from questioning claims of progress and blaming her for unemployment and some school districts’ transition to virtual instruction amid the latest coronavirus surge. She said remote learning is not as fulfilling or conducive to a child’s growth, pledging to do “everything we can” to keep kids in school.

“I want to be crystal clear: Students belong in the classroom,” she said.

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