LANSING, Mich. (AP) — Awash in surplus revenue and federal pandemic aid, Gov. Gretchen Whitmer on Wednesday proposed a $74.1 billion state budget that would significantly boost education spending, pay bonuses to frontline workers and cut taxes for retirees and low-income families.

The election year plan, if approved by the Republican-controlled Legislature, includes a 5% increase in base aid for K-12 schools, universities and community colleges, and a 10% increase in revenue-sharing payments to municipalities.

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The Democratic governor proposed “hero pay” for essential workers along with retention bonuses for school employees and first responders. She also formally unveiled previously announced tax relief plans, including rolling back the taxation of retirement income over four years and an increase in the state’s earned income tax credit.

“The budget I put forward today delivers on those tax cuts and makes strong investments in the kitchen-table issues that make a real difference in people’s lives,” Whitmer said in a statement.

In addition to calling for sizable funding hikes, she proposed new initiatives. They include creating a $1 billion school infrastructure modernization fund — $170 million in grants would be dispersed in the next fiscal year — and spending $200 million to help universities and community colleges make infrastructure upgrades.

The governor also requested $500 million to replenish a new fund that was used to award incentives for General Motors to convert a factory to make electric pickup tracks and to build a new battery cell plant in Michigan.

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In building the proposal, her administration cited a $7 billion balance that was carried forward into the current fiscal year. The money would be directed toward “one-time” expenditures this budget year, next fiscal year or in future years.

Whitmer, for example, asked for $1.5 billion to give a $2,000 bonus to all preK-12 educators and non-instructional staff in 2022 and 2023. Teachers and certified staff such as counselors, social workers and nurses would get $3,000 in 2024 and $4,000 in 2025 amid educator shortages.

She sought $600 million to award competitive college scholarships to would-be teachers, stipends to student teachers and grants to districts and regional partners with plans to recruit, train and retain teachers from their own communities.

Republican lawmakers and the governor will iron out the budget in coming months. Republicans already have said they favor broader tax relief than Whitmer’s targeted cuts, such as a reduction in the income tax.

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