Appropriations subcommittee reviews LARA FY2025 budget; MIDC grants drive recent growth

The House Appropriations Subcommittee on Licensing and Regulatory Affairs and Insurance and Financial Services heard a presentation on the Department of Licensing and Regulatory Affairs' (LARA) fiscal 2025 budget on the committee record.

House fiscal analyst Unia Kupovich summarized funding sources and program areas, saying the department's budget is roughly 48% general fund and 43% state-restricted funds and accounts for about 1% of total state spending. "My name is Unia Kupovich. I'm the House fiscal analyst responsible for the licensing and regulatory affairs and insurance and financial services budgets for LARA and DIFS. As Chair Beeson mentioned, today I'll be presenting the current fiscal year 2025 budgets for both departments," Kupovich said.

Kupovich told members that gross appropriations for LARA increased about 34% from 2021 to 2025, driven primarily by larger appropriations for grants distributed by the Michigan Indigent Defense Commission (MIDC). She said roughly $258.3 million is appropriated for MIDC grants in the current fiscal year and that those grants are "almost exclusively a general fund" obligation for the department.

The presentation broke the department into appropriation units and functions. Kupovich said about 44% of the LARA budget supports grants and roughly 25% supports occupational regulation. She reported 1,821 full-time equivalents authorized for LARA in 2025, with about half of those positions in six occupational-regulation bureaus, and noted a recent decline in FTEs tied to moving childcare licensing out of LARA into MiLEAP.

Kupovich highlighted a set of LARA responsibilities and line items members asked about: the Michigan Public Service Commission (MPSC) appropriation (roughly $41.3 million, including federal gas pipeline safety funds and utility-assessment revenue), the Liquor Control Commission (MLCC) appropriation (about $22.8 million, largely from the Liquor Purchase Revolving Fund and licensing fees), and the Cannabis Regulatory Agency (CRA) appropriations (broken into the Industrial Hemp Licensing Regulation Fund, Marijuana Registry Fund, Marijuana Regulation Fund and Marijuana Regulatory Fund for medical licensing fees).

The analyst also listed smaller but recurring grants: firefighter training ($2.3 million), liquor law enforcement reimbursements ($9.9 million), marijuana-operation oversight grants ($3.0 million), remonumentation grants ($6.8 million), a $1.0 million general-fund urban search-and-rescue appropriation, and $2.1 million for utility consumer representation grants administered by the Utility Consumer Participation Board.

Members asked for further detail on several points. Representative Donovan McKinney asked what state oversight exists for nursing homes; Kupovich identified the Bureau of Community and Health Systems as the relevant unit within LARA but said she would follow up for detailed operational answers. Representative Donnie Steele asked whether grants such as firefighter training and liquor-law enforcement are statutorily required; Kupovich said those specific grants are statutorily required and funded at some level, while others in the department are discretionary or vary year to year.

Kupovich closed by noting several one-time appropriations in the budget year, including a five-year energy waste reduction study the Public Service Commission must complete, smoke-detector distributions, renewable-energy project grants and juvenile indigent defense grants. She said departmental heads will present in coming weeks to allow more detailed questioning.

The subcommittee did not take formal action during the presentation; members asked follow-up questions and requested departmental briefings in later hearings.