Legislative Report as of April 2019

The Legislature will return next week from their Spring Recess, and the outlook for next year’s budget discussions is as cloudy as ever.  Governor Whitmer’s budget proposal hinges on a $.45 per gallon gas tax increase.  While there was little immediate reaction from the Republican-controlled Legislature, their messaging has been slowly coalescing into what could be a complete rejection of that proposal.  Without those funds, the Governor’s proposal falls apart.  Lansing is eagerly awaiting to see what the Legislature’s alternative might be. 
 
 
2020 Budget Difficult to Predict
 
We have gotten accustomed over the past 8 years for a relatively predictable budget process.  The governor would make a recommendation in February, and the House and Senate would make minor tweaks over the following three months.  By May, most of the decisions were made, with only a few major policy differences to be worked out.  In June, the Legislature would pass a budget that was 95% want the governor had proposed, and then go home for the summer.
 
That’s not going to happen this year.  Governor Whitmer’s proposed 2020 budget is an aggressive one, aiming to make fixes to infrastructure and education systems that have been highly neglected over the past few decades.  Aggressive is rarely popular with voters, however, and Republican leaders in the House and Senate – after taking a few weeks to gauge the public reaction – are starting to come out swinging against the key feature of the Whitmer proposal.  Senate Majority Leader Mike Shirkey (R-Clark Lake) just this week sent out a fundraising memo stating that – in reference to the gas tax increase – the governor had “gone rogue” and lied to the public when she was running for governor.  Any hope for some kind of compromise evaporates quickly in light of that kind of rhetoric.
 
The biggest question in Lansing right now is how exactly the Legislature will respond to Governor Whitmer’s proposal.  The legislative appropriations process has been moving along as normal, with subcommittees in the House and Senate holding hearings, taking testimony and preparing their own budget priorities.  However, none of the subcommittees have yet to offer any kind of a counter-proposal.  According to several Republican members of the House and Senate Appropriations Committees, they are still waiting on their leadership to provide them with spending targets for each subcommittee. 
 
That will change soon after the Legislature returns from Spring Recess.  It is probable that many of the subcommittees will begin to report their recommendations by the end of April, with the exception of some of the more complex budgets such as the Department of Health and Human Services.  The likelihood that the House and Senate will include in the budget any kind of tax increase is very low.  Therefore, what we will see could very well be more of a continuation budget that keeps spending levels fairly close across the board to what they were in 2019.  The House and Senate will likely try to cobble together some additional General Fund dollars to put toward road and bridge construction.  They may also be able to slightly bump up K-12 school funding should Sales Tax revenue grow.  It would be truly shocking, however, if the Legislature responds with anything close to what Governor Whitmer has requested.
 
And that, as they say, is where the rubber will hit the road.  Governor Whitmer has made it consistently clear that she will only sign a budget that includes an additional $2.5 billion for transportation.  That will set up a standoff between the Legislative and Executive branches the likes of which we have not seen since the last time there was split power in Michigan government.  Moreover, the gas tax increase proposed by Governor Whitmer also makes it possible provide extra General Fund dollars for education, water quality and other of her campaign priorities.  The interconnectivity of several different funding goals will make negotiations with the Legislature even more difficult.  The next Fiscal Year begins on October 1, 2019, and the budget must be completed by then to avoid a state government shutdown.  We could very well see some late nights at the Capitol this September.
 
 
DEQ to Become DEGLE in Mid-April
 
Earlier this year, Governor Whitmer signed an executive order that would reorganize the Department of Environmental Quality into the Department of Environment, Great Lakes and Energy.  Liesl Clark, who was named director of DEQ will assume leadership of the newly named department.  The governor’s first effort to reshape DEQ was rejected by the Legislature over her decision to eliminate three recently created boards – the Environmental Rules Review Committee, the Environmental Permit Review Commission, and the Environmental Science Advisory Board.  After her first effort was rejected, Governor Whitmer made a second attempt that was identical to the first except that it left the Environmental Rules Review Committee and the Environmental Permit Review Commission in place.  The Legislature agreed to the change and the restructuring will be completed on April 22. 
 
This was the first major departmental restructuring under Governor Whitmer, though it will certainly not be the last.  After she was elected, there was great speculation on whether or not she would divide the Department of Health and Human Services into two separate departments as had been the case prior to Governor Snyder’s order to combine the former Department of Community Health and former Department of Human Services.  At this time, Governor Whitmer seems content to leave DHHS as it is.
 
 
Governor Whitmer Puts Caro Psychiatric Hospital Redevelopment on Hold
 
In mid-March, Governor Whitmer placed on hold plans to construct a new psychiatric hospital in Caro to replace the aging facility there.  In December, $115 million was slated for the project as part of the supplemental budget bill signed by Governor Snyder.  Governor Whitmer, along with DHHS Director Robert Gordon, stated that a more thorough review of possible locations for a new psychiatric hospital should be performed before a final siting decision is made. 
 
One of the concerns cited by the administration are chronic staffing problems at the current Caro facility.  It has been difficult for MDHHS to fill some positions, with the geographic location often blamed for the problem.  MDHHS Director Gordon will oversee the review process and will take factors such as staffing, infrastructure, and patient access into account. 
 
Local and state officials representing the Caro area expressed anger over the stoppage.  Caro is hugely important to the economic health of the region, and its loss would have a highly negative impact on the city and county.  Much in the way that a prison facility closure can devastate the local community, moving Caro could do the same for the region.  The department plans to hold community meetings in Caro to discuss the future of the facility and get input from the community.
 
 
State Employer Seeking Input on Work Rules
 
Liza Estlund-Olson, the director of the Office of State Employer, plans to convene meetings with employee representatives to have a discussion on work rules.  Governor Whitmer’s office has received numerous complaints from state employee collective bargaining groups since she took office focused on unnecessary, burdensome and at times potentially dangerous work rules that have been mandated by the state.  One example given by the Governor’s office was a State Police Lab rule that required a technician that had accidentally been exposed to fentanyl while performing tests was required to wait a period of minutes before using Naloxone.  That rule has been deleted, and the Office of State Employer is looking for more feedback from state employees on similar problematic work rules.  MAGE is on the list of organizations that will be invited to participate.