Legislative Report as of October 16, 2019

Budget Vetoes Roil Lansing
 
The Legislature and Governor Whitmer managed to complete the 2020 budget process and avoid a government shutdown.  That is about the most positive thing that can be said about this year’s appropriations process.  At the end of September, the people of Michigan witnessed a budget battle that went down to the very last minute, produced a record number of line-item vetoes, saw the unprecedented use of executive power to shift funds from one line to another, and that left over $500 million in General Fund dollars on the table.  It also concluded with no deal on long-term road and infrastructure funding. 
 
No one in Lansing is happy about how this process concluded.  Republican lawmakers waited until nearly the last possible moment to present the governor with their budget – a strategic choice designed at forcing Governor Whitmer to choose between signing a budget she opposed or shutting down state government.  Governor Whitmer then dug deep into the gubernatorial playbook and line-item vetoed 147 different items totaling nearly $1 billion when federal and restricted funds are included.  Moreover, Governor Whitmer made use of a tactic made legal (though never actually used) by former Governor John Engler as she instructed the State Administrative Board to reallocate approximately $600 million within departments.  This latter move has been particularly attacked by Legislative leaders.
 
The Governor’s line-item vetoes hit nearly every department.  They included nearly all of the additional $400 million in General Fund dollars the Legislature dedicated to road funding.  They also cut funding for programs ranging from autism services and dementia care to sheriff road patrol and charter schools.  One of the vetoes cut funding for the Pure Michigan tourism program, a move that surprised many.  An even more controversial line-item veto was Section 298 in the DHHS budget – the section that has been attacked repeatedly over the years by mental health advocates for its movement toward privatization within the mental health system. 
 
Most policy makers in Lansing were expecting the Governor to make use of the line-item veto, but perhaps not to this extent.  Staff in the House and Senate had been preparing draft supplemental bills that would restore some of the line-item vetoes with the understanding that negotiations on the budget and road funding would continue through the fall.  However, that sentiment changed somewhat after the scope of the line-item vetoes became apparent. The massive extent of the Governor’s vetoes caught many by surprise, and we are hearing that more than a few Republican lawmakers are willing to let these vetoes stand and let the governor take the blame for them.  For her part, Governor Whitmer is defending her actions by pointing out that the Legislature’s proposal underfunded critical needs like education and public health in return for putting a band-aid on roads.  Governor Whitmer has called for budget talks to reopen, and it is still possible that, after the dust settles, there will be an effort to appropriate the nearly $1 billion that was vetoed.  It is also possible that those funds will sit unspent in 2020 (see article below).
 
Governor and Legislature Continue to Talk about Budget
 
Immediately after Governor Whitmer issued 147 separate line-item vetoes, the mood in Lansing was grim.  Many members of the House and Senate Appropriations Committees seemed content to allow the cuts to stand.  Then, on October 8, House and Senate Republicans introduced a large number of supplemental budget bills aimed at restoring some of the more politically sensitive line-item vetoes made by the Governor.  Funding for items such as autism services, dementia care, and local jail reimbursement were introduced as separate bills – 23 in all.  Likewise, Senator Curtis Hertel introduced a supplemental budget bill that reflects the Governor’s priorities.  Hopefully this is a sign that there will be continuing work done to reach compromise on the 2020 budget.  Whether or not there is any progress on the issue of road funding during this process is yet to be determined. 
 
Key items funded by Republican supplemental bills:
 
Dementia Care and Support Program
Funding to assist rural hospitals
Rate increase for pediatric psychiatry services, and neonatologists
Funds for autism services
Grants for senior services
Opioid response grants
Secondary sheriff road patrol funds
County veterans’ services
Summer reading programs
Secure schools grants
Payments in Lieu of Taxes for local governments
PFAS mitigation for municipal airports
 
Key items funded by Governor’s supplemental proposal (not a comprehensive list):
 
Department of Corrections (total $25.1 million)
 
New custody staff training
Community Corrections and Offender Success Services
Field Operations
Prisoner Health Care Services
Tether replacement
 
Department of Health and Human Services ($241.5 million)
 
                Family Preservation Services
                Healthy Homes Program
                Healthy Michigan Plan Administration
                Health Plan Services
                Autism Navigator
                Federal Health Insurance Fee (this item alone is $180.5 million)
 
Department of Military and Veterans Affairs ($2.1 million)
 
                County Veteran Service Fund
 
Department of State Police ($11 million)
 
                Secondary Road Patrol Program
 
Department of Technology, Management and Budget ($73 million)
 
                Legislative Retirement
                Information Technology Investment
                Michigan Public Safety Communication System
                Special Maintenance for State Facilities
                2020 Census
 
Both the Legislature and the Governor include funding for autism services, secondary road patrol and county veterans’ services in their wish list.  Aside from those items, there are not many shared goals.  So far, neither side seems willing to give in.  Although negotiations are continuing as of this writing, they seem to break down daily.  The conventional wisdom in Lansing is that sometime before the end of the year there will be some kind of agreement on a limited supplemental budget to restore some of the line-item cuts made by the Governor.  There are those too, however, who feel that the Legislature may just walk away from these discussions and begin preparing for next year.