Whitmer officials attack GOP cuts in new budget showdown

Beth LeBlanc
The Detroit News

Lansing — The threat of a government shutdown has subsided, but Gov. Gretchen Whitmer's department chiefs are criticizing the Legislature's proposed budget cuts and mandates that would affect prisons, higher education and K-12 schools.   

The spending plan attacks provide a guide for areas where Whitmer may use her line-item veto to temper cuts or cancel requirements before a Monday 11:59 p.m. deadline. The Democratic governor has called the spending plan "a mess," but has indicated she won't shut down state government by vetoing any of the 16 department budget bills.

Gov. Gretchen Whitmer with Speaker of the House Lee Chatfield

The proposed cuts helped Republican legislative leaders cobble together an extra $400 million in one-time money for fixing roads and bridges. But the Whitmer administration argues the proposed reductions and mandates affect important programs, including cybersecurity, for a one-time spending spree that won’t adequately address Michigan's crumbling infrastructure.

“You’ve created harm in other areas and other important services to come up with money for roads that doesn’t come close to solving the problem,” said Kurt Weiss, a spokesman for the state’s budget office.

But Senate Majority Leader Mike Shirkey, R-Clarklake, and House Speaker Lee Chatfield, R-Levering, have contended the extra cash would repair more roads and bridges while negotiations eventually continue about finding a long-term road funding solution. Chatfield has argued the budget plan also "funds critical services and protects their household budgets."

“The people of Michigan deserve a state government that reflects their priorities and makes responsible, long-term decisions," the speaker said Tuesday. "... The state budget finalized today does all of that, and that is why it received strong, bipartisan support." 

The budget office, which received Friday the last of the 16 budget bills adopted by the Legislature, planned to work with Whitmer through the weekend and will “have more to say on what actions the governor will take early next week,” Weiss said.

Departments are hoping Whitmer’s veto pen will undo the Republican budget shifts that freed more one-time money for roads. Absent such action, some departments want to sit down with legislators to discuss the impacts on their services.

Budget dissatisfaction from some departments is “unavoidable” in most fiscal cycles, said Shirkey spokeswoman Amber McCann. Much of the disconnect stems from a “philosophical difference” between departments that feel their funding levels automatically should be sustained or increased from year to year while the Legislature has to reevaluate and reprioritze spending each year, she said.

“The Legislature, the Senate Republican caucus, in particular, views it as a responsibility to review and appropriate dollars, not to just assume that this year’s budget will be the same as next year’s budget,” McCann said.

Budget breakdown

Sixteen department budget bills were delivered to Whitmer by Friday proposing $59.9 billion in total spending, slightly less than the $60.2 billion spending plan Whitmer introduced but 2.8% more than current year spending.

Key parts of the Legislature's budget plan include $15.2 billion for K-12 education, $5.3 billion for roads and $5.2 billion for general government. 

Whitmer has the option of signing the budgets as they are, vetoing certain line items within the funding bills or declaring some items within the department bills “unenforceable.”

While the $400 million allocation to roads has been a subject of particular angst in negotiations, the ripple effects of the one-time funding moved through many of the department budgets adopted Tuesday, Weiss said. 

"There’s concerns across a majority of them," Weiss said. "That’s how they came up with their $400 million ... is by cutting the majority of the department budgets.”

The $400 million road funding increase results from year-to-year growth for the Department of Transportation, pruned line items and unused work project funds in various departments, said Rep. Shane Hernandez, R-Port Huron, chairman for the House Appropriations Committee. Hernandez defended the spending plan as a product of resourcefulness and re-prioritization. 

“I feel that we’re adequately funding these departments while we also find ways to fund roads,” Hernandez said. “There were areas where we found efficiencies, and we were able to get money to areas that are important to the people of Michigan.”

The method of using work project funds to patch the Legislature’s department budget cuts has been particularly problematic in the prison budget, Department of Corrections spokesman Chris Gautz said. 

On paper, the department appears to have a 0.4% overall appropriation increase, but the reality is a 2.4% funding cut, Gautz said. The Legislature appears to have misjudged how much money was in the department’s special equipment fund and suggested what the Corrections Department argues is an illegal reappropriation of money from a work projects fund.  

Barbed wire and fencing at a correctional facility.

“We think it was an honest mistake, and we’re very hopeful that, no matter what actions (Whitmer) takes, we’ll be able to sit down later with legislators,” Gautz said.

Even if the transfer were legal, the work projects money is being used for other priorities within the department, Gautz said, and would only constitute a one-time infusion of cash where a more steady stream is needed.

“Why is it that we have to make the choice of hiring more officers or fixing the roof they’re going to be working under?” he said.

The spending plan includes a 24% cut to the department’s education budget, which will result in the layoff of more than 75 education staff members and the shuttering of the women’s vocational village program, which was scheduled to open at the end of the calendar year. The impact could be greater next fiscal year.

In addition, the prison department will be unable to afford roughly 4,000 new tethers for parolees that are needed to accommodate Verizon’s switch from a 3G to a 4G network.

Gautz said he understands the need for more roads funding but cautioned against pulling from other priorities like public safety.

“If you want prisons in Michigan to look like the roads in Michigan, then you should leave this budget unchanged,” he said.

Roads, cybersecurity and education

While lawmakers have touted the increased road funding, MDOT said its budget still falls short of the governor's recommended roughly $2 billion increase achieved through a 45-cent-per-gallon gas tax increase.

The $106 million in funding for state trunk lines recommended by the Legislature would replace roughly 39 miles of freeway, department spokesman Jeff Cranson said. In addition, “one-time marginal installments of funding” like the $400 million infusion make it difficult for the industry to plan, he said.

“As the governor has said, it is a sliver of the total $2.5 billion (and growing) needed to halt the pavement decline,” Cranson said.

Gov. Gretchen Whitmer inspects a deteriorating bridge in Lansing on Aug. 12, 2019.

Other cuts to the Department of Technology, Management and Budget would affect cybersecurity and the Michigan Public Safety Communication System, a radio system used by first responders, said department spokesman Caleb Buhs.

The technology department's operational budget would be reduced 23% from the governor's recommendation — a $52.5 million cut. Cybersecurity funding within the department is about $2.4 million less than the governor’s plan.

The cybersecurity cuts come as agencies around the nation are increasing protections against hacking and other cyber threats, Buhs said.

“That’s going to have a significant impact on our ability to do our job,” Buhs said. “It's not possible to continue doing the work that we were doing yesterday tomorrow with these cuts.”

In another move, the state Department of Education’s budget has been broken up into quarterly allocations, a system that would create “havoc” and prompt the department to rewrite its copious contracts every quarter, said spokesman Martin Ackley.

The unconventional budgeting would allow the Legislature to exercise more control over the education department and ensure it is implementing the state’s new A-F accountability measure and properly allocating federal dollars for charter schools, Hernandez said.

“It would basically be a transfer through the appropriations committee,” he said of the quarterly allocation. “It would not go to the full floor.”

Since the transfer isn’t guaranteed, it creates quarterly uncertainty and an unnecessary hurdle when the department has already agreed to implement the A-F grading system for schools by the end of March, Ackley said.

“They know that we’re going to do this, so to hold our whole budget ransom for things we’ve promised to do is kind of a dangerous accounting practice,” he said.

Best Hall at Eastern Michigan University

Higher education would receive a 0.9% hike, but the increase for state operating support — which most directly affects tuition rates — tops out at 0.5%, said Dan Hurley, CEO of the Michigan Association of State Universities. Whitmer sought a 3% increase in a bid to make college more affordable.

The association is “deeply disappointed," Hurley said, arguing the meager hike would continue Michigan's shift of the cost of college to students and families instead of the state.

“The budget that’s been put forward is only going to put us further behind,” Hurley said.