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Whitmer, GOP leaders table road funding talks to focus on budget

Jonathan Oosting
The Detroit News

Grand Rapids —  Gov. Gretchen Whitmer on Monday reversed her vow to veto any state budget that does not include a “real” plan to fix the state’s crumbling roads, agreeing to postpone negotiations on her signature issue to avoid a potential government shutdown.

Whitmer and GOP leaders began the day with a joint statement announcing a commitment to work together to complete a state budget by the end of the month and then resume road funding talks at a later date.

But the bipartisan tenor quickly faded as the Democratic governor again blamed Republicans for the impasse over long-term road funding while pushing back against claims she had caved on her pledge to “fix the damn roads,” a key mantra of her winning 2018 campaign.

Gov. Gretchen Whitmer and the Republican leadership have agreed to move forward on a state budget without more funding for road repairs. A budget must be passed by Oct. 1 to avoid a partial government shutdown, and road funding presented an obstacle.

“There are a lot of people who probably think that this is an easy job, who don’t understand the ramifications of what a shutdown would mean and who think that the Republicans have shown any seriousness in solving the roads problem,” Whitmer told reporters after scheduled remarks at a Grand Rapids Economic Club luncheon.

The governor, who had proposed a 45-cent-per-gallon fuel tax hike that would have given Michigan the highest rate in the nation, suggested some GOP lawmakers “would like to see a government shutdown” for political reasons.

“It is abundantly clear to me that there are some that don’t want to put real solutions for roads on the table and be serious about this,” Whitmer said. “It’s not fun to be the adult in the room, but the fact of the matter is we’ve got important work to do in keeping the state of Michigan open and running.”

A spokesman for House Speaker Lee Chatfield, R-Levering, suggested most people could "see right through" the governor's rhetoric.

"The House and Senate both passed budgets months ago, but the Republican leaders agreed to wait to help Gov. Whitmer pursue her top personal priority," Gideon D'Assandro said Monday afternoon.

"After months of no movement and no willingness to compromise, they decided last week to focus on the budget and get that done before the deadline."

The governor is the only person focused on the potential for a partial government shutdown, said Amber McCann, a spokeswoman for Senate Majority Leader Mike Shirkey. 

"I guess we don't know from one minute to the next if the governor is sincere in her desire to work together or anxious to pull the plug," McCann said Monday afternoon. "The Senate will deliver a budget on time, no matter what."

Michigan officials are constitutionally required to have a budget in place by the start of the new fiscal year, Oct. 1. 

Republicans had pressed Whitmer to set aside road funding talks last week by announcing plans to forge ahead with their own budgets without a long-term road funding deal or input from the administration.

Whitmer’s office had blasted the unilateral budget action as a “Trump-style shutdown" game but cancelled a Monday morning press conference after weekend talks with GOP leaders. 

Did Whitmer 'cave'?

The first-term Democrat unveiled a budget in March that proposed to fix roads by raising fuel taxes from 26.3-cents to 71.3-cents per gallon in three phases and would have generated $2.5 billion a year once fully implemented in 2021. 

The Republican-led Legislature balked at the fuel tax plan. GOP leaders have not publicly proposed any long-term road funding alternatives but claim they have presented alternative options to Whitmer during private negotiations. 

Shirkey said last month he expected a final road funding deal would include a gas tax increase of less than 10 cents per gallon spread out over three years. He also has pushed a plan to refinance debt in the state’s teacher pension system to free up cash for roads, which Whitmer has said she does not want to do.

The 45-cent fuel tax hike was a linchpin of Whitmer's $60.2 billion executive budget proposal. It would have produced $1.9 billion in new and annual road funding revenue while freeing up another $600 million to boost spending on schools and other priorities.

Whitmer appears to have “caved” on linking road funding to the budget, which means Democrats may win few — if any — legislative priorities during her first year in office, said Matt Grossman, Director of the Institute for Public Policy and Social Research at Michigan State University.

The administration “either gave away their leverage or never actually had the leverage they thought they had to get Republicans to make concessions in terms of increasing revenue or making funds available for Democratic priorities,” he said, acknowledging that deals of the budget are still being worked out. 

The no-fault auto insurance reform law Whitmer signed in late May remains the most significant bipartisan agreement so far during the state’s newly divided government.

That “could be viewed as a win for Whitmer, but it can’t be characterized as a win for Democrats or liberal policies,” Grossman said of the insurance reform law. “It was more favored by Republicans.”

Whitmer likely made a “calculated” decision to delay road funding talks but likely lost some leverage in the process, said TJ Bucholz, a Democratic strategist for Vanguard Public Affairs in Lansing.

“I understand that you’ve got to balance the budget any way you can, but I’m a little worried that this sort of compromise in this fashion negatively impacts the ability to get a substantive deal done on roads,” he said.

Budget talks proceed

House Minority Leader Christine Greig, a Farmington Hills Democrat who recently called Whitmer's proposed 45-cent fuel tax hike an "extreme" that was unlikely to pass the Legislature, on Monday urged the governor to create a new task focused on finding” real, long-term road funding solutions immediately.”

“Averting a government shutdown is a win for all Michiganders, but a budget that doesn’t offer a long-term solution to fix decades of underinvestment in our schools and infrastructure is not the solution we need,” Greig said in a statement. “We must do all we can to finally and permanently solve this problem.”

The House and Senate approved separate budget bills in June that did not include any new fuel tax revenue and proposes smaller funding bumps for roads and schools. 

The Legislature last week announced a series of upcoming conference committees, which are scheduled to begin meeting Thursday to iron out differences between budgets passed by each chamber — and now the Whitmer administration.

Those conference committees will proceed as planned, McCann said Monday, explaining the schedule will not be altered.

Whitmer said negotiations over spending targets "have started in earnest" and told reporters she hopes road funding talks restart "as soon as we get the budget done."

"One way or another, we’re going to fix the roads in Michigan," she said. 

Shirkey had pushed to separate the budget from road talks and “did not agree to anything specific on roads” to get Whitmer's agreement to the approach, McCann said.

Chatfield “just committed to keep talking” about road funding with the governor once the budget is completed, D’Assandro said.

Mike Nystrom, executive vice president of the Michigan Infrastructure and Transportation Network, said he was disappointed the 2020 budget will not include a “comprehensive” road funding solution, noting the cost of repairs are expected to climb with inaction.   

“If our elected officials continue to kick the can down the road, Michiganders will face yet another pothole season without a real solution and Michigan will continue with its national reputation as the pothole state,” he said.

Staff Write Beth LeBlanc contributed