Shutdown threats loom: shut SOS offices, no lottery games, halted road projects

Beth LeBlanc
The Detroit News

Residents looking to buy a fifth, play a round of Fantasy 5 or bag a five-point may be limited by the budget drama roiling Lansing ahead of Tuesday's deadline to adopt state department budgets or risk a partial shutdown.

Wholesale liquor sales across Michigan, state lottery games and deer hunting licenses for the start of bow season Tuesday are some of the non-essential services on the line as Democratic Gov. Gretchen Whitmer reviews 16 budget bills sent to her by the GOP-led Legislature. Only five had made it to her desk as of Thursday evening.

Carpenter Joe MacDonald of Allen Park is tied off to a safety harness as he paints existing reinforcement rods under the I-94 westbound bridge deck over Middlebelt to help prevent corrosion on Aug. 29.

More far-reaching effects from vetoed budget bills would include the immediate halt of work on more than 150 road work projects throughout the state, the closure of 131 Secretary of State branches and temporary layoffs for roughly 48,000 state employees. This comes at a time when the state is already feeling the impact of more than 17,000 United Auto Workers members who off their jobs in Michigan on strike against General Motors Co.

Should a shutdown occur, no work would be done, but orange barrels would remain up, for instance, on the 17-mile stretch of the Interstate 75 modernization project running through Oakland County. People could not obtain driver's licenses or license plate tabs in person but could renew online. And workers wouldn't be paid while the government is shuttered.

But the potential for a partial government shutdown — let alone its reach and duration — remains to be seen when the clock strikes midnight at the start of Tuesday, experts say. The state is in “uncharted territory,” an independent expert and state budget spokesman agreed, thanks to broken negotiations and the unconventional manner in which the Legislature this week adopted spending plans.

“If Whitmer goes wild and vetoes an enormous number of line items, maybe whole bills, and the Legislature has no opportunity to react to that before Oct. 1, it could make for a pretty chaotic week,” said Bill Ballenger, a former GOP state legislator and longtime Michigan political analyst.

On Tuesday, the GOP-led Legislature adopted 15 of 16 department budgets during rapid-fire sessions in the House and Senate. The chambers had adopted the school aid budget the week prior, with support from House Democrats.

Those budget bills are making their way to Whitmer’s desk after a final legislative review.

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

"Those are the (options) that we’ve primarily been looking at," said Kurt Weiss, a spokesman for the Department of Technology, Management and Budget.

What's at stake

On Monday, department directors notified employees that they would continue shutdown preparations because the Legislature still had not transferred budgets to the governor. Individuals considered essential among the state’s 48,000 employees will be notified Friday that they’ll be required to report to work during a closure. 

“Gov. Whitmer remains committed to doing everything possible to avoid a shutdown,” the Monday letter said. “We all understand that this uncertainty is difficult and your continued commitment to your job and the people of Michigan is recognized and appreciated.”

The extent of a possible shutdown will depend on which budgets, if any, Whitmer vetoes or delays. 

While state law enforcement, child protective services, emergency response and health facilities would remain open during a traditional shutdown, other services could be shuttered.

The state could suspend work on 150 active road work projects across Michigan. Crews would be required to “button up” to allow for safe passage through the area, but lane closures largely would remain in place, said Jeff Cranson, a spokesman for the Michigan Department of Transportation.

Welcome centers and rest areas would close, but operations at the Blue Water, Mackinac and international bridges would continue, he said.

If Michigan's state government shut down, liquor stores would not be able to replenish their supplies. They could only sell what is already on their shelves come Oct. 1, 2019.

All Secretary of State branches could be shut down, but tab renewals could be completed via self-service kiosks. People whose licenses or license plates expire during a closure would not be charged a late fee.

Law enforcement officers have been asked to use discretion when dealing with motorists whose paperwork might be lagging because of the shutdown, but each department will handle the situation as they see fit, the Secretary of State's department said in a statement. 

The state could suspend all lottery games and the Department of Natural Resources would stop issuing hunting and fishing licenses, unfortunate timing with the opening day of bow season on Tuesday.

In addition, state parks, harbors, campgrounds and historical sites could close.

The Liquor Control Commission, which handles all wholesale liquor sales to Michigan stores, could suspend operations, meaning stores would only be able to sell what's already on their shelves as of Tuesday. The commission also would stop reviewing license applications.

Many state employment training programs, including academies for state police and corrections personnel, could be suspended. 

State revenue sharing with local governments and schools could be suspended, as could student financial aid and operations payments to higher education institutions.

Among the critical functions to remain in operation are parole and probation services, prisons, all state police services, child welfare programs, all public assistance programs, psychiatric hospitals, veterans homes and juvenile justice facilities. The state would continue to make debt service payments. 

Services that would continue at a reduced capacity include some environmental and public health emergency services, wildfire protections and some laboratory functions. 

All licensing services within the Department of Licensing and Regulatory Affairs would be suspended until the government would be reopened. The suspension of some state licensing programs would have a bigger impact than others. 

Budget bill options

A complete veto would send a department's spending plan back to the Legislature, where lawmakers would be pressed for time to find a new plan amenable to the governor or muster a two-thirds majority to override the veto. A veto override would be a tough sell among House and Senate Democrats.

Whitmer also has an obscure option that she is less likely to use, called an administrative board transfer, by which she could transfer funding to different priorities within a department's budget, Weiss said.

The technique was used by Republican former Gov. John Engler in the early 1990s and was promptly challenged in court by Democratic legislators. The Michigan Supreme Court eventually ruled it was a legal option, but not before Engler reached a budget deal with Democrats, Weiss said.

The most recent state shutdowns occurred in 2007 and 2009, under former Democratic Gov. Jennifer Granholm, when the governor, Democratic-led House and Republican-controlled Senate didn't reach an initial consensus on addressing the state’s billion-dollar shortfalls during the recession.

In each case, the government was closed only for a few hours, causing few inconveniences for residents. While the shutdown was short in 2009, Granholm and Republican lawmakers still sparred throughout October before reaching an eventual budget settlement.

“Practically speaking, it had negligible true impact,” Ballenger said. “It’s the image of a government shutdown, not the practical effect of a government shutdown, that usually endures.”

The two shutdowns resulted from a different budgeting process, where both sides were actively negotiating but unable to reach an agreement, said Dave Dulio, a political science professor and director of Oakland University's Center for Civic Engagement. There was no attempt at similar consensus during this budget session, he said. 

"The Republicans are saying here’s the budget, we’ve done our duty, we’ve done our job and its up to you to sign it or veto it," Dulio said. 

"They’re pushing their chips to the middle of the table and saying: Here’s our ante."

Unconventional budget process

In recent years, Republican former Gov. Rick Snyder introduced a budget in the spring and the Legislature responded with differing recommendations, committee hearings, target-setting sessions and then negotiations, Weiss said. The result was a consensus budget by June during the eight years of the Snyder administration.

Those budgets also were bundled into two packages — an omnibus budget and a school aid spending plan.

With a GOP-led Legislature and Democratic governor this budget season, negotiations were likely to be bumpier.

But Whitmer’s proposal of a 45-cent-a-gallon gas tax increase to fund road repairs in her February budget recommendations set off an immediate clash between the executive and legislative branches. It would mark the largest fuel tax increase in Michigan's history and a more than 170% increase from the current rate of 26.3 cents a gallon.

In June, Senate Majority Leader Mike Shirkey, R-Clarklake, and House Speaker Lee Chatfield, R-Levering, followed tradition and suspended the session for roughly two months for lawmakers' "in-district work period" with no budget recommendations in place but firm opposition to Whitmer’s plan. The House and Senate leaders said they continued to meet with Whitmer through the summer while the rest of the Legislature was out of session.

Whitmer has criticized the Legislature’s summer break and vowed to veto any plan that didn’t include a long-term road funding hike.

When legislators returned in August, discussions continued with Whitmer until they agreed Sept. 9 to set aside long-term road funding talks and get a budget in place before Oct. 1. Negotiations ended a few days later over Shirkey and Chatfield’s insistence on including a roughly $400 million boost in one-time general fund money for roads, which Whitmer opposed because of it didn't represent a long-term funding source for road and bridge repairs. 

Shirkey and Chatfield promised to send budgets to the governor without prior consensus.

“We could not have predicted that our talks would break down over my governor wanting less money to fix the roads, but in the end, we could not accommodate her position," Shirkey said. 

Whitmer quickly countered that the only reason a budget wasn't already completed was because "Republicans wasted two months by going on vacation this summer instead of staying in Lansing to negotiate."

What's been sent

The 16 budgets headed for Whitmer’s desk include $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 called the budgets "a mess" on Tuesday, noting that the transportation budget would rebuild roughly 39 miles of freeway and fix about four bridges.

“The Republican budget cuts will restrict people’s access to health care, threaten our public safety and widen our skills gap," Whitmer said in a statement. 

Besides the funding amounts there are other provisions in the budgets to which Whitmer could take exception, including several arguably onerous reporting requirements for Attorney General Dana Nessel; the transfer of the Independent Citizens Redistricting Commission from under the purview of the Department of State to the GOP-led Legislature, which has strongly opposed the commission; and a corrections budget provision that would withhold state jail reimbursements in counties with so-called sanctuary city policies. 

The next few days will be telling, Dulio said. 

"The political positioning is in full swing," he said. "And it will continue to play out until we have 16 signed budget bills or a shutdown.