Gov cuts GOP pet projects in bid to restart budget, road aid talks

Beth LeBlanc
The Detroit News

Lansing — Gov. Gretchen Whitmer made $1.5 billion in spending changes to the GOP-led Legislature's adopted budget over a 15-hour period, cutting almost $1 billion and transferring $625 million within state departments to reflect her key priorities.

After the Democratic governor announced 147 line-item vetoes Monday night, she used a rare State Administrative Board meeting Tuesday to move around money in the new $58.95 billion budget she signed into law. The moves were designed to shore up core priorities that the Legislature overlooked, Whitmer said at a press conference after the meeting. 

Among the larger items that were axed by veto were a $375 million boost in one-time funding for road and bridge repairs, a $240-per-pupil increase for charter school students and the entire $37.5 million budget for the popular Pure Michigan tourism campaign. The governor also declared more than 70 items "unenforceable."

Those vetoes and others targeted pet projects or districts of Republican lawmakers. They reflected Whitmer's priorities but also appeared to be designed to prod GOP leaders back to the negotiating table for a long-term road funding deal.

Those cuts may bring Republicans back to the table more quickly or they could be sold by the GOP as proof of punitive partisanship by Whitmer, said Dave Dulio, a political science professor and director of Oakland University's Center for Civic Engagement. The process has served as a window into the "checks and balances" of state government, he said. 

"Clearly, the number of line item vetoes is unprecedented," Dulio said. "There’s more there, but at the same time I think that it's also just a continued maneuvering of the governor’s power. She’s flexing the muscle that she has.”

Whitmer told reporters Tuesday that each of the decisions was difficult, but they were necessary to support core functions of government such as securing public health, safety and infrastructure. She expressed hope that all parties would come back to the negotiating table. 

"I don't relish using all of these powers, but they were absolutely necessary because the budgets they sent were fatally flawed," she said.

The $947 million vetoed will return to the state's coffers, only to be reallocated in a supplemental bill if the governor and Legislature can reach an agreement. Whitmer said she has invited the top four legislative leaders to a Thursday a quadrant meeting.

Senate Majority Leader Mike Shirkey said Tuesday he is in "no rush" to participate in Whitmer's "tug of war" or address the unprecedented number of line-item vetoes. But Shirkey and House Speaker Lee Chatfield said they were willing to talk with the governor.

"There is no amount of red pen usage that will result in enough green buttons pushed in the Senate to get my governor what she wants," said Shirkey, R-Clarklake.

Shirkey and Chatfield's willingness to participate in the Thursday meeting is a "step in the right direction," but it remains to be seen if any consensus comes from the meeting, said Bill Ballenger, a former GOP state legislator and political analyst.

"The real issue comes down to whether Whitmer’s actions have gotten Republicans' attention to the point that they are ready to deal with her to get their spending priorities restored," Ballenger said. Otherwise, legislators could leave the budget as is and "pin it on her," he said.

The Pure Michigan campaign has been one of the state’s best branding strategies in recent years, especially its short commercials featuring different areas of the state, such as Sleeping Bear Dunes National Lakeshore, narrated by actor and Michigan native Tim Allen.

The new 2020 fiscal year budget represents a small increase from last year's spending of about $58.2 billion. But it was a cut from the $59.9 billion spending plan approved by the Republican-led Legislature as well as Whitmer's proposed $60.2 billion blueprint that included a $2.5 billion tax increase — the 45-cents-per-gallon hike in the state's fuel tax.

Whitmer announced Monday evening that she had signed the 16 budget bills adopted by the state Legislature last week, but had issued 147 line-item vetoes for a total of nearly $1 billion in the process. Whitmer's statement accounted for roughly $503 million of the vetoes, but her office would not provide further details on the other $444 million in cuts. 

The governor's office released Tuesday an eight-page document listing each of the vetoes and a more than 40-page document detailing the department transfers.

Targeted vetoes

Several of the line item vetoes issued by the governor target Republican pet projects, Republican districts or what Whitmer called "pork barrel" spending by the GOP-controlled Legislature. 

What Whitmer identified as pork barrel was school aid spending focused on specific vendors, including $1.5 million for an online algebra tool from Algebra Nation. 

Three GOP representatives and one Democratic lawmakers signed a letter to Whitmer last week asking her to veto spending for certain vendors, noting that the contractors approached lawmakers "because schools are choosing not to buy them."

"They all voted for the budget by the way, which I don't understand that," Whitmer said Tuesday. 

Whitmer's veto included the elimination of a $240-per-pupil increase for public school academies, commonly referred to as charter schools, and eliminated $7 million for small, isolated districts. 

The loss to charter schools amounts to roughly $36 million total, said Dan Quisenberry, head of the Michigan Association of Public School Academies. The veto applied only to aid increases for charter schools — which are alternative public schools chosen by families — and not to traditional public schools. 

"Obviously, someone thought charter public school students were a way to get the attention of elected officials," Quisenberry said. "We don't feel like kids are political pawns. We'd like this fixed."

Whitmer said she didn't relish the tough decision, but said charter school spending increases wouldn't come at the exclusion of core funding priorities such as increases in prisons, Health and Human Services and cyber security.

"Like any line item, it means we have the opportunity to negotiate things back into the budget if the Legislature avails themselves of that opportunity," she said. 

Charter schools have come under fire from the state's largest teachers union, the Michigan Education Association, and other public education groups that want more regulation of the alternative schools. Charter school supporters have countered that the academies are frequently located in low-income neighborhoods where students need better educational choices.

Whitmer's initial budget proposal included $31 million for the Pure Michigan program, $5 million less than the previous year, but 24% more than what was allocated in fiscal year 2012. Her reasoning for proposing the $5 million cut was that "increasingly focused, digital, and measurable marketing efforts provide opportunities for cost efficiencies."

The Republican budget plan included a $1.5 million boost in spending, which would have brought the total to $37.5 million.

The Pure Michigan campaign has been one of the state’s branding strategies in recent years, especially its short commercials featuring different areas of the state narrated by actor and Michigan native Tim Allen.

But the funding for the tourism campaign has also generated controversy among fiscally conservative groups such as the Mackinac Center for Public Policy that argue the tourism industry should be funding the program. The center also has contended Pure Michigan pays for studies that over-inflate the value of the program's effectiveness.

The Pure Michigan campaign is a "fantastic ad campaign" that gives Michigan residents "pride," Whitmer said Tuesday, but the budget needed to protect core functions first. 

"At the end of the day, I'm always going to put public safety, like the tethers that we need to monitor in the state police budget, ahead of any ad campaign," she said. 

Other cuts targeted the Legislature's re-appropriation of work project funds, whose legality the governor and Department of Corrections questioned. 

Some vetoes zeroed in on rural or district-specific spending items, such as $14.8 million in county jail reimbursements; more than $24 million for rural hospitals, $10 million for rural jobs and capital investment programs; $4 million from county veteran services.

Whitmer cut $600,000 for traffic control given for car racing events near Michigan International Speedway, which is in Shirkey's district; $750,000 for the demolition of the former Deerfield Correctional Facility in Ionia, the district of Rep. Thomas Albert, R-Lowell; and $27 million in payments the state makes in lieu of taxes to rural, northern communities where the state owns tax-free forests, land and swamps. 

Transfers attempt to patch holes

With Whitmer at the helm Tuesday morning, the rarely used State Administrative Board sought to patch holes that remained after the Legislature’s budgeting process and Whitmer’s voluminous vetoes. 

Board members included Lt. Gov. Garlin Gilchrist, Secretary of State Jocelyn Benson, Attorney General Dana Nessel, state Treasurer Rachael Eubanks, state Superintendent Michael Rice and Michigan Department of Transportation Director Paul Ajegba during a session that hadn’t been similarly convened since a 1991 transfer meeting under Republican former Gov. John Engler. 

State Budget Director Chris Kolb proposed 13 resolutions during the meeting that transferred a total of $625 million within 13 departments.

Among the transfers highlighted by Whitmer were efforts to sustain funding for the implementation of the Legislature’s recent addition of a work requirement for Healthy Michigan or expanded Medicaid recipients. 

Other transfers included $6.1 million in the Health and Human Services budget and $9 million in Labor and Economic Opportunity department taken from various earmarks. They included an earmark for the Van Andel Institute, a West Michigan medical research hub founded by Jay Van Andel, a GOP donor and former business partner of Richard DeVos.

“DHHS, you look at that budget, and you’ll see the Republicans didn’t even include funding for their own work requirements,” Whitmer said. “A failure to fund these laws will kick tens of thousand of people off health care.”

The board also transferred $90.9 million in Attorney General Dana Nessel’s office from 43 separate line items to the department’s base operating funds. Within the Michigan Department of Civil Rights, the board transferred $1.5 million in museum support to complaint investigations and enforcement.

The board also adjusted the Michigan Department of Education's budget, one of the more 70 legislative items Whitmer found unconstitutional. 

The Legislature had broken the department’s budget into quarterly installments that the department could earn only if it complied with certain benchmarks, including compliance with a new A-F school accountability measure and proper dispersal of federal funds to charter schools. 

Whitmer found the arrangement “a violation of the separation of powers” and transferred $314.8 million from administrative reserve funds to operations.

About $7.5 million set aside for private well testing in the Department of Environment, Great Lakes, and Energy and $1.5 million in the HHS budget were diverted to implement a tougher lead and copper rule set by Republican former Gov. Rick Snyder. 

Some of the largest department transfers were $32.4 million to general services and base program line items in the Department of Technology Management and Budget; and $66.6 million in the transportation budget in budget shuffles to federal match programs, bus operations, aviation services and rail passenger services.  

The Management and Budget department's transfer doesn't fully address the department concerns about roughly $53 million in legislative cuts that would affect cyber security and information technology, but does devote some money for those purposes. 

About $12.4 million of the transfer for the Technology, Management and Budget Department comes from the retirement fund for legislators.

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