Two-year budget keeps rolling
By Laura Weber, Michigan Public Radio Network
LANSING, MI – There has been one question dominating almost every discussion, debate, and even casual conversation in Lansing recently; what will Governor Rick Snyder do in his executive budget proposal? The answer comes Thursday when he presents his budget proposal. One thing we do know is the new Governor wants to change the annual budgeting process to a two-year rolling budget.
The Michigan Public Radio Network's Laura Weber reports.
A two-year rolling budget means the Legislature would approve next year's budget, and have a projection or a proposal for the following budget year ready to go. That projected budget could be amended when the time comes.
"The main thing about the two-year budget is being able to look forward and saying, you know, where are we going?" asks state Budget Director John Nixon. He says looking at a broader financial picture for the state would alleviate a lot of problems with the budget.
"You know, for the last decade, all we've been talking about, particularly in Michigan, but in all the states, is a budget problem," Nixon says. "And our goal is to get the budget in the back seat, get it solved, so we can get going on some exciting things - economic development, where do we want education to go, where do we want higher education to go, how can we move our state forward."
The state cannot approve a hard-and-fast two-year budget without a change to the Michigan Constitution. But that does not stop lawmakers from approving a one-year budget and a look-ahead proposal. And that's just about what Oakland County Executive L. Brooks Patterson does, except he budgets even farther out.
"One year is actually implemented, two and three in place to roll in at the right time, so that's how we do it here in Michigan, I mean here in Oakland County," Patterson says. "We're bound by the same laws the state is."
Patterson says moving to a two- and then three-year budget did not prevent his county from feeling the effects of Michigan's economic downturn. But he says budgeting three years out made cuts smaller, less painful and less dramatic than they have been on the state level.
"We see the problems, we see the challenges out there on the horizon," Patterson says. "By the time they get to our desk in the current fiscal year, the problems have been mostly resolved; the mountain is now a molehill, we can deal with it. Not to have that long-range look is every year you're going to get smacked, you're going to get smacked because you didn't see it coming."
Patterson says he gives Governor Snyder a lot of credit for taking on such a complicated and troubled budget.
"This is Day One for him, this is Year 19 for me," Patterson says. "I'm willing to give the Governor some time because it's a major change of how we do business to go from a 1-year budget to a 2-year budget, and it just doesn't happen overnight."
Twenty states work on some sort of two-year budget cycle. That's about half the number of states that had two-year budgets in the 1940s. A report from the National Conference of State Legislatures says that decline has been due in part to a surge in power of state Legislatures. But the report also says there are not necessarily any distinct advantages to budgeting for two years rather than one, other than perhaps a feeling of preparedness and streamlining in state government.
State Senator John Proos agrees. "We might as well set out those targets and say Let's go achieve that goal,'" Proos says. "After all, if you don't have goals that you're trying to achieve, you're not going to be able to hit those targets at all in the first place."
And Proos says a two-year budget could help make another big change in state government - moving to a part-time Legislature.
"Work will always expand to fill the time, there's no doubt about that," says Proos. "So I look at this and say let's be reasonable about it, if it means that we move to a part-time Legislature like most other states in the nation, and that we also move to a multi-year budgeting process, then I think we've streamlined Michigan's governmental operations and hopefully we've found efficiencies in the process."
The state is staring down a deficit of about 1.5 billion dollars, and Governor Snyder has also called on lawmakers to wrap up work on the budget by May 31st. There's a lot of work to be done, and a lot of tough choices to be made; many people in Lansing suspect Snyder will propose deep, painful cuts at all levels of state government.
All of this in an atmosphere where term limits and a Republican sweep of an election brought many freshmen - including Snyder - into the state's budget process. But Senator Proos says there's no reason they cannot burn the midnight oil and get a two-year rolling budget rolling.
"Sure, these folks have been elected and may be new to the process, but that doesn't mean they can't read and that doesn't mean they can't sit down and study hard during the first few weeks of this budget process and be ready for the passage of budgets in May," says Proos.