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In seafaring, headwinds are a force pushing against the direction you want to go.
The economic headwinds in Michigan appear to be building as the Legislature pushes into what’s supposed to be the final stretch of the budget season.
As we write this, the Consensus Revenue Estimating Conference (CREC) is meeting at the State Capitol to make a final determination on how much money the Legislature and Governor Gretchen Whitmer will have to spend in the new fiscal year.
The executive branch and both chambers of the Legislature are at the table to consider economic data and future-focused analysis to agree to a reliable, common set of numbers to craft a budget. (Before CREC, the budget process was bogged down from the outset by disagreements on how much there was to spend… although it could be greased at the back end by tweaking those expectations).
But there are circumstances this year that are leading to a lot more questions than usual heading into the summer.
One of them is lingering uncertainty about the impact of tariffs on the economy and state tax revenues. We pulled this wonky summation from a presentation prepared by the University of Michigan’s Research Seminar in Quantitative Economics:
Michigan’s labor market has lost momentum relative to the nation’s since early last year. The state’s unemployment rate has climbed more steeply than the U.S. rate, while local job growth has also slowed more meaningfully. Against this concerning backdrop, Michigan now faces the dual challenges of a new and unsettled tariff regime and weaker national growth prospects.
The state House and Senate fiscal agencies both project that a softening economy will leave the Legislature with less money to work with than initially projected in January.
Take all that and add to the mix the fact that House Speaker Matt Hall (R-Richland Twp.) has said he doesn’t necessarily think the Legislature has to wrap up the budget by the July 1st statutory deadline. That deadline is part of a state law that is supposed to offer some certainty to school districts, community colleges, public universities and local governments, which have fiscal years that begin July 1st.
But there aren’t exactly penalties for blowing past the deadline. And let’s not forget, the speaker has shown repeatedly that he has no qualms about redrawing boundaries. The hard deadline is Oct. 1st, the beginning of the state government’s fiscal year. The Michigan Constitution requires the state to have a balanced budget.
While not necessarily welcome news, less money plays into Hall’s seemingly set-in-concrete position (shared by many progressive Democrats) that Gov. Gretchen Whitmer’s business incentives are a non-starter in this budget. So headwinds for spending may be tailwinds for Matt Hall’s more austere vision.
The CREC meets In January and May, but with so much doubt laced into the projection, we wouldn’t be surprised to see an ad hoc meeting of the group over the summer to reset budget expectations.
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Have questions about Michigan politics? Or, just want to let us know what you want more of (less of?) in the newsletter? We always want to hear from you! Shoot us an email at politics@michiganpublic.org!
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A ballot campaign wants to make Michigan a ranked choice voting state; plus nearly 800 earmark requests from state House lawmakers totaling an estimated $4 billion are made public.
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What we’re talking about at the dinner table
Tate. Again: State Rep. (and former House Speaker) Joe Tate is a retired Marine who doesn’t seem to have quit in him when it comes to running for office. But, which office? He’s toggled from possibly running for Detroit mayor, possibly challenging U.S. Rep. Shri Thanedar (D-recently moved to Detroit) but has now thrown his hat into the race for Michigan’s open U.S. Senate seat. On the one hand, a lot of Democrats remain miffed that they lost control of the Michigan House on his watch and adopting progressive priorities fizzled following a spurt of activity early in the last session. But it is already a crowded field with three other Democrats announced, and possibly more to follow, which means a candidate can win the primary with less than a majority of the total vote. In the meantime, former U.S. Rep. (and failed 2024 GOP Senate nominee) Mike Rogers is making a go of it again as the only announced Republican so far. But a lot of eyes are on U.S. Rep. Bill Huizenga (R-Zeeland) to see if he jumps in.
Oof: The Legislature extended by a month the deadline for state elected officials to turn in constitutionally required financial disclosure statements that are supposed to reveal possible conflicts of interest. That’s because the Secretary of State’s website to accept the reports and make them accessible to the public has suffered from crashes and other glitches. House Republicans plan to hold oversight hearings on what went wrong and will undoubtedly demand that Secretary of State Jocelyn Benson show up to testify in person. Whether she personally appears or not, the episode is already providing opposition fodder to bedevil her nascent campaign for the 2026 Democratic nomination for governor.
Master Deflective: With a new book on former President Joe Biden’s health making headlines before it’s even been released, many of those close to Biden are being asked tough questions about what they knew (and when) about his reported cognitive decline. Governor Gretchen Whitmer was pressed on the question this week on CNN and answered, “As a governor in a state halfway across the country… I was busy working… I can’t speak to that directly.” There were follow-ups and Whitmer replied, “I didn’t see the president frequently.” Whitmer was a national co-chair of Biden’s reelection campaign and defended him shortly after his disastrous debate performance that led to him dropping out of the race.
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Yours in political nerdiness,
Rick Pluta & Zoe Clark
Co-hosts, It’s Just Politics
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IJP ON THE ROAD
Both Zoe and Rick were panelists this week on WKAR’s Off the Record. Republican State Representative Ann Bollin - Chair of House Appropriations Committee - was the guest to discuss the state budget. Watch now
