State lawmakers and Governor Gretchen Whitmer have less than one week to decide on a new state budget before a July 1 deadline.
Last year, negotiations stalled into October, causing headaches for schools and universities that started their academic years without knowing how much money they would have from the state.
On Tuesday, state leaders announced they had reached a general framework for spending targets in the upcoming budget.
Statewide political correspondent Rick Pluta says this is an important sign of progress.
"It's a first step towards going into the next phase of the negotiations, which is refining these agreements, narrowing it down and putting dollars towards programs and policies, so that the budget can be presented to the legislature and voted on," he said.
Pluta says lawmakers may be feeling the pressure of election year, both to prove to constituents they can get their job done and to have more time to be back home campaigning. But the budget isn't yet a finished deal, and politicians could use that ticking clock as leverage.
"There's still a lot of competing interests, stakes that are being put in the ground, and some demands that are being made, particularly, you know, by House Speaker Matt Hall, who's been sort of the squeaky wheel in all of this, is that he's always liked to use these deadlines as pressure points to get what he wants," Pluta explained.
There are not many details about what lawmakers and the Governor have agreed to so far for the budget, but Pluta says a primary focus will be figuring how to balance education and general spending.
"We know that we have a little more in the school aid fund that than what we were expecting, so there's that. We have a little less than we were expecting in what's called the general fund, which is what gets used basically for everything else, you know, so that's, you know, community colleges, public universities, local governments, environmental protections, social services," he said.
Cuts to spending, using education funding for general needs and tapping into the state's rainy day fund are all on the table.
With her last year in office, Governor Whitmer might also push for priorities like preserving her business incentives program, funding new child literacy efforts and creating more affordable housing options.
Pluta says he expects the rest of the this week to remain quiet as lawmakers iron out budget bills before an explosion of activity next week ahead of the deadline Wednesday.
Interview Highlights
On the latest budget negotiations
House Speaker Matt Hall, a Republican, Senate Majority Leader Winnie Brinks, a Democrat, and Governor Whitmer came up with a signed agreement on sort of broad spending targets on different areas of the budget. Now this might seem technocratic, but it's really important because it's a first step towards going into the next phase of the negotiations, which is refining these agreements, narrowing it down and putting dollars towards programs and policies, so that the budget can be presented to the legislature and voted on. That's why this is such a big deal.
On what we know so far about the spending plan
We know that we have a little more in the school aid fund than what we were expecting, so there's that. We have a little less than we were expecting in what's called the general fund, which is what gets used basically for everything else, you know, so that's, you know, community colleges, public universities, local governments, environmental protections, social services, you know, things of that sort, and one of the pressures that they might be facing is maybe to move a little of that school aid fund money over to help plug other budget holes and of course the school districts are going, you know, just absolutely not. Matt Hall says that he's going to press for more cuts, which are an inevitability, and you know it's just a question of how far that might go, and not dipping into the state's rainy day savings to, you know, plug any of those budget holes. Governor Whitmer and the Senate Democrats have said that, look, you know, this is why we have what's called a budget stabilization fund, a rainy day fund, which is to fill gaps when tougher times strike.
On what Governor Whitmer's priorities might be in her last state budget
One is salvaging the business incentives program that those basically giveaways to businesses in order to win projects have bipartisan support. They also have big bipartisan opposition, and that includes the Speaker of the House, who's not a fan, and so she's going to have to come up with something that can have some cross-party conservative and progressive appeal to get that done. She's made not finishing the job, certainly, but she's made setting up for success reading programs in schools to improve Michigan's dismal student literacy scores. And housing, that there is an affordable housing shortage, and there's wide agreement that something needs to be done about that, that it's an urgent problem.
Interview Transcript
Sophia Saliby: State lawmakers and Governor Gretchen Whitmer have less than one week to decide on a new state budget before a July 1 deadline.
Last year, negotiations stalled into October, causing headaches for schools and universities that started their academic years without knowing how much money they would have from the state.
Statewide political correspondent Rick Pluta joins us to talk about if state leaders will meet the deadline and what could be different about this year’s spending plan. Thanks for being here, Rick.
Rick Pluta: Hi, Sophia.
Saliby: So, it seemed like negotiations might stall again this year, but yesterday, you reported on a breakthrough in talks. What happened?
Pluta: So, what happened was House Speaker Matt Hall, a Republican, Senate Majority Leader Winnie Brinks, a Democrat, and Governor Whitmer came up with a signed agreement on sort of broad spending targets on different areas of the budget.
Now this might seem technocratic, but it's really important because it's a first step towards going into the next phase of the negotiations, which is refining these agreements, narrowing it down and putting dollars towards programs and policies, so that the budget can be presented to the legislature and voted on. That's why this is such a big deal.
Saliby: Do you think there's more pressure to get everything done on time, because it's an election year, and these people's seats are at stake?
Pluta: Yeah, on two fronts, I think. One is that it's an election year, and just candidates want to get back to their districts and campaign, especially for those in competitive seats, because there is no substitute for knocking on doors, going to local Chamber of Commerce lunches, and things like that, and meeting with voters to make the case for your re-election, and if you're not there, your opponent is, whether it's in a primary or in a general election, that's thing one.
Thing two is, and it's also election related, if you do this for a second year in a row, miss that deadline, then that's an issue that can be used against you, and how responsibly you're carrying out one of the most essential functions of your office, so they don't want this, and they certainly don't want it for the second year in a row.
Saliby: It sounds like there's still a lot to get done, a lot of details to work out. Could things still break down before next Wednesday, and they miss the deadline?
Pluta: I think we have seen time and time again that, yeah, things could fall apart and have to be put back together again. You know, that there's still a lot of competing interests, stakes that are being put in the ground, and some demands that are being made, particularly, you know, by House Speaker Matt Hall, who's been sort of the squeaky wheel in all of this, is that he's always liked to use these deadlines as pressure points to get what he wants.
I think one of the questions is how powerful a motivation is that this time around for the other sides to move toward Matt Hall on this versus the pressure he might be under to give way more to, you know, what's expected from the Governor Whitmer's office and from the Senate Democrats, who are probably in less of a mood this time around to give in.
Saliby: What do we know so far about what will be in this state budget compared to previous years?
Pluta: Well, the details are being worked out at this point at the budget subcommittee level, but we know that we have a little more in the school aid fund than what we were expecting, so there's that. We have a little less than we were expecting in what's called the general fund, which is what gets used basically for everything else, you know, so that's, you know, community colleges, public universities, local governments, environmental protections, social services, you know, things of that sort, and one of the pressures that they might be facing is maybe to move a little of that school aid fund money over to help plug other budget holes and of course the school districts are going, you know, just absolutely not.
Matt Hall says that he's going to press for more cuts, which are an inevitability, and you know, it's just a question of how far that might go, and not dipping into the state's rainy day savings to, you know, plug any of those budget holes. Governor Whitmer and the Senate Democrats have said that, look, you know, this is why we have what's called a budget stabilization fund, a rainy day fund, which is to fill gaps when tougher times strike. So, I think that's going to be, you know, some of the bigger debates.
Saliby: This will be Governor Whitmer's final state budget. Are there any major priorities or campaign promises from way back when she'll try to get funding for before she leaves office?
Pluta: There are three that come immediately to mind. One is salvaging the business incentives program that those basically giveaways to businesses in order to win projects have bipartisan support. They also have big bipartisan opposition, and that includes the Speaker of the House, who's not a fan, and so she's going to have to come up with something that can have some cross-party conservative and progressive appeal to get that done.
She's made not finishing the job, certainly, but she's made setting up for success reading programs in schools to improve Michigan's dismal student literacy scores.
And housing, that there is an affordable housing shortage, and there's wide agreement that something needs to be done about that, that it's an urgent problem. There are some differences of opinion there, and I think that she would like to leave office with something in place to create some more affordable housing options.
Saliby: Rick Pluta is a statewide political correspondent for the Michigan Public Radio Network. Thank you for joining us.
Pluta: Oh, it's a pleasure, Sophia.
This conversation has been edited for clarity and conciseness.
