Gov. Whitmer and Lawmakers Work Together on Budget Crisis

Michigan Governor Gretchen Whitmer and State Lawmakers made a move to correct the major shortfall in the current state budget today. At first look, it looks like large reductions to State Police and the prison system, but federal dollars will plug many of those cuts.

The July 22^nd Executive Order 2020-155 slashes tens of millions from the Michigan State Police and Department of Corrections in what her administration is calling the first action intended to bring the current year budget back into balance. The 15-page executive order says the actions are contingent upon the approval of a majority of members of each appropriations committee. Those committees have signed off on the cuts. The plan will plug a $2.2 billion budget hole for the current fiscal year, which ends September 30^th.

63^rd State Rep. Matt Hall says the cuts made were not something the legislature and governor were fighting over, but “something we’re agreeing on.” He says a lot of the cuts should be offset by funds from the Federal Government.

“The legislature must appropriate the Federal Money, and we’ve done that. Two weeks ago we voted to send $512 million in Federal Cares Act funds to the schools to help them with COVID-19 related expenses. The cuts to the school aid fund were actually about $256 million, but with the Federal money, the schools come out way ahead.”

Among the Governor’s Executive Order Cuts, (without figuring back in the federal dollars) are:

Cutting State Police funding by 25%, or $118 million.
Cutting the Department of Corrections by 20% or more than $413 million.
Cutting the Department of Health and Human Services by 10%, or $483 million.
There also appear to be major cuts to transportation.

"In this time of crisis, it is our responsibility to come together and build a budget that reflects a bipartisan commitment to the things we value most as Michiganders," Whitmer, House Speaker Lee Chatfield, and Senate Majority Leader Mike Shirkey said in a joint statement.

The agreement "provides crucial funding for Michigan families, schools, and communities grappling with costs incurred as a result of the virus," they said.

No specific spending cuts have been spelled out yet, but Whitmer and GOP leaders say Michigan will save $490 million through hiring and discretionary spending freezes, layoffs, and "other identified savings" in state government. To avoid further cuts, officials will spend $350 million from the state's $1.2 billion Rainy Day Fund.

The current year $2.2 billion shortfall is a billion less than was projected in mid-May. Next year’s budget, which begins in October is projected to be short another $3 billion.