On September 30, Governor Gretchen Whitmer issued line-item vetoes worth $947 million of the $59.9 billion state budget plan. She also received approval from a state board to shift $625 million within state departments to better reflect her budget priorities.
A solution to the standstill appeared close in early November when Whitmer and Republican leaders reported an agreement in principle to a budget deal. But negotiations stalled after Senate Majority Leader Mike Shirkey said he wants Whitmer to sign a bill that restricts the powers of the State Administrative Board to move funds within departments without legislative approval.
Theo Governor has said she will not sign any bill that limits her powers or those of future governors.
Now, nearly two months later, Whitmer and Republican legislative leaders remain locked in a standstill.
Hits to health care
Most of Whitmer’s 147 line-item vetoes were made to specifically target GOP interests as an attempt to get party leaders back to the negotiating table, but so far, that hasn’t happened.
That’s why some cuts could have a disproportionate impact on the rural communities many Republicans represent. One big hit is to health care in rural areas, where hospitals are already struggling to stay open.
- $34.3 million for critical access hospitals
- $17.5 million to educate doctors serving rural areas
- $16.6 million for rural hospitals
- $8 million to help rural hospitals hire obstetricians
This has health care advocates worried about patient access in rural areas. The Michigan Health & Hospital Association released a statement saying the vetoes are disappointing.
“For too long, hospitals in Michigan have operated with inadequate Medicaid reimbursement rates, which have continually moved further away from providing the full cost of care. The elimination of funding for hospitals further exacerbates the financial burden on Michigan hospitals, primarily those that are small or rural, and threatens access to care in our most vulnerable communities.”
Some cuts will affect more than just rural areas. The original budget plan had a $129.5 million increase for hospital Medicaid rates and a $10.7 million increase in pediatric psychiatric care provider rates. Both of those increases were cut.
Some vetoes, some new money for education
In a rebuttal to state Republicans, Whitmer vetoed $35 million for a per-pupil funding increase for charter schools, which charter school advocates condemned.
“Governor Whitmer wielded her veto pen as a vicious weapon against kids in Detroit and the public school teachers who dedicate their lives to educate them,” Beth DeShone, executive director of the Great Lakes Education Project, said in a statement.
Other education vetoes include $128 million of earmarks within the School Aid Budget, $38 million in tuition grants for Michigan colleges and universities, and $7 million for small, isolated school districts.
But the governor also used the state administrative board to shift $314.8 million from reserve funds to the education department’s operating budget. She also declared unenforceable the Legislature’s plan to dole out funding to the state Department of Education in four installments. She called that plan “a violation of the separation of powers.”
The 147 vetoes cover more areas than education and health care.
- $15 million in grants for monitoring PFAS at municipal airports
- $37.5 million for the Pure Michigan tourism campaign
- $37.3 million for Going Pro, a campaign to “elevate the perception of professional trades” throughout Michigan
Approximately $10 million has been cut from the Michigan Department of Corrections’ education budget, which means a brand-new, multi-million-dollar facility being built at the state’s only prison for women could now sit vacant.
Whitmer also vetoed $375 million in one-time funding for road and bridge repairs; the governor campaigned on fixing Michigan’s infrastructure and was pushing for a long-term spending plan, which Republicans opted not to fund.
Where's the $1 billion?
The leftover money from the line-item vetoes is going to remain in limbo until the governor or Legislature can figure out what to do with it.
It could be restored to the programs that were cut or redirected to other priorities, but that would require agreement from both sides.
Or, if it's not spent this year or returned to taxpayers, it could be added to next year's budget, assuming next year's budget can be agreed upon.