Michigan budget standoff heats up (and more federal COVID relief money is on the way) | Michigan Radio
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Michigan budget standoff heats up (and more federal COVID relief money is on the way)

Mar 12, 2021

The battle over the state budget in Lansing seems to be heating up, not cooling down.

Republican leaders tied parts of their original budget plan to Governor Gretchen Whitmer's signing of bills that would have reduced her emergency powers. She, in turn, used line-item vetoes on those sections of the budget. Now, there could be a lawsuit.For analysis of the situation, Michigan Radio's Doug Tribou spoke with Zach Gorchow, the executive editor and publisher of Gongwer News Service.

School spending caught in the middle

The Senate voted Thursday to give Senate Majority Leader Mike Shirkey power to file a lawsuit against Whitmer over circumventing the Legislature's control of the budget with line-item vetoes. 

Gorchow believes Whitmer's next move on federal school aid is key.

"I think the first question is, will Governor Whitmer disperse $841 million to schools?" he said.

In the Legislature's COVID relief bill, if the governor vetoed separate legislation that moved some emergency powers away from the state and to local health departments, $841 million of $2 billion for schools would not be appropriated.

Governor Gretchen Whitmer provides an update on the state's COVID-19 response in a press conference in February.
Credit File photo. State of Michigan

"However, the Whitmer administration is looking at least one or two ways around that language to still disperse the full $2 billion to schools. One of those ways is to use language in the school aid statute that basically says all federal money is automatically appropriated," Gorchow said.

"And then there's another more complicated scenario. ... But I have a strong suspicion they're going to find a way they believe is legally sound to disperse the money anyway. And if that happens, the Senate made it clear they're going to take her to court."

Where does that leave the state's response to COVID-19 now? 

Gorchow notes the majority of the $4.2 billon in the budget has been approved. 

"The Legislature did pass, and the governor did sign, a lot of money to help with COVID testing needs, and  ramping up vaccines. There's still over $1 billion going to schools," he said.

More federal dollars coming

This fight could be politically damaging to both Whitmer and the Legislature's Republicans. But while the standoff in Lansing continued, President Joe Biden signed a new federal COVID relief package that includes $1,400 checks for many Americans.

Gorchow's not sure whether that news will buy more time for politicians in Lansing. 

"I don't know if it provides political cover, and I don't know how much the public is really attuned to the machinations of what's happening in Lansing. It's not the same kind of direct relief in the state legislation," he said.

But Gorchow does expect the federal dollars to have a massive impact on the state's finances. 

"The bill President Biden signed sends $10 billion to the state. About 55 to 56% of that will be for the state of Michigan, the rest for local governments. There was a shortfall projected around May of last year [of] more than $3 billion. But the way the economy has sort of rebounded, the shortfall doesn't really exist," Gorchow said.

And that turnaround could create more strife in Lansing.

"The budget is basically balanced, so this is an incredible windfall of money. This could really lead, again, to a major standoff between the Legislature and the governor on how to appropriate it. 2022 politics are already in full force. Republicans in the Legislature are clearly determined to do anything they can that they think will damage the governor's reelection hopes."