Michigan governor will sign off on budget deal

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Michigan Gov. Gretchen Whitmer said she will sign a supplemental spending bill that frees up more than half of the nearly $1 billion that she vetoed from the state’s budget for the 2020 fiscal year, which began Oct. 1.

The legislation approved by lawmakers Tuesday restores $574 million of what the governor and lawmakers agreed were the most critical of those vetoed funds.

The spending plan doesn’t include any major funding for infrastructure, which was a major reason behind the budget vetoes that followed stalled budget negotiations earlier this year between Republicans who control the Legislature and Whitmer, a Democrat.

“This negotiated supplemental appropriations bill is an important step forward for Michigan, which includes funding for health care, rural and urban hospitals, tethers to monitor dangerous felons, and our vocational villages,” Whitmer said in a statement. “I support this bipartisan bill and will sign it, honor the terms, and not challenge any of its provisions. Let’s get it done, and let’s stay focused on building a stronger Michigan for everyone.”

“A lot of the focus in the supplemental deal were immediate needs," said Gideon D'Assandro, spokesman for Speaker of the House Lee Chatfield, R-Levering. "So things that are critical services or at risk of being shuttered, like schools or hospitals that had already missed payments, those took precedence."

Whitmer’s first budget proposal was built on a plan to raise Michigan’s fuel tax by 45 cents per gallon over the next two years to increase state revenue by $2.5 billion a year the Michigan Department of Transportation said is needed annually for roads.

Republicans rejected the first-year governor's proposal but did not unveil any long-term road funding proposals and instead proposed $375 million in one-time spending targeted at road and bridge repairs. Whitmer vetoed the plan.

Whitmer has said that she is disappointed no deal was reached on substantial new revenue for roads and infrastructure.

"The Legislature did not propose anything of substance this year," Whitmer said. "All the solutions that came out of the leadership this year was let the roads turn to gravel or steal from teachers’ pensions and neither of which was acceptable.”

The West Michigan Policy Forum, a conservative business group, in July proposed to have the state sell $10 billion of bonds to fund teacher pension obligations in order to free up $1 billion annually for road funding.

Whitmer has said road funding will be a top priority when she and the Legislature go to work on a new state budget next year.

The supplemental bills total $459.3 million, including $256.7 million for the general fund. There are still several hundred million dollars in unallocated funds that the Legislature will deal with when it returns to session next year.

Republican Senator Mike Shirkey, R-Clarklake, has said funding for more programs could be restored depending on how negotiations go in 2020. He said those talks could also include ideas on road funding.

Michigan has $6.4 billion of outstanding debt, including $1.5 billion of general obligation bonds, $3.4 billion of general fund-secured appropriation debt, $677.2 million transportation tax-supported debt, and $728.6 million in unemployment insurance bonds that repaid federal unemployment fund loans and are backed by a tax on employers.

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State budgets Infrastructure Gretchen Whitmer State of Michigan Michigan