There’s budget gridlock in Lansing. The Legislature and Gov. Gretchen Whitmer have already blown past one deadline to pass a new budget and another more significant deadline is on the horizon, and with it the possibility of a government shutdown.
Zach Gorchow, the president of Gongwer News Service Michigan, joined Morning Edition host Doug Tribou for a discussion about the politics of this year’s impasse and the history of contentious budgeting in the state.
Doug Tribou: We have a divided legislature right now. The House is controlled by Republicans under Speaker Matt Hall. The Senate is led by Democrats and Senate Majority Leader Winnie Brinks. And Gov. Whitmer is also a Democrat.
The Senate passed its version of the budget in May. Speaker Hall has been clear that Republicans want a new road funding plan, but details on that and anything else have been pretty sparse. House Republicans did announce Tuesday they will roll out their budget details next week. What political strategy do you see in all of this for the House Republicans in the approach they've taken so far?
Zach Gorchow: Well, I think in some ways, the speaker of the House, Matt Hall, is trying to play the two Democrats you just mentioned off of each other, Sen. Brinks and Gov. Whitmer. He's trying to ally with the governor and put a squeeze on the Senate Democrats.
It's because there's this disconnect between the Senate Democrats and the governor. And Senator Brinks last week downplayed that, said there's no bad blood, but we can only go based on what we see. And right now, it seems like there's some really deep differences about how to approach the budget and roads between the Senate Democrats and Gov. Whitmer. And the Republican speaker is taking full advantage of this, because really, it should be Sen. Brinks and Gov. Whitmer putting the squeeze on Matt Hall.
DT: If we go to a government shutdown at the end of September, are they all sort of trying to stage who gets the blame politically? Is that what happens in these things?
ZG: Matt Hall and Winnie Brinks are doing that. Gov. Whitmer is kind of trying to float above it all. She has gone out of her way all year not to attack Speaker Hall. She seems to have made the calculation that, "I need this guy if I want to get roads done. That's been my number one priority to get a long term funding solution for roads."
So one would have thought, you might have seen the governor and Senate Democrats joining hands and really putting the pressure on the House Republicans. But unless — and until — the Democrats kind of get unified and on the same page publicly, the pressure is going to be not as much on the House Republicans as it might be.
"It does really feel like this is going to be a total game of brinksmanship going down to the wire."Gongwer News Service Michigan President Zach Gorchow on the possibility of a budget impasse forcing a state government shutdown
DT: Under former Gov. Rick Snyder and current Gov. Gretchen Whitmer, most budgets have been done by July 1. The last time that deadline was missed was in 2021. But you have to go back to the administration of Gov. Jennifer Granholm for the last actual government shutdowns. There were two then in 2007 and 2009.
Could you give us a sense of what would be triggered by a shutdown if we do end up going down that road again this year?
ZG: Well, what happens is, if you don't have bills passed by the Legislature and signed by the governor into law that spell out how billions and billions and billions of state and federal revenues are to be spent, the state has no spending authority at 12:01 a.m. Oct. 1. Now, the governor does have a fair amount of executive authority to uphold the [state] constitution. And the constitution requires the state to spend money on some very specific things.
It wouldn't surprise me at all in a protracted shutdown, if it were to ensue — and those two shutdowns you mentioned were not protracted, they were four hours or less both times — that Gov. Whitmer might say, "We are pushing the money out the door to the schools." Gov. Granholm made it clear in the 2007 budget stalemate that the state would not default on its bond payments. The Republicans, who controlled the Senate at the time were really upset about that. But the governor's approach then was basically, "Sue me if you have a problem with this."
So the question is —- if a shutdown were to occur — is this going to be like 2007 and 2009, where the state's faced with the real prospect of ceasing many of its service functions? Does that suddenly cause everybody to get it together and get a budget through, or at least a continuation budget through? Or do the House Republicans potentially really dig in here and see an opportunity to try to inflict the kind of spending cuts that the governor and Senate Democrats wouldn't otherwise support.
DT: Zach, I know you have kids, I do, too. School’s about to start for many Michigan kids. And public school districts don’t know how much money they will have in this year’s budget because their fiscal year started on July 1. I looked this up, Michigan is one of just two states that runs its state government on an October through September fiscal year. 46 states and again, Michigan’s public school districts, run a July 1 to June 30 fiscal year. Has there ever been any push to get everything in Michigan onto the same timeline?
ZG: That is a great question. So guess what? Michigan used to be on a July 1 to June 30 fiscal year for most of its history.
DT: I knew you would know this! [Laughs].
ZG: But in the 1970s — I only know this because of the great staff at Gongwer that preceded me, because I was just a toddler at this time [Laughs] — there were budget crises. And oftentimes when you have revenue shortfalls, one of the solutions is accounting gimmicks because you don't actually have to cut spending and inflict pain. And the accounting gimmick was to move the state's fiscal year.
Don't ask me to explain the finer points of why this helped balance the budget, but the bottom line is it helped the state get through that fiscal year. But most of the fiscal experts, when we ask them about this, say to try to go back to a July 1 fiscal year would be a massive fiscal hassle. The reason has always been: you can't un-ring the bell.
DT: [Laughs] Before I let you go, with Republicans saying they will roll out their budget in the coming week, do you think that's a sign that we will get to a final agreement before that shutdown deadline at the end of September?
ZG: I think it will help. The 2009 shutdown — I covered it, I was there — I believe, in large part, occurred because the House Democratic majority at the time refused to pass a budget of its own. Another problem at the time was Gov. Granholm did not offer a revised recommendation of her own to reflect a huge decline in revenues. So I do think if the House Republicans do pass a budget of their own, it will at least say, okay, we know where the Senate Democrats stand. We know where Governor Whitmer stands. And now we know where the House Republicans stand.
And, in the end, these are numbers. So, you can usually find a place somewhere in the middle. It's not like policy where sometimes it's an all-or-nothing situation. I do think if they can get a budget out there, it likely sets the stage to get something done. But it it does really feel like this is going to be a total game of brinksmanship going down to the wire.
