Michigan budget deadline intended to avoid government shutdowns

Michigan now has a legal mandate that a state budget bill be in place by July 1. The three-month cushion is intended to stop government from closing down.

Michigan state government was within hours of a shutdown on Oct. 1, but a bill signed into law Dec. 20 gives state leaders three months to iron out differences and avoid future crises.

Michigan government stopped functioning briefly in 2007 and again in 2009 because state leaders failed to agree on a new budget before the new fiscal years started on Oct. 1. It was within hours of happening again this year until Gov. Gretchen Whitmer signed the fiscal year 2020 budget.

But there was a problem: The first-year Democratic governor was in a dispute with Republican lawmakers over road funding and used her line-item veto authority to make 147 changes totaling a record $947 million. She transferred another $625 million within state departments, including $375 million in general fund spending earmarked for road and bridge repair.

Whitmer said the moves were to force more budget talks as she tried to push her agenda, including her campaign rally to “fix the damn roads.” She said she wanted a comprehensive road funding plan instead of taking general funds away from other priorities.

A deal was made this month that will “fix” about $574 million worth of those vetoes and Whitmer will need to notify lawmakers of future fund transfers. Funding was restored to programs including the Michigan tuition grant, and aid increases for charter schools, summer school literacy interventions, early literacy coaches, isolated school districts, county jail reimbursements, rural hospitals, an autism support program, opioid response programs, secondary road patrols and payments made in lieu of taxes .

Lawmakers now must give the governor appropriation bills by July 1 for the coming fiscal year as a result of House Bill 5177, which passed the both the House and Senate unanimously. Whitmer signed the bill into law Dec. 20 as part of the deal to modify her vetoes and transfers.

The three months is intended to give lawmakers and the governor time to resolve their budget disputes without taking government functions to the brink of halting. When government goes dark, there may be small impacts such as park campgrounds closing or larger impacts such as fewer state police patrols, but the certain impact is added costs to taxpayers.