Michigan legislators have not found much to agree about this year. And the Democrats with a majority in the Senate are blaming the Republicans with a majority in the House over the one thing they need to do: pass a budget.
Yet it is unclear what they are arguing about, outside of a handful of issues.
One critique has been that the House budget “would make devastating cuts to education,” as Senate Appropriations Committee Chair Sarah Anthony said. The House budget spends more on education than the Senate budget. The House budget also gives schools more money to spend on their highest priorities rather than tying payments to the things that legislators want.
Another dispute is about whether the budget will include more money for road repair. Gov. Gretchen Whitmer has asked Senate Democrats to find more road money in the budget. “There’s only two people who’ve had the guts and brains to put a plan out,” she said, referring to herself and Michigan House Speaker Matt Hall.
Lawmakers have spent a lot more on district grants over the past three years than they used to, though this may change. House Republicans now mandate a process where legislators submit earmark requests before they become part of the state budget. Previously, legislators added these grants to the budget at the last minute. Whether the budget will include billions of spending on pork projects may be another subject of dispute between budget negotiators.
Whether legislators will restrain themselves from spending every dollar they have available to them is another question. The state constitution allows legislators to spend only as much as they expect in revenue plus anything that they’ve saved in the past.
Revenue has increased, so state spending has also gone up. Excluding federal revenue and the small amounts of local government and private money available to it, the state budget has increased from $34.4 billion in FY 2018-19 to $46.8 billion in the current fiscal year, an 8.4% increase when adjusted for inflation.
Legislators should try to spend less than all the revenue they have. Restraint can allow for tax cuts, focus legislators only on spending increases that most benefit the public, and ensure that the state has resources available to pay for unexpected needs. That’s why we recommend that legislators adopt a Sustainable Michigan Budget and increase spending by no more than 3.6%. The version of the budget passed by the Senate increases spending by 4.9%, and the House has not approved all its budget bills, making it impossible to compare the two chambers’ spending plans.
Lawmakers still have two months to figure out where they stand on issues like restraint, roads, district grants, and whether education funding should focus on students or activities. And whatever other points of dispute they have as they try to get enough votes to enact the budget. State policies would be better policy if lawmakers decided to go with restraint, fewer pork projects, more road funding, and more use of per-pupil funding and less of special grants based on programs. Divided government, however, tends to mean that lawmakers meet in the middle over points of contention.
