LANSING — Democratic Gov. Gretchen Whitmer is flexing her political muscle in an ongoing budget fight, using executive powers to reject Republican priorities in hopes of regaining leverage and restarting negotiations.
The first-term governor signed the budget to avert a government shutdown but used line-item vetoes to eliminate the well-known Pure Michigan tourism ad campaign the GOP had funded, cut spending to support rural hospitals, deny charter schools an allowance increase, chop a private college tuition program and slash funding for a county jail reimbursement program.
The vetoes could have a disproportionate impact on rural residents and communities. But Whitmer offered an olive branch to Republican legislators who tend to support charter schools and represent rural parts of the state.
“A line-item veto is not a death knell for any individual item if people get back to the table and negotiate,” the governor told reporters, suggesting she is open to revisiting various veto decisions.
“…They [Republicans] need to get serious. They need to genuinely get to the table to negotiate, and we’re going to talk about the critical functions of government.”
Whitmer on Monday vetoed 147 line items totaling nearly $1 billion from Republican budgets and declared another 72 provisions unenforceable due to constitutional or statutory flaws. On Tuesday, she executed a rare maneuver to bypass the Legislature and shift $625 million within departments.
Whitmer contended the GOP budgets were “fatally flawed,” using $400 million in discretionary funding for a “phony” roads plan that jeopardized support for other critical government programs, including cybersecurity protection, prison operations and tethers used to monitor parolees.
‘The governor is the one who hurt you’
Whitmer’s power play comes three weeks after budget negotiations between her and Republican legislative leaders broke down, with each side blaming the other. The GOP-led Legislature ended up sending her budgets developed without administrative input, itself a rare move.
The governor is expected on Wednesday to propose an alternative plan for spending the $947 million she vetoed but told reporters she is “well aware” that some small-government Republicans may actually prefer the scaled back budget as it stands after her vetoes.
“If they choose to do that, then it’s going to be on them,” she argued. “The consequences of it will be real, and they will be serious. We’re going to do everything we can to mitigate them, but this is the Legislature that took general fund money out of important functions, critical functions of state government so they could have a talking point roads plan.”
But Whitmer’s latest moves have failed to give her significant leverage after she backed down an earlier shutdown threat and agreed to postpone negotiations over a long-term road funding deal, said Republican strategist John Sellek of Harbor Strategic Public Affairs.
“Republican legislators who voted for the budget can stand up and say, ‘I voted yes. The governor is the one who hurt you. Here’s her phone number. Call her and tell her that,’” said Sellek, who worked for former Attorney General Bill Schuette last year in his unsuccessful bid for governor.
While Whitmer stressed an urgent need to negotiate a supplemental spending plan, Senate Majority Leader Mike Shirkey said Tuesday he is in “no rush” to respond to Whitmer’s vetoes or her “extraordinary” move to shift funds. She did so using the State Administrative Board, a panel comprised of her appointees, using a maneuver that a Republican governor, John Engler, pioneered in 1991.
“There is no amount of red pen usage that will result in enough green buttons pushed in the Senate to get my governor what she wants,” Shirkey said in a statement. “The Senate will continue to partner with our colleagues across the aisle and in the House to pass bipartisan policies that benefit all Michiganders. We are in no rush to participate in Gov. Whitmer’s ‘tug of war.’”
Real pain for rural Michigan?
Shirkey has agreed to meet with the governor on Thursday, but her gambit carries significant risk for rural residents, especially if negotiations are slow going.
As Bridge Magazine reported this week, a quarter of Michigan’s rural hospitals are already considered at “high risk” of closing, according to one health care group. Small-town hospitals face tough merger decisions because of dwindling patient numbers, an aging population and competition from larger systems.
Whitmer’s vetoes could exacerbate patient access issues by cutting $34 million in funding for smaller critical access hospitals, $17.5 million to train physicians in medical specialties most needed in underserved communities, $16 million for rural hospitals that are the sole option in their community and nearly $8 million to help rural hospitals hire qualified obstetricians.
The Michigan Health and Hospitals Association is “disappointed” in the governor’s line-item vetoes, the organization said in a statement highlighting Medicaid reimbursement rates that would have increased under the GOP budget and other line item vetoes.
“Combined, these items provide critical funding for vital safety net services and care in Michigan’s most remote areas for Michigan families, including obstetrical services for mothers and babies,” said spokesman John Karasinski. “If these funding levels are not restored, it can have critical negative consequences on the access to care for residents in Michigan.”
Department of Health and Human Services Director Robert Gordon signaled that rural health care funding cuts could be reconsidered and potentially reversed in future negotiations with the GOP-led Legislature.
“If necessary, there will be significant flexibility around addressing those needs on an ongoing basis,” he said Tuesday.
Gordon argued that aggressive budget changes were necessary because the Republican budgets failed to meet other “essential needs” of the department, including funding for disabled children, implementation of new Medicaid work requirement rules and initiatives to address lead and copper exposure in drinking water.
Whitmer used the Administrative Board to address some of those needs by shifting funds within the department, a move that does not require legislative authorization.
The governor used another line-item veto to cut nearly $15 million in funding used to reimburse county jails for housing prison-bound offenders in local facilities, which has been a “valuable program in the past,” according to Michigan Department of Corrections Director Heidi Washington.
“And that’s why we want to get back to the table,” Washington said, again suggesting Whitmer’s veto could be renegotiated.
“That’s why we want to talk about these cuts. And we want to talk about the solutions to the budget that we have in front of us right now.”
Whitmer and Washington contend the GOP corrections budget was built on faulty assumptions about the department’s account balances and would amount to a $48 million cut, forcing the closure of two full prisons and a nearly-completed women’s Vocational Village in Ypsilanti that provides training to inmates.
The governor said GPS tethers “that monitor sex offenders and drunk drivers would go dark by the holidays” under the GOP budget, which she called a threat to public safety.
Whitmer also vetoed $38 million for a Michigan Tuition Grant program that uses federal welfare money to support students at private colleges, which has long been a popular spending item for Republican lawmakers.
Whitmer also vetoed $35 million in funding for charter schools, denying them the same sort of per-pupil foundation allowance that traditional public schools will see under the finalized budget.
Dan Quisenberry, president of the Michigan Association of Public School Academies, called the veto a misguided political gesture that could hurt charter school students.
“Obviously, someone thought charter public school students were a way to get attention of the elected officials,” he said after Whitmer detailed her budget moves in a morning press conference.
“We don’t feel like kids are political pawns. We’d like this fixed.”
Whitmer ‘showed some spine’
The Pure Michigan ad campaign eliminated under a $37.5 million line-item veto has been used to promote tourism destinations across the state but often focuses on popular destinations in northern parts of the state that tend to be more rural.
Whitmer called Pure Michigan “a fantastic ad campaign” that “gives us all pride” and was funded in the executive budget she proposed in March.
But she argued Republican budgets had jeopardized “core functions” of state government by using $400 million in general fund dollars as a one-time fix for Michigan’s crumbling roads, as opposed to the kind of long-term plan Whitmer had proposed through a $2.5 billion fuel tax hike that flopped in the Legislature.
“I don’t relish using all of these powers, but I’m not afraid to use them either,” Whitmer said. “And at the end of the day, I’m always going to put public safety — like the tethers we need in the state police budget — ahead of any ad campaign.”
Whitmer also vetoed $600,000 in spending for traffic control at the Michigan International Speedway in Brooklyn and $27 million in payments the state traditionally makes to rural communities in lieu of paying property taxes on state-owned land, including forests and swamps.
State Rep. Jim Lower, R-Greenville, said some of Whitmer’s vetoes seem “mean-spirited” and ill-advised. He argued the governor’s original gas tax proposal would already have favored urban areas.
“So the whole budget as proposed and now is implemented, is focused on urban areas at the expense of rural, probably because rural areas tend to be more Republican and she knows that those are the areas that the majority of the legislature cares about,” Lower said. “So I think it's a negotiating tactic that's not going to go over well at all."
Whitmer showed “some spine” by rejecting large portions of the GOP budget and drew some “bright lines that may give her some leverage” moving forward, said TJ Bucholz, a Democratic strategist with Vanguard Public Affairs in Lansing.
The moves left the state in “uncharted territory” as its leaders try to negotiate the fiscal year 2020 budget within the fiscal year, which began Tuesday, he said.
“The interesting part here is what happens next,” Bucholz added. “I’m worried about further partisan entrenchment. This process certainly does not engender good feelings.”