Michigan Republicans push budget without road deal, a likely no-go for Whitmer

Shirkey

Senate Majority Leader Mike Shirkey, pictured here at the Mackinac Policy Conference in May, said the plan he and Speaker of the House Lee Chatfield, a fellow Republican, have agreed upon includes more funding for roads, schools, public safety and clean water programs. (Bridge photo by Riley Beggin)

Update: 

Republican leaders controlling the Michigan House and Senate have agreed on a budget, they announced Friday ‒ one that doesn’t include a negotiated deal on road funding with the state’s Democratic governor. The announcement raises the stakes for a possible state government shutdown in less than a month.

Gov. Gretchen Whitmer has promised she will veto any budget that does not include a mechanism for raising $2.5 billion in new funding for the state’s crumbling infrastructure. She said last week that plans offered by GOP leaders Mike Shirkey in the Senate and Lee Chatfield in the House were not “viable.” 

However, the state needs a budget passed by the legislature and approved by the governor before the next fiscal year begins Oct. 1 or the government will shut down for the first time in a decade. 

The Republican leaders’ move to begin budget hearings indicates they may plan to test whether Whitmer will follow through on her veto promise in a time of divided state government after eight years of GOP rule in Lansing. 

“Discussions on roads with my governor and legislative leaders can continue, but the Senate will not tie the fate of the budget to a deal on roads,” Shirkey, the Senate Majority Leader, said in a statement. “We can no longer keep our schools and municipalities waiting while my governor rejects road proposals.”

Whitmer spokespeople said in a statement Friday that the Republicans' choice to move forward with the budget process constitutes "games" that "are leading the state toward a Trump-style shutdown." 

"The governor remains committed to working with anyone who wants to work with her on real solutions to get the budget done," the statement said.

The budget Shirkey and Chatfield agreed upon will include more general fund revenue dedicated to roads, schools, public safety and clean water efforts, Shirkey said in the statement. While the statement did not go into detail, the Republican leaders in the recent past have differed on whether they are willing to consider raising new revenue (taxes) to meet the state’s fiscal challenges. Shirkey has allowed that some new revenue is likely necessary, while Chatfield has sought to squeeze dollars from other corners of the state budget before any consideration of raising taxes or fees.  

Rep. Shane Hernandez, Republican chair of the House Appropriations Committee, said in a separate statement that additional revenue to fund roads and schools will not come from tax increases. A source close to the process said the legislature is likely to come up with an infrastructure funding plan separately from the budget. 

"The Legislature is taking action to give Michigan students, families and workers the budget they deserve before it's too late," said Gideon D'Assandro, spokesman for Chatfield. "Governor Whitmer is the only one talking about a government shutdown right now as she continues to hold the budget hostage over her extreme gas tax agenda."

Whitmer proposed a 45-cent-per-gallon increase in the state’s gasoline tax during her budget presentation in March, which would be constitutionally required to go to roads and would raise an additional $2.5 billion annually deemed necessary to bring the state’s crumbling infrastructure up to par. It would make Michigan’s fuel tax the highest in the nation. 

Republicans have adamantly opposed it. The three leaders have met privately over the summer to hash out differences, but Whitmer said Shirkey and Chatfield have failed to present a counterproposal that raises “anywhere in the range” of $2.5 billion. The GOP leaders respond that they’ve presented four solutions to fund roads and Whitmer has refused them all.

“We would welcome input from the administration should my governor choose to present budget options that are not dependent upon her 45 cent tax increase,” Shirkey said.  

Neither Whitmer, Shirkey or Chatfield will disclose what the GOP proposals have been, though last week Shirkey suggested Whitmer reconsider a West Michigan Policy Forum proposal of issuing a 30-year, $10 billion bond to fund the teacher pension system. Backers of the proposal argue it would free up as much as $900 million annually to replace lost sales tax revenue (which would go to schools and local government) under a House proposal that would eliminate the state’s 6 percent sales tax on gasoline. 

Democrats have opposed that plan. Whitmer said last week they’re “fiscally bad ideas and taking money out of education to fill potholes is not a real solution.” A group of six House Democrats also released a statement Friday opposing the teacher pension bond idea; Rep. Julie Brixie, D-Meridian Township, said it was a “fiscally reckless gamble” that’s “fraught with financial peril.”

Meanwhile, House Democratic Leader Christine Greig said last week that Whitmer’s proposal is likely dead. Because Republican leaders have rejected it, it’s time to start looking at other options, she said. 

Greig said one solution may be taxing heavy trucks so they pay an extra cent per mile driven, which she estimated would raise an additional $400 million for roads. She also said closing “corporate tax loopholes” could raise up to $500 million. Those proposals combined with a smaller gas tax increase could close the gap for necessary road repair funding, she said. 

“We have a pathway to lower the 45 cents” tax proposal, Greig said. “But the important thing is we have to raise $2.5 billion in new revenue to fix the roads.” 

Greig, like Whitmer, said she opposes advancing a budget without a bipartisan road funding plan. “To suggest that we move a budget that does not deal with our roads — because (Republicans) let the clock run out on their watch — is absurd,” she said in a statement last week. 

The first joint committee hearings are scheduled to take place Thursday afternoon and will cover budgets for the Michigan State Police; Department of Natural Resources; Department of Environment, Great Lakes and Energy; community colleges; higher education and school aid.

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Comments

Yoop
Fri, 09/06/2019 - 1:14pm

What about raising the state sales tax? Estimates are that a penny increase to 7 cents would bring in an estimated $1.4 billion, while the rest of the amount needed would be raised in other ways, such as a more modest gas tax (less than the earlier proposed 45 cents/gallon). Michigan's 6-cent sales tax has been in effect for a long time, and 14 other states already charge more than Michigan does -- even if their roads are not in as bad shape as ours.

Jim tomlinson
Fri, 09/06/2019 - 3:27pm

Your suggestion is reasonable. But i think we all fail to understand the depth of republican corruption. They do not and have not governed for the public since milliken. They govern for shadowy special interests the public can’t fathom. It appears they have absolutely no intention of fixing roads, improving schools or elevating public services but rather sending ever more public revenues into private hands. Mack center zealots. Ayn rand sheep

Don
Fri, 09/06/2019 - 6:11pm

WOW!! are you ever right,,, Just look at what GrandMOLD did she gave Carlo road constrution 8 years of road money before she AND Carlo left MI!!! Get the money BACK before any new taxes WITCH the people of MI have to vote for or against<<<

Arjay
Fri, 09/06/2019 - 7:15pm

Thank you republicans for protecting me, a retiree with no pension, from paying increased taxes. I am not a shadowy special interest, nor does extra public revenue fall into my hands. I just want to stay where I am and not pay more to have it be dumped into projects it was not intended for.

Matt
Sat, 09/07/2019 - 8:15am

Really Jim, exactly what "shadowy groups" are you talking about? Do you mean the public who doesn't want anything to do with your 45 cent gas tax? But not the shadowy groups (which stand a great deal to gain from it!) that are pushing this idea that we no alternatives other than giving them 2.5 billion dollars? Once again your side can quit their clucking and by-pass the undemocratic Republican state legislature by putting up a ballot question to hit us with your .45 gallon tax, go for it!!!

Glenn
Fri, 09/06/2019 - 3:30pm

Why can't the state issue a bond to fix the roads and leave the pension out of it? I've not seen an explanation of why that cannot be done. If there is a reason, then it should be explained. The pension system must not be a part of the road solution. Pensioners already took a hit when the Snyder administration reneged on a decades-long promise that pensions would not be taxed.

Matt
Sat, 09/07/2019 - 8:22am

Interest rates are at historic lows to boot! But remember the construction industry currently suffers from an extreme labor shortage and tight supply markets, dumping that much money into this market in big shots doesn't end up well. It took many years to get here and will take many to work out of it.

Don
Fri, 09/06/2019 - 6:08pm

WHY are moterest being forced to pay for bicycle. Lanes???

Matt
Mon, 09/09/2019 - 7:44am

Finally a good question. Because that's where the money is!

Duh
Mon, 09/09/2019 - 9:15am

Because cars and truck damage the roads and have done so since they were built. Bike lanes are new.

James Roberts
Fri, 09/06/2019 - 6:24pm

Uh, the suggestion to raise the sales tax another 1% is reasonable? Gee I guess we voters didn't think so four years ago when we voted it down 3 to 1. Who are these people talking to so they think anything would be different this time? but if you like please go ahead and put it or this insane 45 cent tax increase on the ballot again and see what happens.

Gary Lea
Fri, 09/06/2019 - 7:31pm

Standard republican tactic...sit on one's thumbs.

Scott Roelofs
Fri, 09/06/2019 - 9:06pm

The governor is in the wrong here. She is saying in effect, 'extract $2.5 billion more from the citizens, or I'll shut down the government'. Go ahead, shut it down if that's what Whitmer wants. The legislature has a reasonable budget presented. Whitmer has shown no desire to back away from her destructive $0.45 per gallon gas tax. The public has said emphatically "no". I see no leadership from this new governor, and wonder why she ran for position if she doesn't want to lead.

m. curran
Fri, 09/06/2019 - 10:15pm

What is it with the Republicans? Still drinking the taxes-are-bad Koolade. Ten years of a GOP legislature and now we all have to pay the piper which is what we should have been doing all those 10 years. Now we have to catch up which means raising new revenue. Societies get better when they invest in public goods (schools, roads and public transport, libraries, public safety, etc.). These are public goods we need badly. Don't we all know that you can't get something for nothing?

Matt
Sun, 09/08/2019 - 9:18am

Really M?? Where do you want to start with the costly and destructive public initiatives that had no payback? The list is long and goes back decades, centuries?,.

Disagree
Mon, 09/09/2019 - 9:19am

Start with the New Deal, then make it a Green New Deal. We're still reaping the benefits of the original New Deal.

Big boy Bob
Sat, 09/07/2019 - 6:38pm

Why can’t the state tax the local billionaire families, devos and meijer? They could easily come up with 2.5 billion for decades to come!

Matt
Mon, 09/09/2019 - 7:47am

Yep more of the same old stuff, I want, I want , I want and want someone else to pay for it!

John Konicki
Sun, 09/08/2019 - 10:33am

If a lockbox was put on the 45cent gas tax so it only went for road work it may garner support. As it stands the money could go in the general fund. Part of Whitmers plan is to re-allocate where the money goes and is not fair to communitys in northern Michigan.

sammelvin
Sun, 09/08/2019 - 11:35am

Sunday April 8, 2001 ,.... The Detroit NEWS...
Governor Engler raised
the Road & bridge in 1990......$ 328 milloin
'''''''''''''''''''''''''''''''''''''''''2001.......$ 1.54 BILLOIN a 369% increase.......open the books now.

sammelvin
Sun, 09/08/2019 - 11:37am

Sunday April 8, 2001 ,.... The Detroit NEWS...
Governor Engler raised
the Road & bridge in 1990......$ 328 milloin
'''''''''''''''''''''''''''''''''''''''''2001.......$ 1.54 BILLOIN a 369% increase.......open the books now.

Jennifer
Sun, 09/08/2019 - 6:09pm

The biggest problem I see here is Democrats are not listening to the people who elect them. Republicans are. The people have said we are not in favor of paying a $.45 gas tax. We're already paying for increases at S.O.S. to partially pay for the roads. That money is miraculously missing. Michigan government needs to trim its fat to pay for roads. The people have to operate on a fiscally responsible budget. Why isn't the government? The people already paid as much as they're willing to for the roads.

Hence
Mon, 09/09/2019 - 9:22am

The Republicants are doing NOTHING, offering NOTHING, as they did when they had complete control for a decade, MORE NOTHING, just tax cuts for the rich, pet projects for corrupt friends.

Tim
Mon, 09/09/2019 - 7:54am

I am amazed at how many people are just willing to give up more of their money in higher taxes. We need to ensure the money we pay now is used well before even thinking about paying another cent. And I can assure you, it is not used well. Sure, it seems like the simplest fix is to throw more cash at the problem, but that only works if it is administered properly.
I also caution people from believing Whitmer when she says she is willing to work with anyone who is willing to work with her on real solutions. That was the same line she spewed with auto no-fault reform, right before she, Shirkey, and Chatfield went behind closed doors and brokered a "deal". A deal that will soon have drivers paying more for insurance, getting way less coverage, and pushing thousands more to Medicaid every year.
Oh well...we can just keep throwing money at our problems and hope the government gets it right this time. Its certainly easier than holding anyone accountable.

Why?
Mon, 09/09/2019 - 9:27am

Why were all the GOP proposals too secretive to disclose with their constituents? What did the GOP propose? Watch Off the Record from last Friday. The Michigan GOP leadership(?) refused to say what it was asking the governor to do. It's very paternalistic. The governor knew her proposal would not be accepted, but she was disrespected by the GOP that refused to negotiate.

Jennifer
Mon, 09/09/2019 - 12:37pm

Have you ever had At-fault insurance Tim? I have. 8 years of it. Full coverage for $80 a month. Here in Michigan, my 2002 Envoy can have full coverage for no less than $350 a month. My husband and I have flawless driving records and no accidents. With At-fault insurance the premiums are far less expensive. As with any At-fault state, if you want more benefits you must pay for them. Saving money on things we must have, like auto insurance, frees up money to pay for extra coverage or whatever else that money is needed for. Food, electric, gas bills, car repairs. Heck, even a car payment would be more achievable to afford. It may even help many who now receive state assistance be able to stand on their own financially without taxpayer's help. It's a win for Michiganders all around.

Exhausted
Mon, 09/09/2019 - 9:11am

Please tell all your friends that elections have consequences, bad consequences when Republicans win. We need campaign finance reform and to stop gerrymandering.

PLEASE TELL EVERYONE WHO CARES ABOUT FAMILIES OVER CORRUPT LOBBYISTS TO VOTE AND VOTE FOR DEMOCRATS, ALL THE TIME, NOT JUST EVERY FOUR YEARS!!!!