Whitmer signs budgets, blocks road aid boost as part of $947M in line-item vetoes

Lansing — Gov. Gretchen Whitmer signed 16 appropriations bills late Monday, blocking a GOP effort to boost road aid by $400 million and reversing more than $500 million in Republican-inspired cuts to her spending plan at a Tuesday meeting.

In total, Whitmer's more than 147 line item vetoes amount to $947 million of the $59.9 billion spending plan adopted by the state Legislature last week without reaching prior consensus with the governor.

In a statement released Monday, the governor accounted for about $503 million of the vetoes, but would not provide further details on the $444 million in cuts that are likely to be specified during a rare administrative board hearing scheduled for Tuesday morning. The Republican House Appropriations chairman called it a "power grab" that sought to sidestep legislators "elected to be the voice of the people."

"She’s more interested in playing politics than working with the Legislature, and the people of Michigan deserve better," said Rep. Shane Hernandez, R-Port Huron.

Whitmer’s budget vetoes were the most notable since 2009, when then-Gov. Jennifer Granholm trimmed $127 million from a proposed budget following a four-hour partial government shutdown.

"The Legislature is broken," Whitmer said in a statement Monday, berating the chambers for sending her budgets without what she considered enough money for schools, communities or roads. 

“While line-item vetoes can only clean up so much of this mess, additional steps will be needed to protect Michiganders, protect access to health care, and help close the skills gap, and it will take Republicans and Democrats working together to get it done," she said. 

Republican legislative leaders argued they were setting different priorities so they could free another $400 million in one-time money for the repair of the state's crumbling roads and bridges. But Whitmer has argued she prefers a longer-term solution that includes her proposed 45-cents-per-gallon fuel tax increase.

The budget impasse was a result of the governor's decision to "play political games and walk away from negotiations," House Speaker Lee Chatfield said in a Monday statement, adding that the ploy wasted time and "manufactured" a crisis.

"I hope it was worth it," the Levering Republican said. "Now that her shutdown threat has been shown to be nothing more than empty words, the cameras will stop rolling and the headlines will move on. Hopefully that means she will finally accept our invitation to come back to the negotiating table and get back to work.”

The GOP budget bills proposed $59.9 billion in total spending, slightly less than the $60.2 billion spending plan Whitmer introduced but 2.8% more than current year spending.

Senate Republicans noted on Twitter that the millions of dollars in road funding Whitmer vetoed had been strategically allocated to bridges she visited and called a "life and death" situation. 

"Tonight, she vetoed $375 million to fix those bridges," the caucus wrote.

The Legislature will maintain control of that vetoed spending, but that doesn't decrease the drama of Whitmer's Monday announcement less than five hours before a midnight deadline, said Bill Ballenger, a former GOP state legislator and longtime Michigan political analyst.

"There’s never been anything like this," said Ballenger, who writes "The Ballenger Report" newsletter in Lansing. "No governor has issued this many vetoes, worth this many dollars.”

The trimmings

The governor's line-item vetoes included $375 million in one-time road funding by GOP legislative leaders and more than $128 million to the school aid budget, a spending plan that gained support from Democratic lawmakers in the House. 

The $128 million cut from the $15.2 billion school aid budget included "legislative pork barrel spending" that delivers classroom dollars to commercial vendors, Whitmer said. 

She also listed the various cuts legislators made to the governor's recommendations in different budgets, perhaps signaling which reductions she would seek to reverse at the Tuesday. 

Among the proposed cuts were $185 million in the K-12 budget for special education, at-risk students, career and technical education students and early learning opportunities; $61.5 million for hydration stations in schools; $48 million for the Department of Corrections, $53 million to the Department of Technology Management and Budget; and $33 million to the Department of Health and Human Services. 

“The Republican budgets were a complete mess, and today I used my executive powers to clean them up to protect Michiganders,” Whitmer said. 

In prioritizing $400 million more for roads, the GOP-led Legislature used a combination of year-to-year growth for the Department of Transportation, pruned line items and unused work project funds from various departments, Hernandez said last week.

The unused work project funds were some of the savings with which the Department of Corrections and Whitmer took issue, questioning the legality of such a transfer let alone its effect on major prison education programs. 

Though the Republican-sponsored plan for the school aid budget didn’t include the same funding levels for special student populations as Whitmer’s did, the GOP proposal garnered House Democratic support by adding $30 million for special education students and clawing back certain performance measures.

Key parts of the Legislature's budget plan include $15.2 billion for K-12 education, $5.3 billion for roads and $5.2 billion for general government. 

The transportation budget has garnered the limelight throughout negotiations in a tug of war between Whitmer's proposed 171% hike in the 26.3-cents-per-gallon fuel tax and the Legislature's adopted $5.3 billion budget that included $400 million in one-time additional funding for roads. 

Both sides had agreed to work on a long-term solution for roads after the budget is in place, but annual budget talks broke down earlier this month over the Legislature's insistence on adding $400 million in one-time general fund money. 

Early Monday, Senate Majority Leader Mike Shirkey reiterated his commitment to long-term road funding plans on WJR-AM 760, but he also predicted Whitmer would use "a very busy red pen" on the existing budget. Many line-item vetoes would go into a "supplemental bucket" that could bring all parties back to the negotiating table, he said. 

Shirkey's statement is a reminder that the line item vetoes aren't the end of the road for Republicans' spending priorities, Ballenger said.

"We’ll have to see where it goes from here,” he said. "But remember, Republicans are still going to have control of the Senate all the way through Whitmer’s first term." 

Administrative board transfer

Ahead of the appropriation bill signings, the State Administrative Board gave notice of a Tuesday special meeting where the governor will use an administrative board transfer to move spending priorities within budgets as she sees fit. 

Usually used to approve state contracts and leases, the board was used by Republican former Gov. John Engler in the early 1990s to transfer funds within a department budget.

It was promptly challenged in court by Democratic legislators. The Michigan Supreme Court eventually ruled it was a legal option, but not before Engler reached budget compromises with Democrats. The transfer option has not been used since.

Board members who would consider the transfers include Whitmer, Lt. Gov. Garlin Gilchrist, Secretary of State Jocelyn Benson, Attorney General Dana Nessel, state Treasurer Rachael Eubanks, state Superintendent Michael Rice and Michigan Department of Transportation Director Paul Ajegba. Nessel and Benson are Democratic allies of Whitmer.

It's unclear which items Whitmer would prioritize with the administrative board transfer, but the number and nature of the transfers are likely to be unprecedented, said Dave Dulio, a political science professor and director of Oakland University's Center for Civic Engagement.

"Clearly, it’s a legitimate step, a legal step, as the Michigan Supreme Court has stated, but I think it’s a bigger move in the use of this tool than we’ve seen before," Dulio said. 

"There are just as many questions now that the budget’s done as there were a couple days ago," he added. "There might be different questions but there are just as many.”

The 1993 high court ruling establishing administrative board transfer as a legal option stemmed from Engler's call in 1991 for the administrative board to make 11 fund transfers within departments — a demand that followed three failed attempts by the budget office to convince the House Appropriations Committee to approve intra-departmental fund transfer requests needed to address a budget deficit, according to the 1993 opinion.

All but one of those 11 fund transfers were resolved through negotiations prior to the 1993 Supreme Court ruling.

In a 4-3 decision, the High Court found that the State Administrative Board's authority to transfer appropriated funds “within and between departments” was limited by a 1931 amendment, but only when it came to transfers between departments, according to the opinion. Subsequent legislative action concerning the board in 1976 and 1984 did not appear to repeal the power to transfer funds within a department, the court ruled.

“It appears that the Legislature considered the authority to transfer funds within departments as necessarily correlative to the board’s function of supervising those departments,” the opinion said.

Engler told The Detroit News on Monday that the transfer was an little known alternative discovered during a time of divided government. 

He attributed the maneuver's success in court to a "very good legal team" —  including Democratic former Attorney General Frank Kelley — that scoured the Michigan Constitution to better understand the executive's authority. 

"We really tried to study and understand what our options were and that certainly wasn’t just the structure of the government but also the fiscal aspect," said Engler, who assumed the board's transfer function was put in place in the event of a part-time legislature. 

"Several states don’t have legislators who are in session year round," he said.

The 1993 ruling said the administrative board was created "in an effort to promote the efficiency of state government."

eleblanc@detroitnews.com