Michigan budget negotiations break down (again) over short-term road funding

Negotiations over the state budget broke down once again this week and both Democratic Gov. Gretchen Whitmer and GOP leaders blamed each other for holding up an agreement before an Oct. 1 deadline to pass a state budget.

At the center of the disagreement is, as ever, road funding. 

Whitmer is seeking an additional $2.5 billion a year that experts agree is what’s needed to fix Michigan’s roads and bridges. Republicans agree more money should be dedicated to roads, but have roundly rejected Whitmer’s preferred plan of a 45-cent-per-gallon gas tax hike and, Whitmer says, haven’t offered alternative plans that would generate $2.5 billion. 

The two sides recently decided to table differences over roads as they try to reach accord on the rest of the budget. In the latest dramatic turn, Republican Senate Majority Leader Mike Shirkey accused the governor of walking away from negotiations Wednesday afternoon “over [Whitmer] wanting less money to fix the roads,” a reference to Whitmer’s refusal to sign on to a $500 million stopgap increase in road funding. 

Whitmer called that accusation “hysterical” given her insistence on $2.5 billion in new revenue for infrastructure repairs.

The $500 million in additional funding for roads comes from savings elsewhere in the budget, Shirkey told reporters, not from new taxes or fees. Speaking to reporters Thursday, Shirkey said Whitmer offered “a very, very low number” in return, GOP leaders made a counteroffer, and then “crickets” from the governor. 

Whitmer told reporters Thursday that Republican leaders offered $300 million raised by “unnamed taxes” and argued that a one-time funding proposal only makes road fixes more expensive later because it prevents adequate planning. 

“They never came to the table with a serious intention of fixing the roads,” Whitmer said of her private negotiations with Shirkey and GOP House Speaker Lee Chatfield. “And that’s why we had to take roads out of the conversation, which they agreed to, and then an hour later, they say they want one-time money for roads. A pittance of what we really need.”

Shirkey countered that he is “very committed to a long-term road funding plan” and that Republicans’ proposal to dedicate $500 million to roads does not preclude a long-term deal brokered after the budget passes. 

“The agreement between us was we would stop talking about long-term sustainable road funding,” he said. “We never ever contemplated or agreed to not having to continue to have one-time funding.”

Chatfield told reporters Thursday the state should “without a question” create a long-term fund dedicated to roads, though he did not say whether he believes new revenue will be necessary. In the meantime, “I think our roads need every single dollar that we can afford to put towards them,” he said.

Senate Democratic Leader Jim Ananich said agreeing to a one-time road funding deal will make it more challenging to get an adequate long-term deal.

“No question about it,” Ananich said. “It puts a bandaid on a broken leg.”

Shirkey and Chatfield have pledged to forge ahead with hearings this week that will move an official budget plan forward without the governor’s input. 

“They’ve got to do what they’ve got to do, and then I’m going to do what I’ve got to do,” Whitmer said. 

Is that an indication she plans to veto whatever plan they come up with? “We’ll see,” Whitmer said.  

She said her response will depend on whether the budget the Republican-led Legislature comes up with also has adequate funding for schools and helps close the state’s job skills gap, two other Whitmer priorities. 

The Republican budget plan will include $400 million more for schools, $120 million more for drinking water protections and funding for 85 more state troopers, Shirkey said Wednesday. 

Lawmakers in the House and Senate met today to discuss budget proposals for several state departments and complete a second round of hearings next Thursday — all, for now, without Whitmer’s input. Any agreements found in the hearings will then receive a vote in each chamber before being sent to the governor’s desk.