Michigan schools sweat as deadline looms without state budget: It’s ‘super frustrating’

The Michigan House, Senate cancel session amid state budget negotiations, Wednesday deadline
Whitmer spokesperson casts doubt on deadline. ‘We were hopeful,’ he said.
July 1 deadline intended to provide certainty to school districts finalizing their own budgets this week

LANSING — With just two days left to pass a budget before a legal deadline designed to give certainty to Michigan schools, lawmakers and Gov. Gretchen Whitmer on Monday were still trying to finalize what could be a roughly $80 billion state budget.

While all sides signed off on a budget “framework” and spending targets for state departments last week, it’s not clear if they’ll agree to all details by Wednesday, which would be a blow to schools that are crafting their own yearly spending plans without any funding certainty from the state.

A Whitmer spokesperson on Monday appeared to cast doubt on the prospects of meeting that deadline after the House unexpectedly canceled its planned Tuesday session, prompting the state Senate to do the same.

“We were hopeful the legislature would pass a balanced, bipartisan budget by the July 1 deadline,” Whitmer Communications Director Bobby Leddy said in a statement. “However, we understand the House won’t be in session tomorrow.”

The administration is working to finalize a budget that “continues tax cuts for working families and retirees, invests in public education, protects health care, and strengthens public safety, so that it’s ready for a vote when members return,” Leddy added.

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Details of any potential deal have been sparse.

House Republicans have said the framework deal does not raise taxes or tap into the state’s “rainy day” savings fund, as proposed by Whitmer. They’ve also said they expect the final budget to be smaller than the current $81 billion version.

“Conversations are ongoing and have been productive,” Rosie Jones, spokesperson for Democratic Senate Majority Leader Winnie Brinks, said in a text message Monday afternoon, before both chambers canceled Tuesday sessions.

A statement from the State Budget Office struck a similar tone: “We continue to make progress on a budget that saves Michigander’s money, invests in public education, and protects health care. We look forward to a vote as soon as possible.”

The decision by House Republicans to cancel Tuesday’s session was a matter of timing, said Rep. John Roth, who partially oversees the state health department budget.

Most of Tuesday will be spent uploading various departmental budgets to the state’s website, which he said takes a significant amount of time, so lawmakers wouldn’t be in a position to vote until Wednesday anyway.

“A lot of (budget) work was done right through the weekend until morning — this morning,” Roth, R-Interlochen, told Bridge Michigan.

School groups anxious, frustrated

Michigan lawmakers wrote the July 1 budget deadline into state law after a 2019 impasse, though there is no penalty for missing it — as they did last year by a wide margin.

It’s a big deal for schools, however. They rely heavily on per-pupil funding from the state and generally have to finalize their own budgets by June 30, which is Tuesday.

No voting in the House or Senate on Tuesday means the state budget will not be done before then.

“This is a failure of leadership. Full stop,” a coalition representing school districts, administrators and principals said Monday.

Alpena Public Schools Superintendent Dave Rabbideau called the process Friday “super frustrating.”

Last year, Michigan officials didn’t just miss the July 1 deadline. They also missed a constitutional deadline to have a balanced budget in place by Oct. 1 but passed a stopgap spending measure to avoid a state government shutdown.

Some schools had warned they were preparing to stop universal free lunches before Whitmer and lawmakers finalized a budget Oct. 3.

There are “real consequences” to missing this week’s deadline for schools, potentially forcing them to leave positions unfilled, said Robert McCann, executive director of the K-12 Alliance of Michigan, a group of 123 school districts.

Traverse City Area Public Schools Superintendent John VanWagoner told Bridge he wants to hire a special education teacher and a few elementary school teachers but it’s “always nerve-racking” to do so without clear state budget certainty.

“We really want to get the education budget, no question about it,” Roth, the state House Republican from Interlochen, told Bridge on Monday. “We do not want to do the same thing as last year.”

Where things stand

Last week, Republican House Speaker Matt Hall told reporters he, Whitmer and Brinks had privately agreed to “a smaller budget than last year” with no tax increases and no withdrawals from the state’s budget stabilization fund.

Hall referred to those positions as “major lines in the sand that I drew,” but he stopped short of offering further details on what a final budget document could look like, citing confidentiality.

“I’m hopeful that we’ll get a deal,” Hall, R-Richland Township, said on June 23. “There’s still a chance that we can get this thing at least through the House and Senate and to the governor by July 1.”

Talks have continued.

On Saturday, lawmakers were at the Capitol until 4 a.m. negotiating the Department of Health and Human Services budget, Roth said on Facebook.

In a Monday phone conversation with Bridge, Roth said that department’s final budget will look “pretty close” to what House Republicans initially proposed in April but did not specify a final dollar amount.

The annual budget process began in February when Whitmer pitched an $88 billion budget proposal.

The Democratic-led Senate passed one of equal size in April, but without nearly $800 million in “sin taxes” Whitmer had requested in order to bolster Medicaid amid federal cuts. That same month, House Republicans approved their own $78 billion budget, which proposed cuts across a broad swath of state government and would have reduced funding in nearly every department.

Some type of school funding increase is expected: The House, Senate and governor all included an increase to the state’s per-pupil allowance, from $10,050 a student to $10,300.

Universal free school meals are also likely to continue for public schools, though the governor’s office has proposed eliminating funding for private schools to participate.

What’s unclear, however, is the role tax reform will play in a final budget.

Whitmer previously proposed a 10% property tax refund program for seniors aged 65-and-older in her state budget outline, which would cost the state an estimated $90 million a year.

House Republicans want much larger property tax cuts. In May, they approved a massive $4.7 billion property tax overhaul plan to repeal a personal property tax on utilities, the state education tax and real estate transfer tax but did not pass a companion bill to hold schools harmless, making it a non-starter for education groups.

Asked if a final budget will include any property tax cuts, Roth was coy, saying it was possible “the policy part of it could come afterwards.”

“We’re not giving up on property tax decreases … that could happen even after the budget, but that would be up to the principals to hash that out,” he said, referring to Hall, Brinks and Whitmer.

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