Lawmakers make cuts, draw on rainy day funds to cover Michigan’s $2 billion budget hole

Credit: “State Capitol” by OZinOH is licensed under Creative Commons

By Anna Liz Nichols, Associated Press/Report for America

LANSING, Mich. (AP) — Michigan lawmakers began approving a plan Wednesday to address a $2.2 billion state budget hole caused by the coronavirus pandemic, relying on a mix of federal funding, the state’s cash reserves and budget cuts.

Legislators meeting for a joint session of the House and Senate appropriations committees approved drawing $350 million from the state’s $1.2 billion “rainy day” fund, the second time the state has done so in 15 years. The panel also signed off, with a 15-1 vote, on an executive order from Gov. Gretchen Whitmer cutting nearly $667 million that includes reduced funding to state agencies and a hiring freeze.

Whitmer, a Democrat, and Republican legislative leaders announced an outline of the plan earlier in the summer. It also relies heavily on federal funding, using what’s left from the $3 billion Michigan got from the federal coronavirus relief law.

Public schools, community colleges and universities will use about $712 million in federal relief funds. The Senate approved two bills Wednesday, allocating $512 million for K-12 schools and $200 million to support universities and community colleges. Also, the state is setting aside $53 million in hazard pay for teachers.

Lawmakers praised the efforts as bipartisan.

State Sen. Curtis Hertel, a Democrat, said on the Senate floor Wednesday that he hopes the bipartisan collaboration will continue. In the coming weeks, legislators will have to tackle another budget shortfall for the fiscal year that starts in October.

“If you had told us a month ago that we would be voting on the floor of a Senate on a solution that gave more money to schools, more money to our municipalities, didn’t include massive layoffs, no major cuts to social welfare programs, I think people would have told you you were crazy,” Hertel said. “The fact that that was able to be worked together and accomplished is a testament to those involved in to what this body can be.”

Earlier in the day, a joint meeting of the state Senate and House appropriation committees deemed the plan as an effective solution to address the financial shortfall caused by shutdowns related to the coronavirus outbreak. The vote on the Whitmer’s order was 15-1.

“This has been very intense, especially I think, over the last two to three weeks time,” said Midland Republican Jim Stamas, Senate Appropriations Committee chairman. “I think we found a way to come together to find a solution.”

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Anna Liz Nichols is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.