LANSING — Michigan lawmakers enter the last week of the Legislature's lame-duck session with hundreds of millions of dollars in surplus funds in state coffers, raising the possibility they could cap the frenetic lame-duck session with a last-minute spending spree.
Legislative leaders confirm a wide range of spending proposals are under consideration, despite growing warning signs at the state and national level that a nearly decade-long stretch of sustained economic growth could soon be coming to an end.
Though key lawmakers from both parties say they would not support — and do not expect — any move to empty the state treasury "cookie jar," there is some nervousness among Democrats, given the fact that several lame-duck bills are seen as attempts to weaken the powers of the incoming Democratic governor, attorney general and secretary of state, or erect roadblocks in the way of their stated plans.
Already mulling a $371-million supplemental spending request for 2019 from Republican Gov. Rick Snyder, after state tax revenues came in higher than anticipated, lawmakers learned last week they have another $98.5 million to work with. That's based on administration estimates of money that was appropriated for various state agencies for the 2018 fiscal year, but left unspent.
"There are a lot of requests" from lawmakers about how to spend the money, and "some are random, some are unique," said Sen. Dave Hildenbrand, R-Lowell, chairman of the Senate Appropriations Committee, who declined to detail the various requests lawmakers have submitted.
"We'll just have to sort through them and see which ones, when we vet them, are legitimate to consider for state resources."
Snyder has recommended significant spending on roads, child protective services, rebuilding the Soo Locks, fighting harmful per- and polyfluoroalkyl (PFAS) chemicals, and shoring up the state's already healthy Rainy Day Fund. But all of his recommendations are subject to change by lawmakers, and the uncertain nature of what could be close to half a billion dollars in last-minute spending is not without worry for activists on both the right and the left of Michigan's political spectrum.
"My first choice would be to return the money to the taxpayers," said Pete Lund, Michigan director of the tea party-aligned group Americans for Prosperity.
"If you're going to spend it, spend it somewhere useful," such as on fixing roads, paying down debt, or shoring up the Budget Stabilization Fund, also known as the Rainy Day Fund, Lund said.
"What you don't want to see is someone getting their building they can name after themselves."
Gilda Jacobs, CEO and president of the left-leaning Michigan League for Public Policy, said she hopes lawmakers will embrace at least some of Snyder's spending recommendations, such as $21.2 million to hire 246 additional child protective service workers and supervisors, along with $10 million in information technology improvements for that unit of the Department of Health and Human Services.
Asked whether she is concerned the Legislature might approve spending or tax cuts that would reduce Democratic Gov.-elect Gretchen Whitmer's room to maneuver with respect to the budget, Jacobs said: "Who knows what they have cooked up?"
Jacobs said she's confident Snyder wouldn't sign bills that would put the state in a weaker financial position by, for example, making additional tax cuts, or draining significant amounts from the Rainy Day Fund, which now has a balance of close to $1 billion, and which Snyder wants to boost by another $160 million through the supplemental appropriation bill.
However, "I do not put anything past the Republican legislators right now because they're coming up with all kinds of pretty terrible bills," Jacobs said.
The consideration of increased state spending comes as many national economists say there is increasing likelihood of a recession in the next one to two years and GM prepares to shutter auto plants in Michigan and elsewhere.
Hildenbrand said his spending priorities are broadly in line with Snyder's, and include more funding on roads and infrastructure — Snyder has proposed an extra $183 million for state and local roads and $52 million for a planned project to upgrade the Soo Locks — boosting the Rainy Day Fund and addressing environmental cleanups, now that a voter-approved bond issue for that purpose has run dry.
The money Snyder proposes spending on roads is from increased tax revenues from online sales -- revenues some say should mostly go to the School Aid Fund. Which funds will be tapped for which spending plans will be an important issue in lame duck deliberations.
"I would never support leaving a hole for any future governor," Hildenbrand told the Free Press. "I want to be responsible. I want to leave the state budget in a better place than when I found it."
Sen. Curtis Hertel, D-East Lansing, a member of the Senate Appropriations Committee, said he would be surprised by any attempt to weaken the state's budget foundation for the next governor.
"Everything I've seen indicates that's not going to happen," Hertel said. "I don't think the governor would sign it and I think frankly it's just not likely."
Hertel said he has two main spending priorities. One is to improve funding for higher education without using the School Aid Fund, which he believes should be reserved for support to K-12 schools. Another priority is improved funding for roads, he said.
If funding is available, Hertel said, he could also support spending to improve the Capitol building as the people's house.
One spending proposal under discussion is a 54,000 square-foot Capitol auditorium. It has an estimated price tag of $55 million, which could be considered separately through a capital spending budget that might use government bonds as financing, rather than the general fund money that makes up most of Snyder's recommended supplemental spending.
Both Hildenbrand and Hertel said they've heard discussions about a lame-duck tax cut, but neither thought the discussions have risen to the level of something that is under serious consideration.
Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4.
Snyder's spending wish list
Gov. Rick Snyder has sent a $371-million supplemental budget spending request to Michigan lawmakers, which is expected to be taken up this week. Lawmakers could decide to spend more or less than Snyder is recommending, and they could also approve different spending specifics
Here are some highlights of Snyder's request:
- Spending on state and local roads: $183 million.
- Soo Locks improvement project: $52 million.
- More child protective service workers: $21.2 million.
- Fight PFAS chemical contamination: $14.7 million.
- Boost state's Rainy Day Fund: $160 million.
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