Aug. 27 | This Week in Government: Budget Targets Set; Subcommittee Chairs Begin WorkAugust 27, 2021
- Budget Targets Set; Subcommittee Chairs Begin Work
- Congress Probing Shirkey-Chatfield Trump Meeting For Any Jan. 6 Ties
- Will $1B+ New Revenue Factor Into FY22 Budget?
- Pfizer Vax Gets Full FDA Approval; Michigan’s COVID-19 Cases Still Rising
- Gov: Spend $2.1B In Federal Relief For Economy; Signs Of Budget Life?
Budget Targets Set; Subcommittee Chairs Begin Work
Work to finalize the 2021-22 fiscal year budget picked up substantially in the past week with top legislative appropriations members and the administration of Governor Gretchen Whitmer agreeing to a target agreement that sets spending levels for each department and major budget area.
Sen. Jim Stamas (R-Midland), chair of the Senate Appropriations Committee, said in an interview that chairs of the Appropriations subcommittees in the House and Senate, along with departmental officials, began work Tuesday on finalizing budgets.
In recent years, most of the budget decisions have been made at the top between the budget director and top legislators. Mr. Stamas said Tuesday he is hopeful “as much as possible it’s handled with the departments and the chairs” this time, as was the case for many years.
“It’s what we’ve been working for to have that,” he said.
When the Legislature adjourned in late June, it was unclear when behind-the-scenes budget work would resume amid the deadline to complete the upcoming fiscal year budget before that year begins October 1.
What got things moving, Mr. Stamas was asked.
“We’ve had I think an opportunity to just have some space and work with our respective chambers and departments. I think last week went very well between Director Massaron and Chairman Albert and myself,” he said, referring to Budget Director Dave Massaron and Rep. Thomas Albert (R-Lowell), chair of the House Appropriations Committee. “Time away to get things moving again.”
Mr. Stamas said he does not anticipate it will go to the wire in September to wrap up the budget based on the work that has taken place lately.
Mr. Stamas’s depiction of the situation was confirmed by other sources.
Asked what areas of the budget would be the toughest to reconcile, Mr. Stamas quipped he didn’t want to jinx anything by getting specific.
As to what stakeholders might anticipate given the huge surplus in state revenues, Mr. Stamas said, “We’re going to look at one-time dollars as one-time opportunities and ongoing dollars are part of the consideration for ongoing programs.”
Sen. Curtis Hertel Jr. (D-East Lansing), minority vice chair of Senate Appropriations, said he’s cautiously optimistic about where talks stand. He concurred with Mr. Stamas about what got discussions moving.
“There’s a deadline,” he said. “There are real consequences to not solving it by the date. A little of time away and a little bit of deadline makes things easier.”
Congress Probing Shirkey-Chatfield Trump Meeting For Any Jan. 6 Ties
A meeting between former President Donald Trump and leaders of both the Michigan House and Senate last year is being probed by a congressional committee focused on the January 6 attack on the U.S. Capitol to see if there are any links between the two events.
In a 12-page letter sent Wednesday to United States Archivist David Ferreira, Committee Chair U.S. Rep. Bennie Thompson (D-Mississippi) renewed a request for record which the body sent back in March with several new requests for documents, including any planning done by the White House and others for legal purposes or for purposes of delaying, halting or otherwise impeding the Electoral College count.
Under that heading, Mr. Thompson specifically requests all documents and communications spanning from November 3, 2020, through January 20, 2021, “referring or relating to the 2020 election results between White House officials or officials of state governments.”
While the requests are not limited to just the individuals he lists, among the names written are Former House Speaker Lee Chatfield (R-Levering), current Senate Majority Leader Mike Shirkey (R-Clarklake) and Wayne County Board of Canvassers member Monica Palmer.
The request also extends to the staff and subordinates of those named.
In addition to those records, Mr. Thompson’s request includes the following topics:
- Recruitment, planning coordination and other preparations for the rallies leading up to and including January 6 and the violence on January 6;
- Information Mr. Trump received following the election regarding the election outcome, and what he told the American people about the election; and
- Responsibilities in the transfer of power and the obligation to follow the rule of law, and
- Any other materials relevant to the challenges to a peaceful transfer of power.
Mr. Chatfield and Mr. Shirkey were invited to the White House last November at the behest of Mr. Trump, who at that time sought to overturn Michigan’s 2020 presidential election results. Following that meeting, both Mr. Shirkey and Mr. Chatfield claimed that no improprieties had occurred and that local media outlets had blown the gathering out of proportion (See Gongwer Michigan Report, November 20, 2020).
Mr. Shirkey also claimed that Mr. Trump never solicited any type of election interference from the Michigan delegation, and that the former president was simply interested in what the state’s processes were in tabulating votes and absentee ballots (See Gongwer Michigan Report, November 24, 2020).
Now, however, that meeting is being eyed with some skepticism by the Select Committee to Investigate the January 6th attack on the United States Capitol, whose chair is now seeking records of said meeting – along with records of the former president’s phone call with Ms. Palmer, which occurred shortly after commissioners certified the county’s election results – from the U.S. National Archives and Records Administration.
Mr. Trump personally called Ms. Palmer following the board’s vote to certify the county’s local election results. She had also been the subject of threats following her lone vote to not certify the election results within her jurisdiction (See Gongwer Michigan Report, November 24, 2020).
A request for comment from Mr. Shirkey’s office regarding the congressional probe was not returned in time for publication.
Will $1B+ New Revenue Factor Into FY22 Budget?
Legislative appropriators and Governor Gretchen Whitmer already had an incredible $3.5 billion in unanticipated state revenues to handle when building the 2021-22 fiscal year budget, and now they have even more money as they finalize the budget in the coming weeks.
Through July, the state had about $1.65 billion in revenues that exceeded the May Consensus Revenue Estimating Conference forecast. That means, depending on how the Whitmer administration and lawmakers want to handle it, they could have $5.15 billion in additional state revenues to consider as they build the budget.
More of the unanticipated growth occurred in General Fund revenues. Since May, revenues are running $1.1 billion above the forecast, according to the Senate Fiscal Agency ($1.2 billion according to the House Fiscal Agency).
The agencies are a little farther apart on the surge in School Aid Fund revenues with the SFA saying the School Aid Fund has seen $604 million more than the May forecast and the HFA saying the amount is $413.6 million above the forecast.
There are differing views on how to handle this money, which is separate from the billions in federal coronavirus aid that will likely be handled through supplemental appropriations bills separate from the budget.
Sen. Jim Stamas (R-Midland), the Senate Appropriations Committee chair, said he intends to have the May revenue forecast guide the finalization of the 2021-22 fiscal year budget. Should the next revenue conference, scheduled for January, confirm revenues exceeded the May forecast, then lawmakers and the administration should deal with those new revenues at that time.
That could mean supplemental bills in 2022 or making those revenues a part of the 2022-23 fiscal year budget.
Kurt Weiss, spokesperson for the State Budget Office, said the administration is taking the same approach.
“We will build the budget based on the (May) revenue conference,” he said. “We know revenues are volatile given the pandemic. Then we will move quickly to work on the remaining federal funds and revenues with an eye toward ensuring long term sustainability of the state budget.”
Sen. Curtis Hertel Jr. (D-East Lansing), the Senate Appropriations minority vice chair, said he prefers to move at least some of the additional money now.
But he also said he is willing to look at other timetables.
“It’s OK to have two conversations as long as both conversations are moving forward,” he said. “The longer we hold onto it the worse it is for people, but that doesn’t mean we have to rush a decision either. I’m open to a reasonable timeline.”
Rep. Thomas Albert (R-Lowell), the House Appropriations Committee chair, said he is open to moving some of the unanticipated revenues but also urged caution.
“I don’t think we have to close the door completely on that,” he said. “Any additional spending, we do above baseline for the current year, we have to be cautious of. I don’t want to raise spending to a level that’s unsustainable, so we have to cut funding next year.”
Mr. Albert said there’s “an opportunity to look selectively at one-time investments” but also noted it will add more complexity to an already layered, complex budget cycle.
“I’m willing to have a conversation on what that balance is but keeping in mind the farther we go down that road the harder it will be to get a budget done early,” he said.
Pfizer Vax Gets Full FDA Approval; Michigan’s COVID-19 Cases Still Rising
The U.S. Food and Drug Administration on Monday gave the Pfizer coronavirus vaccine full approval – it had been given just emergency use authorization prior – as the state continues to see an uptick in cases.
Michigan is still struggling with an increase in cases and positivity rate as the virus spreads. For Saturday, Sunday and Monday, there were 2,690 cases reported. The seven-day average is now 1,543 cases. On Friday, it was 1,491. A week ago, it was 1,357.
From August 16-22, the state averaged 21,058 tests per day with a positivity rate of 8.6 percent. It was 8.3 percent from August 13-19.
Hospitalizations were up again since Friday with 1,136 with confirmed or suspected cases of the virus admitted to hospitals compared to 999 on Friday.
As cases continue to increase in Michigan and nationally, the FDA granted full approval to one of the three vaccines approved for emergency use in the United States.
Governor Gretchen Whitmer praised the approval of the Pfizer vaccine, and for those who are not yet vaccinated, said she hopes it encourages them to do so.
“Today, the FDA granted full approval to Pfizer’s safe, effective COVID-19 vaccine, manufactured right here in Michigan,” Ms. Whitmer said in a statement. “The FDA-approved Pfizer vaccine has already saved countless lives in Michigan and around the world, so if you have already gotten your shots, thank you for doing your part to keep yourself, your family, and your community safe.”
Speaking to reporters, Ms. Whitmer said she would not offer predictions on what the decision could mean for increasing vaccinations but she said it should help.
Dr. Joneigh Khaldun, the state’s chief deputy for health at the Department of Health and Human Services, called the FDA’s approval an important milestone.
“Michiganders can be very confident that this vaccine meets the high standards for safety and effectiveness as required of approved products by the FDA,” Ms. Khaldun, who is also the state’s chief medical executive, said in a statement. “While more than 5.2 million Michigan residents 16 and older have already received their first dose, we recognize that for some the FDA approval of a vaccine may now instill additional confidence to get vaccinated. We urge all eligible Michiganders to get vaccinated as soon as they are able.”
Gov: Spend $2.1B In Federal Relief For Economy; Signs Of Budget Life?
Governor Gretchen Whitmer offered her latest proposal Monday on how to deploy the huge windfall in federal aid the state has received through the American Rescue Plan, proposing a $2.1 billion mix of spending on developing affordable housing and expanding programs designed to improve residents’ job credentials, boost start-up companies and aid businesses damaged by the pandemic.
Ms. Whitmer outlined a series of proposals at a news conference in Lansing. All would require approval by the Legislature.
Talks on the 2021-22 fiscal year budget, which are being handled separately from how to spend the federal aid, are reportedly progressing well, multiple sources said Monday. Sources, speaking on background, said numbers have been circulated to members that resemble what would usually constitute budget targets for departments and major budget areas. The expectation remains, these sources said, that the federal aid will be handled in supplemental appropriations bills separate from the regular budget bills.
Ms. Whitmer cited several positive pieces of economic data on the state, but she also warned they paint an incomplete picture.
“We have a lot left to do,” she said. “Rosy topline statistics sometimes hide the full context of what is happening.”
Ms. Whitmer added that while the unemployment rate is near pre-pandemic levels, labor force levels are not.
The governor proposed three buckets of funding include:
- $722 million for educating more workers with a goal of boosting the size of the middle class;
- $651 million to support businesses and create better jobs; and
- $800 million to build housing and invest in communities.
Among some of the specific items, Ms. Whitmer called for pumping $215 million more into the Michigan Reconnect and Future for Frontliners programs designed to facilitate degrees and skills certificates for more people and $100 million more for the Going PRO program that enables employers to provide greater training for their workers.
There would be an additional $200 million – on top of the $300 million Ms. Whitmer proposed already – to offer grants to restaurants, place-based businesses and small businesses. Another $200 million would go toward growing high-tech start-up businesses, with $100 million allotted for preparing manufacturers and the workforce for future job opportunities.
On communities, Ms. Whitmer already had proposed $100 million toward building 2,000 housing units. Now she’s proposing to expand that by $50 million, plus another $100 million to rehabilitate vacant buildings and $200 million to redevelop brownfield sites.
The governor’s proposals were met with praise from several organizations.
“Let there be no doubt about it, COVID has changed our economy,” Jared Fleisher of Rock Central said at the news conference. “We could not stand in stronger support. We could not believe that the investments that are being announced are more critical to the future of our state, our future prosperity.”
John Walsh, president and CEO of the Michigan Manufacturers Association, said the group is thankful for Ms. Whitmer’s willingness to address the industry’s biggest challenges.
“The proposed investments in training and education will create opportunities for our citizens and growth in manufacturing. We look forward to working with the Whitmer Administration and the legislature as they finalize their recommendations,” he said.
Jeff Donofrio, Business Leaders for Michigan president and CEO, urged the governor and Legislature to come together to use the onetime funds for transformational change.
“This is a monumental opportunity to accelerate talent development, job creation and strengthen communities so that Michigan can emerge from the pandemic as stronger and more competitive,” he said in a statement. “With states across the country using onetime dollars to upskill and attract their workforce and create new jobs, we can’t afford to waste this chance to invest in our future.”