By Zachary Gorchow
President of Michigan Operations
Posted: June 15, 2021 2:39 PM

The administration of Governor Gretchen Whitmer and top legislative leaders are going through the annual budget target-setting process as we speak where high-level details for the upcoming 2021-22 fiscal year budget are negotiated and General Fund spending levels for each department are determined.

Usually, this would involve the sides making a deal here to achieve one side's priority and a deal there to attain another side's and overall meet somewhere in the middle on spending levels.

There's nothing usual about this year, however. The state has some $12 billion in unanticipated funds available thanks to revenues wildly exceeding forecasts and the mountain of federal aid from the American Rescue Plan. This is more than an entire year's worth of revenue to the General Fund.

In many ways, Budget Director Dave Massaron and legislative appropriators are building a new budget from scratch and not just for the upcoming fiscal year. They also must build huge supplemental appropriations bills for the current year.

Saying this is an unprecedented amount of money does not do the current climate justice. It is doubtful we will see something like this again.

These target meetings are especially delicate. As you might have heard, budget negotiations have gone really poorly between Ms. Whitmer and Republican legislative leaders since she took office in 2019. Save for the successful rush job on the current year 2020-21 budget put together last September, every other budget action has devolved into acrimony and each side testing the limits of their authority to stick a finger in the eye of the other side.

But all indications are this negotiation is going well so far and a target agreement is close.

Sometimes I think these target discussions, which take place behind closed doors, resemble the last scene in "Spies Like Us" where a U.S. delegation, led by the immortal Emmett Fitz-Hume and Austin Milbarge, is "negotiating" nuclear disarmament with a Soviet delegation based on who wins a game of Trivial Pursuit.

Last year's budget, while successful in the sense that Ms. Whitmer and the Republican majorities in the Legislature agreed to a budget, was the least transparent budget in memory. None of its spending details were made public until hours before the House and Senate sent it to Ms. Whitmer for signature.

It's now been six years since a target agreement was last made public. It used to be that once the governor and legislative leaders signed the target agreement, the details of that agreement would be made public. Then the chairs of the House and Senate Appropriations subcommittees would begin working out the finer points of the budget for each department and major budget area. It wasn't perfect but it allowed a good amount of detail to be put out to the public prior to the bills landing on the governor's desk.

In recent years, however, target agreements have not been released. There's never really been a good reason given other than that the principals don't want to do so. This also has followed a consolidation of decision-making authority on the budget in the hands of leadership and the Appropriations chairs. The subcommittee chairs, the ones who spend months building the details of each departmental budget, of late have been pushed aside for whatever reason.

The House, Senate and State Budget Office have loosely committed not to repeat last year's one-day budget rush delivery. In that instance, there was a target agreement with no details released and then about a week passed before the Legislature voted on those bills. The fiscal agencies made details of the bills public in the morning, and then, before anyone not directly involved in the process had a chance to comprehend them, the House and Senate passed the bills.

With the new July 1 deadline to present a budget to the governor, the calendar is setting up for something similar. There could be an agreement with Ms. Whitmer and legislative leaders sending the message of "Trust us, we found agreement, so it has to be good." There's once-in-ever money at stake here. Does the process end again with no opportunity for stakeholders and the public to share some thoughts on the agreement?