By James M. Hohman
Mackinac Center for Public Policy
Michigan’s Legislature sued Gov. Gretchen Whitmer, arguing that the governor has overstepped her authority by issuing executive orders after it allowed her emergency powers to expire. This conflict shows that our elected representatives disagree about the appropriate response to the COVID-19 pandemic. But even as they fight in court, they still need to work together to keep the state government operating. There is no guarantee that this will happen, but with all of the current uncertainty, Michigan residents would be better off if lawmakers could at least provide certainty about state spending.
This year’s budget was built around revenue estimates made last year, which don’t reflect the loss of economic activity due to the stay-at-home orders, harms from the virus, and other economic effects of people’s precautions. Typically, when revenues do not come in as expected, it is up to the governor to recommend reductions in state spending. Article V, Section 20 of the state constitution requires the governor to send her recommendations to appropriations committees when
revenues are expected to fall below estimates.
Thus, legislators will continue to have a say in what happens in the current budget.
They also will be required to approve budgets for the fiscal year which begins in four-plus months. It’s not something that the governor can do unilaterally. Article IV, Section 31 of the state constitution gives the Legislature the responsibility of passing budgets. In addition, Article V, Section 8 only gives the governor authority to submit budgets to the Legislature for approval, not approve them herself.
The budget authority given to legislators means that the governor needs to work with them to keep the state government operating even as they fight each other in court.
This becomes a challenge. They already have different ideas for how the state should respond to the pandemic. They may also have different opinions about how pandemic-related strategies should guide budget priorities. For instance, if they disagree on whether state universities will be able to use campus facilities in the fall, they may also disagree on how much in state taxpayer dollars to give them.
They may differ in whether to cut, borrow, or raise taxes to address the new fiscal troubles. Lawmakers are going to have less money to budget than they thought they would have, and they will need to balance the budget to account for it. They should live within the resources they have and reduce expenses equitably. There is money to cut in the budget. But there is no mandate to cut spending instead of using tax hikes or debt, and the potential for disagreement casts uncertainty on what they will do.
We may soon get a preview of whether elected officials will be unified. The governor will have to submit to appropriations committees her plans to amend the current year budget. She may do so with or without seeking the opinions of legislative leaders. The way legislators react will say a lot. If they are aligned with the governor, they will treat reductions as hard but necessary, caveats allowed. If they are unaligned, legislators will criticize the recommended cuts.
It was the same for the budget last year, when the governor made heavy use of her veto pen on the Legislature’s approved budget. They were disagreement about priorities, so both sides reacted negatively. Some right-leaning voices treated the vetoes as cruel and described the governor’s actions as petulant, while the governor claimed the budget was a mess.
An ongoing budget dispute only promotes the uncertainty over the policy response to coronavirus -related problems. People want to know when they can be around other people and when they can get back to work. They want to know what the state is going to do, and part of the state’s response is in the budget.
The governor may not want to work with the Legislature. They haven’t been successful at many compromises yet. And disputes have led to lawsuits already. Still, the state would be better if they work together to pass budgets and avoid further litigation.
—————
James M. Hohman is the director of fiscal policy at the Mackinac Center for Public Policy. He holds a degree in economics from Northwood University in Midland, Mich..
