By Zachary Gorchow
Executive Editor and Publisher
Posted: March 25, 2020 2:24 PM

On March 12, shortly after Michigan had its first confirmed cases of the new coronavirus, the Legislature with overwhelming bipartisan support passed a supplemental appropriations bill with the backing of Governor Gretchen Whitmer containing $312.3 million.

The bill restored at least partial funding to some of the major programs Ms. Whitmer line-item vetoed in last year's budget standoff like Pure Michigan and Going Pro. It also has new funding for Ms. Whitmer's Michigan Reconnect program to provide tuition-free community college or certificate training. There are payments to handle lawsuit settlements and immediate state information technology needs.

There's $25 million to fund the state's response to the COVID-19 pandemic (in addition to a separate bill the Legislature approved with another $125 million).

It also had $37 million in funding for items known as Michigan Enhancement Grants, projects legislator select as priorities in their districts. To some, these are needed projects that will benefit the public. To others, some of these projects are "pork" – items placed into the bill for no other reason than to secure "yes" votes with a dubious benefit to the public at large.

Of the $312.3 million, $180.7 million comes from the state's General Fund. The rest is federal and restricted funds.

At the time this bill passed, the stock market had begun its plunge as the economy began to falter as COVID-19 cases spread. But none of the drastic measures many governors, including Ms. Whitmer, have taken had yet to be announced or implemented, like stay-at-home orders and the shuttering of whole industries.

Now it's clear state revenues are headed into freefall with layoffs soaring, the stock market tanking and consumer spending shutting down. These developments will surely have dire impacts on state income and sales tax revenues, which lest we forget are the two main sources of funding for state government services and K-12 schools.

The bill has been on Ms. Whitmer's desk since March 16. It was a negotiated agreement.

But the governor has not yet signed the bill. And the Whitmer administration is not exactly vocally backing the bill (SB 151) it negotiated with the Legislature.

Whitmer Press Secretary Tiffany Brown said today, when asked if the governor is having any second thoughts about the bill given the developments of the past two weeks, only that "review continues, but no update to share at the moment."

Spokespersons for House Speaker Lee Chatfield (R-Levering) and Senate Majority Leader Mike Shirkey (R-Clarklake) said last Friday they still expected Ms. Whitmer to sign the bill (See Gongwer Michigan Report, March 20, 2020).

But the vague response from the governor's press office seems ominous.

Ms. Whitmer seems to have three options: She could sign the bill and sort it out later once the state has a clear picture of the impact on revenues of COVID-19, she could line-item veto everything in the bill other than the $25 million to aid response to the new coronavirus and any mandatory spending (like funding to pay for Medicaid caseloads, lawsuit settlement payments and a few other items) or she could pick and choose what to line-item veto and try to save some of the spending on priority programs.

The first option could box the governor in somewhat if and when she needs to issue an executive order cutting the budget, but it would buy some time. The second option would be painful because she would have to sacrifice one of her top priorities, the Michigan Reconnect program, but would be the most magnanimous and fiscally cautious. The third option would probably infuriate the members of the Legislature whose programs they thought had buy-in from the governor's office and reignite trust issues, but preserve the items the governor sees as most vital.

All this at a time when Ms. Whitmer is confronting one of the most dire crises in state history.

Ms. Whitmer has until 11 a.m. Monday to decide.