In her first State of the State address last month, Gov. Gretchen Whitmer sought to distinguish herself from her predecessor, Republican Rick Snyder, by arguing that Michigan has to “act boldly and swiftly” and invest in schools and infrastructure.
But there was one area in which she praised Snyder: the budget process.
The Democrat threw down a challenge for the GOP-led Legislature to finish budgets before taking off for the summer, just as they did during the Snyder era.
As Whitmer gets ready to present her fiscal year 2020 budget on Tuesday, she’s looking to continue another Snyder tradition.
The governor also will use the omnibus budget process Snyder started, said Kurt Weiss, Michigan Department of Technology, Management and Budget (DTMB) spokesman.
So what does that mean, exactly?
Snyder’s stamp on budgets
Michigan’s budget process changed under Snyder.
In recent decades, previous governors presented their state budget with spending priorities to the Legislature in either February or March.
One of the arguments that’s been made to keep a full-time Legislature is that it takes time to process spending for the state’s 10 million people. The current budget comes in around $56 billion.
Spending was divvied up by budget areas, such as higher education, environment, corrections, K-12 education and Michigan State Police. The Legislature took up the budget in a series of bills sent to House and Senate Appropriation committees.
There would be more than a dozen bills, but the exact number would vary — roughly corresponding with the state departments receiving appropriations. Appropriations subcommittees would then deliberate on bills, with panel chairs often having a big say over details in their respective budget areas.
Budget bills would go through several versions in both the House and the Senate and end up in conference committee, in which legislators from both parties and chambers would hash out a final deal. Then the full House and Senate would vote on individual budgets, one by one.
The process was time-consuming for both the governor and Legislature. It often only came to a close in the fall, not long before the Oct. 1 start of the state fiscal year. Last decade, leaders blew that deadline twice and briefly shuttered the government.
Snyder, a former Gateway CEO, sought to streamline the process.
He presented his first budget in 2011 in omnibus form and the practice stuck. That meant that he had two gigantic budget bills: one for education — K-12, public universities and community colleges — and a general budget for everything else. This is known among some policy wonks as “rolling up” the budget.
As a result, the bills were long, raising questions if lawmakers actually read what they were voting on. The fiscal year 2019 omnibus general budget was 300 pages. The omnibus education budget was 107 pages.
However, even with an omnibus process, elements of the budget are broken down and considered by Appropriations subcommittees and then pancaked back together again.
“All of this stuff gets hashed out in committee anyway,” Weiss said. “You are going through the legislative process anyway.”
Matthew Ferguson, a budget analyst with DTMB, said on the legislative side, he doesn’t “see a real practical difference” with rolled-up budgets.
Eric Lupher is president of the nonpartisan Citizens Research Council. He agreed that the omnibus process is not dramatically different from the way budgets used to get done.
“Cynically, it’s more window-dressing than substance,” Lupher said.
But not all legislators were sold on the process, especially Democrats, who believed that this gave the Republican governor more power over spending decisions.
“This budget process has moved far too quickly, and the plan signed by the governor is risky for the state’s long-term economic growth,” then-state House Minority Leader Rep. Richard Hammel (D-Flushing) said when Snyder signed his first budget in 2011.
But in the age of term limits, there aren’t many legislators left now who remember how the budget process worked before Snyder.
There has been considerable criticism about the education omnibus, as it has mixed the General Fund and School Aid Fund streams. The practice of using SAF funds for higher education began in the Gov. Jennifer Granholm era during fiscal year 2010, when Michigan was facing a multi-million deficit during the Great Recession.
But the practice accelerated under Snyder’s rolled-up education budget. In the current budget, $908.3 million has been diverted from the SAF, according to the nonpartisan House Fiscal Agency. That supports the entire Community Colleges budget and represents one-third of state funds in the Higher Education budget for the state’s 15 public universities.
Currently, 7 percent of the School Aid Fund goes to higher education institutions.
Snyder and proponents cite Article IX, Section 11 of the Michigan Constitution establishing the SAF, which states it “shall be used exclusively for aid to school districts, higher education, and school employees’ retirement systems, as provided by law.”
Groups including education unions and the Michigan League for Public Policy (MLPP) have opposed the practice.
“Over the past eight years, the exception unfortunately became the rule, and using School Aid Fund dollars for higher education went from a last resort to the first order of business,” MLPP President and CEO Gilda Jacobs said in a press release last year. “Just because you can do something doesn’t mean you should. While this gimmick may be legal, it is morally and fiscally irresponsible, and lawmakers should put an end to the practice immediately and permanently.”
That’s one area in which Whitmer is likely to break with Snyder. She slammed the raid of School Aid Fund money during her 2011 to 2015 tenure as state Senate minority leader. And as a candidate for governor, Whitmer vowed to stop the practice.
Some observers also have argued the omnibus process dilutes transparency. But that also can make it easier to get budgets passed.
“Voting for just two large budget bills prevents lawmakers from having to vote up or down on specific issues involving each department,” MIRS and former Capitol Confidential reporter Jack Spencer wrote in a 2014 column. “This gives them plausible deniability.”
Brian Calley is a former state House member who served as Snyder’s lieutenant governor for eight years. He told the Advance that doing individual department budgets ran the risk of creating fund imbalance.
“It was all about making budget decisions in the context of all the other decisions that had to be made,” Calley said.
“[It was] recognizing that all these independent spending decisions don’t necessarily add up or result in the structural balance that we were looking for,” Calley continued. “Making the decisions and recognizing that prioritize in certain areas can affect prioritizes in other areas.”