The Detroit News: Why Whitmer doesn’t want one-time $500M for roads

The Detroit News

Sept. 12, 2019

Lansing — Democratic Gov. Gretchen Whitmer spent the past six months pushing for nearly $2 billion a year in additional road spending but is now opposing a Republican proposal to add $500 million in one-time funding to the 2020 budget.

GOP leaders say Whitmer walked away from budget negotiations Wednesday because of a dispute over the one-time money, a claim she called “hysterical” given her initial proposal to hike fuel taxes by 45 cents per gallon — more than 170% — and recent pledge to postpone long-term road funding talks until after the budget.

Gov. Gretchen Whitmer discusses the latest budget stalemate with reporters Thursday.

“To come back and say we want to all of a sudden put some one-time money in does not fix the problem,” Whitmer said Thursday. “In fact, it makes it more expensive to do the work because there’s not the ability to plan and you have to all of a sudden ramp up.”

Senate Majority Leader Mike Shirkey, R-Clarklake, had long pushed to separate long-term road funding talks from budget negotiations but said the recent agreement to do so should not stop the state from pumping more one-time money into roads.

“The agreement between us is we would stop talking about long-term sustainable road funding” until after the budget, he said. “We never ever contemplated or agreed to not having continued one-time funding — ever.”

Shirkey said Republicans on Wednesday proposed $500 million in one-time money — on top of the $175 million general fund increase already mandated under the 2015 road funding law — and the governor came back with “a very, very low number.”

“Then we countered that with what we thought was a reasonable number, and then we got crickets,” he recounted.

Republicans lit into Whitmer for opposing the one-time roads money, a position House Majority Leader Triston Cole of Mancelona called “farcical” and compared to “nursery room political games.” Michigan Republican Party Chair Laura Cox labeled the governor “Gas Tax Gretchen.”

But Whitmer argued that recent infusions of one-time cash have done little to reverse the trajectory of the state’s crumbling roads, whose conditions are projected to stagnate and decline despite a 2015 funding law and subsequent supplemental appropriations.

“This is the worst way to go about doing it,” she said. “This is the exact kind of gimmick that got us in this problem in the first place. This phony game that we’re fixing things with one-time money is not going to cut it.”

Democrats have suggested one-time funding could lessen GOP motivation for a longer-term deal while using up discretionary general fund dollars that could be spent on other priorities.

Republican budget proposals advanced Thursday included smaller education funding bumps and ditched one of Whitmer’s top priorities, a $110 million Michigan Reconnect grant program to help retrain residents for specialized careers.

Senate Minority Leader Jim Ananich, D-Flint, echoed Whitmer’s argument that one-time funding — which Democrats have voted for in recent years under Republican former Gov. Rick Snyder — could drive up the cost of road construction projects.

“I think it puts a Band-Aid on a broken leg,” Ananich said. “We need to solve this. We need to get moving towards solving this problem. And every time we try to put a Band-Aid on it, we do not.”)

The Whitmer administration contends road builders need a sustainable funding plan that will give them confidence to hire the kind of staff and purchase equipment needed to ramp up work and actually fix the problem.

Lance Binoniemi of the Michigan Infrastructure and Transportation Association, which represents contractors and advocates for more road funding, agreed that continual one-time spending “does make it difficult for members to plan ahead and invest.”

A $500 million bump won’t necessarily drive up prices if Whitmer and lawmakers follow it up with a long-term spending plan, as they’ve vowed to attempt after the budget, Binoniemi said.

“But certainly if there is no road funding solution that is sustainable and long-term, then they’re absolutely correct. I don’t think anyone believes that $500 million one time is going to solve this road-funding problem.”

The Legislature has been putting surplus dollars toward road for the past several budgets, and Michigan infrastructure needs “every single dollar we can afford to put towards them,” said House Speaker Lee Chatfield, R-Levering.

“It’s simply common sense,” Chatfield said. “It’s what the people of our state expect us to do.”

GOP leaders reiterated they remain committed to negotiating a long-term road funding solution later in the year.

“What we’ve agreed to do is pass a responsible budget, put every single available dollar toward roads that we have and then continue having the conversation of a long-term structural fix,” Chatfield said.

Whitmer on Monday reversed her pledge to veto any budget without a long-term road funding plan in order to avert a government shutdown. But she nearly renewed the threat Thursday as Republicans plowed ahead with work on their own budgets.

“They gotta do what they gotta do, and I’m going to do what I gotta do,” Whitmer said.  Asked if that meant a veto, the governor told reporters, “We’ll see.”

The state is constitutionally required to have a balanced budget in place by Oct. 1.

 “I’m hopeful that I get budgets on my desk that educate our kids, prioritize that, as well as closing the skills gap,” Whitmer said. “These are things that are of critical importance to our economy, to our quality of life and our ability to compete with the rest of the world.”

The governor’s fuel tax proposal would have generated $2.5 billion in new revenue by 2021, including $1.9 billion in new and dedicated money for roads. The extra revenue would have allowed the state to stop using School Aid Fund dollars to fund universities, freeing up more cash for K-12 schools and education.

Republican-controlled conference committees on Thursday advanced a series of budget bills that cannot be amended on the floor but could return to the panels for changes if and when Whitmer and GOP leaders reach a consensus on the budget.

The GOP budget for K-12 schools would increase spending 2.4% to $15.2 billion, slightly less than the 3.5% increase to $15.4 billion proposed by Whitmer. The plan includes $304 million to boost K-12 classroom spending by between $120 and $240 per pupil.

That’s a larger allowance bump than the $235 bump proposed by Whitmer, but her budget also included larger increases for at-risk, special education and career tech students, moving the state more aggressively toward a weighted funding formula.

“What’s nice about this budget is it lives within our means,” said Sen. Wayne Schmidt, R-Traverse City, who praised the K-12 spending plan but noted “there’s certainly a lot more discussions going on at a higher level than us.”

Democrats criticized the K-12 budget, which proposes what Sen. Rosemary Bayer of Beverly Hills called “an inadequate increase for this year for what we need to do for our kids” and an “inequitable funding model not based on specific children and their needs.”

The GOP’s higher education budget also included a smaller hike than Whitmer’s. It proposes a 0.5% increase of $7.9 million for university operations, down from the 3% increase of $43.7 million proposed by Whitmer.

Wayne State University in Detroit would remain below 2011 funding levels under the Republican plan. The budget also includes $343 million in School Aid Fund money, which Whitmer has pushed to pull back for K-12 schools.

The GOP’s community college budget includes $2.4 million in additional money for operations, less than the $9.7 million Whitmer had proposed.

The environmental department budget approved in conference committee Thursday included $120 million in one-time funding for clean drinking water and innovation initiatives, largely tracking with a request Whitmer made earlier in the year.

The plan has $40 million to fight PFAS and other emerging contaminants, $35 million in forgiveable drinking water revolving fund loans and $30 million to help local governments prepare for the state’s toughening Lead and Copper Rule.

Conference committees are scheduled to meet again next week to consider additional budget bills. 

Staff reporter Beth LeBlanc contributed.