Governor’s proposal is a proposal—budgeting is a process
by PETER MACGREGOR
Since the Governor unveiled some of his ideas and his budget proposal, my office phone and e-mail inbox has been flooded with ideas, encouragement, concerns, misconceptions and sometimes outright misinformation from constituents about what will happen in this upcoming budget.
I want to stress that the Governor’s proposal is just that—a proposal. There is a budgeting process that will now occur and is quickly occurring as the Governor has asked us to pass a budget three months earlier than constitutionally required. Most of you have greater day-to-day obligations and priorities than to concern yourself with how the state budget process works, so I wanted to briefly explain what will be happening between now and June 1.
A total budget dollar amount is determined for a year in advance (because we have to budget a year in advance) by a revenue estimate from the non-partisan fiscal office. This total amount is then given to the Governor, who provides his proposal to the legislature, broken down by department. The leadership in both the House and Senate review the Governor’s proposal, as well as take that total dollar amount, break it up into the various budgets for each department, and give the budget chairman “target numbers” for their respective budgets. Some of these target numbers are different than what the Governor has determined to spend on each department. However, the total amount is the same.
Each budget chairman then compares the Governor’s recommendation line by line with the priorities of their district, their caucus and the various groups that the budget may affect. Changes may or may not be made, depending on the department and each budget passes out of its respective appropriations subcommittee, then full appropriations committee, then the full chamber in both the House and Senate.
Where differences arise between the House and Senate, a conference committee comes together to negotiate the differences, and final approval from each chamber occurs before all the budgets are sent to be signed into law by the Governor.
In the past, each department budget was sent individually with line items “rolled down” so that an explanation and dollar amount for each item is easily accessible. However, the Governor has requested an “omnibus” budget bill, which means we could “roll everything up” into a few lines and pass one bill. This option is still being considered by the leadership in each chamber.
I have concerns that the “rolled up” option does not lend enough transparency and am “rolling down” the state police and military/veteran’s affairs budget of which I am the chairman.
It is also important to note that the state MUST BALANCE THE BUDGET each year. It is in our state constitution to do so, and it is much different from the way the federal government budgets—which is to perpetuate unlimited deficits.
I also want to stress the dire financial situation of our state. Sadly, years of cuts and continual news of revenue loss have made us all immune to our urgent situation. Those who depend on state funding have exhausted their tolerance or are in a situation now where, after years of cuts, will have to make serious changes or no longer function.
No one wants to continue to hear that the state has yet, again, lost revenue and will have to cut programs. However, it is reality. Not only are we $1.5 billion short for the upcoming budget, we have almost $40 billion in unfunded obligations that the previous legislature and Governor completely ignored. Additionally, the past legislature met the previous budget shortfall with $1.4 billion more in federal stimulus money that Michigan will receive this year.
As you can imagine, much negotiation will occur in the next few weeks. There are items in the Governor’s proposal I agree with, like privatization, eliminating duplicative services, and implementing a limit on welfare, and items I don’t, like the pension tax or the move to roll the Higher Education and Community College budgets into the K-12 School Aid budget. However, I am interested to review the final budget as a whole and can assure you I will be making my decision based on as much factual information as possible.
Although some tough cuts will be made, I am hopeful that we can protect the core services of our state government and make a more structurally sound economy. I am hopeful we can bring back the jobs and prosperity our state so desperately needs and avoid deeper cuts in future budgets.
As always, don’t hesitate to contact me. I appreciate your input and the opportunity to serve you.