Whitmer calls for federal bailout but announces no budget cuts

Almost two weeks after Michigan projected a $3.2 billion budget deficit for this year, Gov. Gretchen Whitmer renewed her call for a federal bailout.

State revenue cratered after Whitmer shut down much of the economy to slow the spread of COVID-19. More than a million people lost their jobs, and consumer confidence plummeted in response to the pandemic.

Whitmer in a May 4 news conference said she anticipated making “some hard decisions one way or another” by the end of May, but announced no further action Thursday, drawing the ire of Republicans.

Budget Director Chris Kolb echoed Whitmer’s call for federal action.

“With a general fund that’s been flat for more than 20 years, there’s very little left to cut from state government without impacting essential and critical services and programs,” he said during a Thursday news conference.

Kolb said although the 2021 budget is due by July 1, more information is needed from another revenue estimating conference and from future federal government action.

Kolb said the state budget office is looking at various scenarios, but “there’s simply no way to cut our way out of this just by looking at state budgets.”

Michigan has a $1.2 billion rainy day fund.

"Even if we used every single penny in that fund we won't be able to solve or close our budget problem," Kolb said. "A broader solution is needed, and Congress must come together to provide it."

Senate Appropriations Chairman Jim Stamas, R-Midland, said that “waiting on a Hail Mary from Congress is not a plan.”

“We now know the full scope of the budget problem, and we need the governor to start working with the Legislature to solve it. With each day that goes by without action, the state continues to spend money we don’t have – making it more difficult to balance the budget.”

Whitmer also unveiled her budget priorities: funding for school classrooms and literacy, protection of emergency responders, vaccine research, and road bonding programs.

The first-term Democrat also named her Future for Frontliners program as a policy priority, which she said aims to provide tuition free college for all frontline workers, funded with federal money.

Rep. Shane Hernandez, a Port Huron Republican who chairs the Appropriations Committee, criticized Whitmer’s priorities.

“Talking about free college while facing a massive $3.2 billion deficit in the current budget shows a lack of seriousness in addressing this situation. Instead of hoping for federal relief, we need details from the governor on how she wants to resolve this crisis,” Hernandez said.

“The shutdown has affected our economy and state revenues, but it’s our responsibility to limit its impact on Michigan families, businesses, schools and communities. We continue to stand ready to work with the governor to meet this challenge.”