Budget chairs: Lift July deadline; Senate wants federal help

LANSING (AP) — Key Republican lawmakers on Thursday backed legislation that would waive a requirement that the Legislature pass the next state budget in less than three weeks, citing uncertainty over a major shortfall caused by the coronavirus pandemic.

Senate Appropriations Committee Chairman Jim Stamas, of Midland, said he would push for quick passage of the Democratic-sponsored bill, two weeks after the state budget director said the budget timeline would have to be different. It would, for one year, lift the new July 1 deadline by which legislators must send Gov. Gretchen Whitmer a spending plan for the fiscal year that starts Oct. 1.

House Appropriations Committee Chairman Shane Hernandez, of Port Huron, also supported waiting to resolve the 2020-21 budget as long as discussions continue among the House, Senate and administration on allocating initial federal COVID-19 rescue funding and addressing the current budget deficit.

Stamas noted a three-month delay in the state’s income tax deadline, to July 15, and the scheduling of a rare revenue-estimating meeting for August as Michigan confronts a nearly $6.3 billion hole over this budget year and next.

“We need more time to put forward a constructive budget,” he said.

The earliest it could be fully completed is late August, Stamas said, though he hopes to potentially enact an education budget sooner.

“It’s challenging without knowing what our revenues are at the moment,” he said.

Also Thursday, the GOP-led Senate embraced calls by Whitmer and other Democrats for Congress to help the state, schools and municipalities address revenue shortfalls from the economic shutdown. The resolution, approved on a voice vote, urges Congress to give the state flexibility to use $3 billion in federal relief funds to alleviate “dramatic cuts” — not just to cover costs directly associated with the pandemic — but stops short of pushing for the approval of another round of aid.

Stamas said he “wouldn’t say no” to more federal help, but “we can’t count on that.” Hernandez said he is “far more open” to asking for flexibility with earlier rescue money than he is to seeking additional funding.

K-12 school districts, which start their budgets July 1 — three months earlier than the state — are confronting a $1.2 billion shortfall in Michigan’s school aid fund in the current fiscal year and a $1.1 billion gap next year along with additional virus-related costs.

“They are being asked to make incredibly tough decisions at this very moment,” said Sen. Winnie Brinks, a Grand Rapids Democrat. “Increasing flexibility when using CARES Act dollars will help mitigate drastic cuts that our schools and communities are facing.”

Congress appears unlikely to act, though, until after July 4.

Hernandez said schools in his district are preparing for $500 to $1,000 per-pupil reductions in the coming budget year, 6% to 12%. The state could bolster its case for the flexibility, he said, by proposing a balanced budget “even if it isn’t pretty. … I’m not a big fan of the idea of going to the federal government and asking for that help when we don’t have a plan on the table.”

Legislators are expected to use savings or other maneuvers to prevent cuts to the current K-12 budget since the school year is essentially over.

“We’re just literally looking at all of the options at the moment,” Stamas said.