The Michigan State Budget Office is making contingency plans for a partial government shutdown. That would come if there’s no budget deal by October 1 between the Legislature and Governor Gretchen Whitmer, who is planning to deliver an address Tuesday calling on lawmakers to negotiate in earnest to send her a budget before the deadline.
“In this town, it takes 56 votes in the House, 20 votes in the Senate, and 1 governor’s signature for a bill to become law,” Whitmer will say, according to a portion of the address shared with Michigan Public Radio. “We can still do this on time, but the clock is ticking.”
Whitmer plans to say a budget plan adopted by the House Republican majority this summer is not acceptable to her. She will also note the GOP budget was adopted three weeks past the July 1 target set in a state law.
She will also note that budgets were not late during the four years when she was working with legislatures controlled entirely by Republicans. This year, power is divided between a Republican-controlled House and a Senate controlled by Democrats.
K-12 schools are already in a bind with no idea what to expect by way of state funding two-and-a-half months into their fiscal year, which began July 1.
Robert McCann is the executive director of the K-12 Alliance of Michigan, which represents school superintendents. He said some districts with smaller fund balances saved are looking at borrowing money from private lenders if there is a protracted shutdown.
“And that’s a terrible option for a district to have to go through, but, if it’s their only option, it’s the only thing they can do at that point,” he said.
But those borrowing costs would have to come from elsewhere in local school budgets, including spending that goes to classrooms and instruction, said Robert Dwan, executive director of Michigan School Business Officials. He said schools would be borrowing against future state aid checks.
“You will pay not only application fees, potentially, or bond counsel fees, but you’re also going to pay an interest rate,” he said.
That burden would likely fall most heavily on school districts least able to afford diverting resources from instruction and student support.
State departments and services would also be affected. The scope and timing of service rollbacks is still in the planning stages.
“While we have begun contingency planning for different scenarios, it's still too early in the process to determine what a shutdown would look like,” budget office spokesperson Lauren Leeds said in an email last week. “Our focus remains on enacting a full budget that protects Michiganders and our economy.”
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