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House, Senate Pushing Ahead With Budgets

House and Senate Republican leadership gave their appropriations subcommittee chairs their final targeted spending amounts Thursday and instructed them to begin pushing out conference committee budgets this week, MIRS has learned.

Thursday's legislative quadrant meeting with Gov. Gretchen Whitmer over the Fiscal Year (FY) 2020 budget and additional road dollars yielded little to no progress, sources report. The lack of movement spurred Senate Majority Leader Mike Shirkey (R-Clarklake) and House Speaker Lee Chatfield (R-Levering) to set Thursday deadlines for at least some of the department budgets.

"I did deliver targets to my subcommittee chairs today," confirmed Senate Appropriations Committee Chair Jim Stamas (R-Midland) to MIRS. "It's always been my goal to deliver a budget on time that focuses on the roads, education, water quality and meeting the needs of Michigan residents. I will make my strongest effort to do so."

Many of the differences between the House's $58.9 billion spending plan for FY 2020 and the Senate's $59.35 billion budget were worked out by June and subcommittee chairs have been waiting for word from leadership to push forward.

Now, negotiations between the Democratic governor and Republican legislative leaders have stalled out. The Governor's doesn't support the immediate amortization of the Michigan Public Schools Employees Retirement System (MPSERS) to free up roughly $600 million and Republicans' don't want to raise the $2.5 billion in revenue Whitmer insists is needed to fix the roads long term.

Republicans have offered some additional revenue options that haven't included Whitmer's proposed 45-cents-a-gallon gas tax increase. One option was increasing the sales tax on services to include ride-sharing services and delivery services, but preliminary estimates show a basic proposal bringing in roughly $30 million, a far cry from the $2.5 billion in new revenue Whitmer wants brought in.

Thursday marked the third straight day Shirkey, Chatfield and Whitmer met. Thursday's meeting also included Senate Minority Leader Jim Ananich (D-Flint) and House Minority Leader Christine Greig (D-Farmington Hills), sources tell MIRS.

The decision to push forward with budgets wasn't met with alarm within the Governor's shop.

While there's 25 days until the next fiscal year, there's a realization that Republican leaders don't want to show up to their Mackinac policy conference Sept. 20-22 without having a budget it could throw on the Governor's desk.

Facing the party's conservative grassroots having agreed with Whitmer to pass a tax increase -- of any size -- probably isn't the most politically desirable scenario either.

To an extent, waiting for the clock to run out to Sept. 30 is the most desirable situation for both sides.

Republican leaders don't want to concede that they agreed to a Whitmer tax increase.

Whitmer doesn't want to appear too eager to stretch out the MPSERS repayment schedule. The Michigan Education Association (MEA) is one of her charter supporters and the MEA hates the idea. To push the negotiations to the brink of a government shutdown gives both sides political cover to sign off on things they don't want to do.

This may explain why negotiations didn't go anywhere last week and why the likelihood of a deal in the back half of Sept. 23 appears more real.

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