Gov. Gretchen Whitmer, House Speaker Matt Hall (R-Richland Township) and Senate Majority Leader Winnie Brinks (D-Grand Rapids) jumped into a closed-door meeting in the Governor’s Capitol ceremonial office for about an hour Thursday as the prospects of reaching a deal on a Fiscal Year (FY) 2026 K-12 budget and, possibly, a road funding deal, seemed bleak.
The Senate sent signals Thursday that it wanted to reach agreement on the entire FY ‘26 budget before July 1, an extreme long-shot if not an impossibility given the House has moved out few of its General Fund-dependent department budget plans.
More to the point, the Senate leadership wants to know where the House Republicans’ landing spot is for the budget. Since the House R’s haven’t moved out their General Government budget, the Senators want to see, in bill form, how the Republicans plan on cutting the income tax and finding $3 billion of new road funding money within the existing budget without increasing taxes.
For example, one source said Senate Democrats are concerned that House Republicans want to hold off on spending hundreds of millions in new School Aid Fund (SAF) revenue.
While it is not unheard of to set aside some new SAF revenue, opting not to allocate it in the new fiscal year, Senate Democrat budget negotiators want to know why such a large chunk would remain on the balance sheet. They question whether it’s to fund a future roads deal, to support a new tax cut or both. Some on the Senate D side didn’t have a clear and direct answer.
On the other side of the Capitol, House Republicans want to know the Senate Democrats’ vision for a long-term road funding solution. Do they have one? Is that a priority?
Meanwhile, the Governor’s office would prefer to pass a deal sooner than later and, preferably, something that includes a long-term road funding component.
The House and Senate spent much of the day at the Capitol in a stalemate, seemingly daring the other to adjourn first to let the blame game commence. Instead, the Senate reset its calendar to hold session at noon on July 1 and 2 to at least match the House’s July 1 session date.
Originally, for July and August, the Senate had no session dates scheduled outside of July 15-17 and August 12-14. Thursday evening, Senate Majority Floor Leader Sam Singh (D-East Lansing) moved that the Senate meet again July 22, July 29 and Aug. 26.
Over in the House, Republicans cued up a second K-12 budget bill, just in case negotiations went south and leadership wanted to make a point before adjourning until July, but things didn’t come to that.
The House adjourned Thursday night after eight hours of session and no movement on education budgets, but Hall said he’s committed and optimistic that K-12 will be funded by Tuesday, July 1, after his meeting with the Governor and the Senate Majority Leader Thursday.
Hall said he was grateful that the Governor came to the Capitol, giving him and Brinks the opportunity to sit down and talk, and that he’s more optimistic about passing a K-12 bill after meeting with the governor.
“I’ll say that I’m committed and the House Republicans are committed to working through the weekend, working tomorrow, working more tonight, working over the weekend, with our goal of still trying to get something done on roads and education by July 1,” Hall said to reporters at the end of the day.
Hall said he doesn’t think that means the House will have a voting session day between Thursday and July 1, but “anything’s possible.”
“It’s very clear to me that the deadline is July 1. Like it’s not June 30 at 11:59. It’s July 1 at 11:59,” Hall said. “So to me, as long as you do it on July 1, and you present it and everything else. It would meet the deadline.”
Previously, House Republicans viewed the July 1 statutory deadline as a goal, and Thursday Hall stated that it’s an “aspirational goal,” but said he’s negotiating with other people who “seem to only be able to get results when there are deadlines.”
“Utilizing this aspirational deadline that’s primarily school-based and trying to get a school budget done by that date puts us in the best position to actually get that done by July 1. And if we don’t do that, I have concerns that this school budget will not get done until much later.”
Hall said negotiations have not yet reached a point where they’ve decided to take the bills through the conference committee process or add substitutes and concur the bills. He said right now, both options are on the table.
Hall said if a K-12 and a roads plan can get ironed out, it will “unlock” the rest of the budget.
While he’s not dead set on a transportation budget passing by July 1, Hall said he’d like to at least be able to announce a plan by that date. He said other education budgets, like higher education, community colleges, the Michigan Department of Education and the department of Lifelong Education, Advancement and Potential, are too heavy of a lift to include in the July 1 deadline with K-12.
Hall said the most major point that he, Brinks and Whitmer agree on is continuing to work on these negotiations, which “isn’t something that always was guaranteed.”
As far as the biggest points of disagreement between them, Hall said the per-pupil allowance in the K-12 budget and funding roads without raising taxes in the transportation budget.
Hall said the biggest concern he heard from his caucus members Thursday was that as the day went on and the Senate didn’t have another session day scheduled before the deadline passed, that meant this budget would need to get figured out Thursday, which was resolved when the Senate added days to its schedule.
Last month, the Senate Fiscal Agency projected that while the General Fund’s year-end balance will be $553 million lower, year-end SAF revenue in the fall will be $240 million higher at $1.24 billion total for SAF.
While walking into her office right before 8:30 p.m. Thursday night, Brinks, when asked if a budget deal is ready to go for Tuesday afternoon, said “we have a lot of progress that needs to be made before we’re ready, but I remain hopeful.”
In late 2019, legislators created a July 1 deadline for finalizing and voting out a complete budget plan – covering both K-12 school funding, state departments and higher education – to be signed by the Governor over the summer.
Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter
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