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Quarterly Budgets; Executive Cuts Highlight House Budgets

April 27, 2021

Nine state departments would be funded quarterly, as opposed to annually, and 44 high-level state executives would have their positions eliminated under six budget bills that moved out of House appropriations subcommittees Tuesday morning. 

The House budgets — all of which moved to the full House Appropriations Committee on party-line votes — also require departments to issue periodic legislative reports on severance agreements with employees. 
State officials couldn’t require residents to get a COVID-19 vaccine before delivering them a state service. And state officials are forbidden under numerous House budgets to create a COVID-19 passport that residents could show as proof that they have been vaccinated. 
The House also cut out nearly all of the governor’s proposed new spending pitches, most significantly workforce development programs like Michigan Reconnect and Futures for Frontliners. High water infrastructure grants were taken out of the Department of Environment, Great Lakes, and Energy budget, $20 million for contaminated cleanup and $235 million for wastewater treatment upgrades. 
Overall, the House Tuesday morning moved out six Fiscal Year (FY) 2022 spending bills. They were budgets for the Department of Agriculture and Rural Development (MDARD), Department of Natural Resources (DNR), Michigan State Police (MSP), Department of Military and Veterans Affairs (DMVA), Department of Environment, Great Lakes and Energy (EGLE) and General Government, which includes spending for nine different departments and entities. 
House Appropriations Committee Chair Tom Albert (R-Lowell) said quarterly budgets would not be used for education, public safety, and certain areas of the Department of Health and Human Services. 
He said quarterly budgeting is common in businesses and even many families to keep finances on track. 
“It makes sense for state government to use a similar process,” Albert said. “It will help us ensure, on behalf of Michigan taxpayers, that their money is spent as intended.” 
Budget Director Dave Massaron called the three-month budget approach “particularly silly” and something that doesn’t work particularly well in the private sector. 
“It’s odd that former Gov. (Rick) Snyder received praise for bringing a long-term view of budgeting to state government, yet now they want to implement a three-month budgeting practice that has never been done before,” Massaron said. 
Still, Massaron characterized the budgets as part of the normal process of each chamber staking out its position before all sides get together for target setting after the May Consensus Revenue Estimating Conference. 
Tuesday, quarterly budgets were recommended for MDARD; DNR; EGLE; the Attorney General; Department of Civil Rights; Department of Labor and Economic Growth (LEO); the Secretary of State; Department of Technology, Management and Budget (DTMB) and Treasury. 
During the FY 2020 budget, the Legislature moved the concept of rolling out the Attorney General’s budget into 50 line items and then requiring her to come in quarterly on how her department was spending money.  
This year, the Attorney General’s budget is being unrolled into 47 different line items. 
The positions eliminated from the departments’ allotted unclassified positions, which are higher-level assistants who tend to be more political at-will employees. Combined, the elimination of these positions will be roughly $6 million and would take many departments from having six political appointees to just one – the director. 
Unclassified positions were cut out of EGLE (5), DMVA (5), MDARD (5), DNR (5), Attorney General (5), Civil Rights (5), LEO (5), Department of State (5), and Treasury (4). 
Kurt Weiss, spokesman for the State Budget Office, noted that unclassified positions are constitutionally established so “we are not sure what the thinking is here on the part of the Legislature.” 
Over at DMVA, Deputy Director Fred Shaible, once a lead staffer for a Republican Senate Appropriations Committee chair, said the unclassified positions in his department included the head of DMVA, the director of the veterans’ homes, and the assistant adjunct generals charged with overseeing the Army and the Air Force. 
“These are all very important positions, so who would they like us to fire?” Shaible asked. 
A discussion on the quarterly budget concept broke out at the Appropriations Subcommittee on Agriculture and Rural Development and Natural Resources Tuesday morning as members looked at a DNR budget that, on paper, was a 75% reduction. 
“I’m not aware of any significant concerns that would cause us to refrain from providing the budget,” Rep. Rachel Hood (D-Grand Rapids) objected. “I find this disruptive and disrespectful to the people who work very diligently on a very tight budget to support agricultural practices.” 
Committee Chair Sue Allor (R-Wolverine) said quarterly budgets “will allow for additional review at a later time” and increase accountability, efficiency, effectiveness. 
“So, there will be further evaluations going on as we proceed through the year,” Allor said. 
Hood asked Allor if she had dates for when the quarterly budget would be reviewed and whether other states are changing to quarterly budgeting. Hood called it “a very non-traditional approach.” 
“I don’t have those quarterly dates provided to me as of yet,” Allor responded. “. . . I have not looked at other states, but I do know that it is quite prevalent with regards to private businesses, just a better way of monitoring and knowing where their finances are.” 
Hood pushed back on a quarterly budget for the DNR as well. 
“Do we stock a quarter of the streams in this state? Do we only work on certain trails and certain watershed protection programs?” Hood asked rhetorically. 

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