Michigan House GOP's $79B budget boosts roads, cuts hospitals, police

The Republican-led Michigan House on Tuesday approved the final pieces of a nearly $79 billion annual spending plan that includes large cuts to Michigan State Police, the attorney general's office, civil rights operations and hospitals.

The chamber's spending plan, which would represent the smallest state budget since 2021, comes as the GOP-controlled House, the Democratic-majority Senate and the Democratic governor's office attempt to find middle ground amid their competing budget proposals.

The spending plan comes in nearly $6 billion lower than the Senate's $84.6 billion budget proposal approved in May and almost $5 billion lower than Whitmer's recommended $83.6 billion budget. Last year's budget came in at about $83 billion.

House Republicans celebrated the funding plan as a mechanism to address what they estimated to be billions of dollars in "waste, fraud and abuse."

"It sets member priorities for your tax dollars: roads, public safety and education," House Speaker Matt Hall, R-Richland Township said Tuesday. "We stopped the lobbyists and politicians and bureaucrats dead in their tracks and put the people first in this budget."

The vote in the House came the same day that Hall, Gov. Gretchen Whitmer and Senate Majority Leader Winnie Brinks, D-Grand Rapids, were scheduled to meet for the first time in weeks amid building frustrations over the lack of a final budget.

"I have made my disappointments and frustrations about entering September without a House budget proposal abundantly clear," Brinks said in a statement about Tuesday's meeting. "It’s 36 days until Oct. 1, and we have a lot of work to do. It’s work that we can accomplish, but the games and distractions need to end."

By law, a final, negotiated budget was supposed to be passed by July 1. But lawmakers were unable to reach a consensus and are now facing a Sept. 30 deadline to pass a negotiated budget or face a government shutdown.

House Republicans on Tuesday approved their budget plan largely along party lines, with the assistance of a lone Democratic lawmaker, state Rep. Karen Whitsett of Detroit.

House Democrats largely criticized the cuts in the budget and decried the lack of transparency in the passage of the spending plan, which they learned would be up for a vote about an hour beforehand.

"There was no time for us to caucus, there was no time for us to review an 800-page document to understand what exactly we were voting on," said House Democratic Leader Ranjeev Puri of Canton Township.

The total $79 billion House spending plan includes the $21.9 billion in K-12 spending and $2.4 billion in higher ed that was approved in June and the $54.6 billion for state government agencies approved Tuesday.

Included in the $54.6 billion spending plan is more than $3 billion in funding for roads and billions of dollars in cuts across multiple departments, reductions that have already rankled some groups set to lose funding.

Transportation boost; police, hospital cuts

Under the House Republican proposal, the state Department of Transportation would experience the largest funding increases. The department’s budget would increase from $6.8 billion to $10.2 billion, a 50% boost, in an effort to secure another $3 billion in long-term funding for roads.

Both Whitmer and House Republicans have been adamant about the need for long-term road funding and introduced plans to secure it. The Senate Democratic leadership has yet to propose a plan to fund roads and bridges.

Across the House budget, lawmakers eliminated roughly 4,300 full-time positions for a savings of $560 million. Republicans have argued the eliminated positions are regularly left unfilled within departments and the money instead is rolled over year after year, artificially inflating budgets and tying up money that could be spent elsewhere.

The largest reductions in the House budget would hit the Department of Labor and Economic Opportunity — which would drop from $2.4 billion to $1.3 million, a 47% cut — and the Department of Civil Rights would decline from $29 million to $13 million, a 53% cut.

House Republicans have long bemoaned corporate incentives and other grant programs distributed through LEO's Michigan Economic Development Corporation, such as the hundreds of millions of dollars given through the state's four-year-old cash-for-jobs program called the Strategic Outreach and Attraction Reserve fund (SOAR).

The biggest cut in raw numbers contained in the spending plan would be for the Department of Health and Human Services. That department’s funding would plummet by $5 billion or about 13% from $37.6 billion to $32.7 billion.

Those cuts are largely made up of federal and state-restricted Medicaid funds that were axed under new federal requirements that eliminated provider tax plans that inflated the amount of federal Medicaid funding that health care and insurance providers received. The roughly $5 billion in funds will be held in contingency in the event the governor is able to obtain a waiver from the new federal requirements, Hall said.

In a statement, Brian Peters, CEO of the Michigan Health & Hospital Association, said the House GOP budget "guts hospital funding and would be disastrous if even a semblance of the cuts eventually makes it into the state budget."

"We are extremely disappointed in the message being sent to health care providers to do more with less," Peters said. "Hospitals can only stretch resources so far before it impacts their ability to provide the care our communities need."

Hall dismissed the association's concerns, noting the House had also allocated about $250 million in federal funds for rural hospitals. He accused the hospital association of "getting a little too political" and "siding too much with the Democrats."

"I don’t believe them anymore because they cry wolf on every issue," Hall said.

Additionally, the office of Attorney General Dana Nessel, a Democrat, would face a 30% cut, and the Michigan State Police would see 7% cut.

The state police would lose about $66 million in funding and lose 433 positions. House Republicans argued Tuesday that a large portion of those positions were unfilled and could not be realistically filled within the next budget cycle.

But Hall also acknowledged the House has "a real problem" with Col. James F. Grady II's leadership of the department.

"This individual has been not doing a very good job with his department," Hall said Tuesday.

State Rep. Mike Mueller, a Linden Republican and retired sheriffs deputy who chairs the House Appropriations Subcommittee on the Michigan State Police, said the reduction is meant to penalize the state police's "serious leadership failures" for what he called favoritism and questionable spending.

But shortly after the budget’s passage, House Democrats sent out press releases targeting nine vulnerable House GOP representatives, arguing the cuts to the state police amounted to those Republicans voting to “defund the police.”

Republicans added language to Nessel’s budget that would require the Democratic elected official to seek approval from the Legislature, through an appropriation, to submit lawsuits against the federal government or against “any oil or gas entity.”

Nessel has participated in dozens of lawsuits against Republican President Donald Trump’s administration since he took office in January.

The House GOP budget also specifically required $2 million from the Michigan Supreme Court's administration line item to go to the Michigan State Appellate Defender Office.

The money would "support the financial impact of recent Supreme Court decisions which require resentencing of individuals who were sentenced to life without parole for crimes they committed at ages 19 and 20," according to the House Fiscal Agency analysis.

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