Senate Appropriations Committee Chairman Jim Stamas and House Appropriations Committee Chairman Shane Hernandez on Friday called on Gov. Gretchen Whitmer to issue a new executive budget recommendation for fiscal year 2021 and to sit down with legislative leaders to begin state spending reductions immediately to balance the current state budget.
“The combination of coronavirus and the governor’s stay-at-home lockdown have caused a reduction of over $3 billion in state revenues this year, and it continues to get worse,” said Stamas, R-Midland. “While the governor has time for regular press conferences and appearances on national news shows, it’s time to put a priority on resolving this budget crisis. I stand ready to work with the governor to enact a budget correction plan as soon as possible that puts Michigan families first. Every day she waits leaves us with fewer options and less money.”
The legislative budget chairmen on Friday sent a letter to the governor with their request after the state fiscal and economic leaders at the annual May Consensus Revenue Estimating Conference projected reductions in state revenues of $3.2 billion in FY2020 and $3 billion in FY2021, which starts on Oct. 1.
“Today’s CREC report confirmed the budget-impact numbers we have been hearing for weeks,” said Hernandez, R-Port Huron. “We have a massive revenue shortfall brought on by this economic shutdown that will affect our families, schools, local governments and vulnerable citizens. The people need to hear from the governor what her priorities are that reflect this new reality facing our state. Time is of the essence and we look forward to resolving this challenge.”
Stamas said that a $3 billion revenue reduction represents over 30% of the remaining resources in the General Fund and School Aid Fund for the current fiscal year.
“The challenge is extremely daunting,” Stamas said. “For example, if we cut state employees by 30%, cut the remaining payments to public universities, community colleges and local governments, and cut Medicaid coverage in our state, it would cover just over half of the shortfall. Again, those are just examples to illustrate the gravity of the problem we’re facing.”
Hernandez said, “This budget hole will continue to get bigger if we cannot come together and protect our citizens while reopening our economy. We are ready to do the work necessary to move Michigan forward.”