Last week, Gov. Rick Snyder unveiled a proposed $50.9 billion state budget for the upcoming fiscal year. That represents a 5.8 percent increase over the current year's $48.1 billion in spending.
All state budgets proposed by Michigan Governors face hurdles. Many of these hurdles are obvious from the start. Other hurdles arise as the legislature goes through the process of sorting through the details.
At first glance, the budget Snyder presented includes two conspicuous items he is likely to have trouble getting lawmakers to approve. They are:
● His call for $1.2 billion in new transportation dollars for roads and bridges.
● His call for an expansion of Medicaid, to put Michigan in line with the federal Affordable Care Act – also commonly known as Obamacare.
Many Republicans can be expected to resist casting their votes for the Medicaid expansion. Both Republicans and Democrats will look for detours around the road funding plan.
Snyder uses a two-year budget process. That means his most significant budgetary initiatives and reforms are proposed in the odd-numbered (non-election) year. In the even-numbered year the budget more or less follows through with the previous year’s plan.
In 2011, Snyder made bold proposals to change the structure of Michigan’s tax and budget system. At the time, many observers believed he was over-reaching. Despite the predictions of doom, the legislature ultimately passed most of the measures he asked it to pass.
As in every year, the budget process in 2011 included compromises. Undoubtedly, some of those were prearranged changes that Snyder’s administration had foreseen. Usually a proposed budget includes things the administration assumes the legislature will either get rid of, or alter. What an administration asks for can be very different from what it really expects to achieve.
There are a couple of big differences between 2011 and now. In 2011, the House was overflowing with new Republican lawmakers, fresh from the victories of 2010. With few exceptions, these GOP House members were ready to go along with their new Governor.
After all, Snyder was the guy with whom the new lawmakers had ridden into office. They shared a common cause, which was to reverse the dismal trends of the Granholm years. “Reinventing Michigan” was the phrase of the day and the House Republicans couldn’t wait to help Snyder do some reinventing.
Though there were aspects of Snyder's 2011 budget that were politically hard to swallow, House Republicans were sold on the idea that his overall plan was a good one.
To a large extent, in 2011, Snyder only had to cut deals with the more seasoned Senate. Having an accommodating House from the get-go, was a major – and underrated - factor contributing to his 2011 success.
Things could be different this time around. Most of the Republican House members are returning members. They've gained a lot of experience the past two years. This time around, it could prove a lot harder to persuade them to go along with Snyder’s game plan. It seems likely that, on the tough political issues, their first instinct will be to try to bargain and look for alternatives.
On the Senate side of the Capitol things are also different now than they were two years ago. In 2011, the Republican lawmakers were a lot further away from their next election. This year, they know they'll have to be accountable to the voters in about 14 months, when primary elections will be looming.
Against all of this, Snyder has replaced the 2011 luster of a new Governor with something that's possibly even more important. With his push for Right to Work and its enactment, he solidified a new image. It is probable that many Republican lawmakers now see him as a tough, gutsy leader. The previous image of him as a nerdy executive with interesting approaches to government has changed.
Being perceived as a strong leader pays dividends in an array of intangible ways. It is an attribute that should never be underestimated.
That said, there is a hidden threat of which Snyder and the Republicans should be made aware. What happens if the road funding tax hike results in an overall increase in Michigan taxes for Snyder's first term? Politically that could cause big problems.
That scenario would likely hurt the Republicans and Snyder across the board in 2014. It could put GOP primary voters in a very bad mood. In addition, the Democrats should be expected to play such a situation like a well-tuned violin. Any illusions that voters will swallow the idea that the increases were just to “user fees,” and not a tax hike, should be discounted as fantasy.
Snyder's announced plan to get $1.2 billion annually for road funding looks like it was designed to be trimmed back. Don't be surprised if he ends up compromising quite a bit on the plan. Lawmakers are already identifying existing funding that would reduce the tax and fee hikes. The amount of these reductions will matter – and matter a lot.
On the issue of expanding Medicaid, yes votes cast by Republicans could be poison. The theory on the political right is that the federal government really can't implement Obamacare. More to the point -some believe the federal government's only chance of implementing Obamacare is if individual states cooperate.
Further complicating the issue for Republicans is the fact that federal dollars are tied to the expansion. This looks like a “why did I ever want to run for office?” situation if ever there was one.
Snyder's technique of doing the budget is to “roll it up.” That means that instead of having several individual departmental budgets, he puts the whole thing into two budget bills. One bill is for education spending, the other is for everything else.
Generally, this makes the budget easier to pass. Lawmakers can say, “It was a big bill. I didn't like parts of it, but overall it was necessary.”
On the other hand, a “rolled up” budget can be a two-edged sword. Using a separate, stand-alone bill - Snyder might be able to get enough Republican support to pass the Medicaid expansion, with the Democrats supplying most of the “yes” votes. But could he get enough Democratic support to pass the expansion as part of his overall budget bill? Not likely.
In 2011, when Snyder couldn't get the legislature to pass his New International Trade Crossing (NITC) bridge plan, he pulled it out of the budget. If he hadn't done so, the budget wouldn't have gotten finished.
Pulling the Medicaid expansion out of the budget and running it as a separate supplemental budget bill might be a possibility. However, this would be very awkward.
Regardless of how the budget process plays out this year, one thing's for certain. In Lansing, the arm-twisting season is just getting under way.
Jack Spencer is Capitol Affairs Specialist for Capitol Confidential, an online newsletter associated with the Mackinac Center for Public Policy (MCPP). MCPP provides policy analysis. The political analysis represented in this column does not necessarily reflect the views of the Mackinac Center.