Michigan Legislative Update




Budget Work, No-Fault Insurance Reform Highlight Michigan Legislative Discussions

While Governor Whitmer continues to press for action on road funding proposal as the linchpin to her proposed Fiscal Year 2019-2020 budget, Republican majorities in the House and Senate have chosen to start the budget process without that proposal, instead basing their version of next year’s budget on available projected revenues under current law.  As of this writing, the Senate has passed its’ FY 2019-2020 budget proposal, while the House is about halfway through that process to varying degrees based.

The Directors of the House and Senate Fiscal Agencies and the State Treasurer met on May 17 at their bi-annual consensus revenue estimating conference to update their revenue estimates for the remainder of the current year as well as for next year.  The parties noted that Michigan continues to enjoy modest economic growth, but revenue growth appears to be slowing.  Traditionally, once the May consensus revenue estimates are revised and agreed upon, the budget process accelerates towards completion by early July. 

However, this year is anything but traditional, with the Governor all but promising to veto legislative budget proposals that do not significantly increase road funding.  Both chambers of the Legislature have indicated they consider the Governor’s road funding proposal to be a separate issue from ongoing budget work.  The Senate Appropriations Committee does not include the new road revenue proposed by the Governor, but instead accelerates the phase-in of the 2015 road funding package by dedicating a full $600 million in general fund revenue to roads a year early, compared to the original target of dedicating $325 million in general fund revenue to roads in Fiscal Year 2020.  Governor Whitmer in turn immediately termed the proposal a non-starter.  As of this writing the House Appropriations Transportation Subcommittee has not yet enacted a budget recommendation.  

With respect to the DNR budget, following are some highlight’s in the Governor’s proposal:

  • An additional $2.2 million in available Forest Development Fund revenue to support additional positions and funding in forest management and timber market development,
  • An initiative addressing multi-year research projects on regenerating lowland conifers and upland hardwoods impacted by invasive species and eliminating competing vegetation from red and jack pine timber stands,
  • $550,000 for improvements to forestry and fire staff mobile devices including software upgrades and replacement costs, and
  • $250,000 in replacement of aging forest management and survey equipment.

The budget also authorizes $650,000 in forest development infrastructure for roads, bridges, culverts, etc. to maintain and improve access to state forest land, and the registered forester program is transferred into the DNR from LARA. 

The House and Senate DNR subcommittee proposals largely reflect the Governor’s recommendation (without inclusion of new revenue from the Governor’s proposed gas tax increase), though some differences of note in the House budget in particular are a proposed 3% reduction in administrative staff as well as including $100,000 in General Fund for an Oak Wilt outreach and marketing campaign.

As of all of this does not appear complicated enough, the House and Senate have each passed their own overhauls of Michigan’s no-fault auto insurance system, though neither version has yet hit the Governor’s desk. 

With all of the aforementioned variables in play, we may be in for a long summer in Lansing. 


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