This story was originally published by Bridge Michigan, a nonprofit and nonpartisan news organization. To get regular coverage from Bridge Michigan, sign up for a free Bridge Michigan newsletter here.
LANSING — In the days leading up to what turned out to be a brief state government shutdown in 2007, then-Gov. Jennifer Granholm warned that Michigan residents would feel the effects, especially if it dragged on.
Secretary of State branches, unemployment offices, parks, historic sites, the Library of Michigan and the Michigan Historical Museum would immediately close, she said.
Road construction projects would come to a halt. Paid admission sites on Mackinac Island would close, along with garbage and manure pick-up.
And a prolonged shutdown, Granholm warned, would delay state payments to local governments, schools and universities, along with financial aid payments to college students.
Michigan’s government did shut down that year, and again in 2009. But both occurred during the middle of the night, lasted only a few hours and were quickly resolved without major disruptions to state operations.
As Gov. Gretchen Whitmer and Michigan’s politically divided Legislature struggle to negotiate a state budget by the Oct. 1 constitutional deadline, it is not yet clear what a government shutdown would look like this year.
With less than three weeks left to strike a deal, Whitmer’s administration has begun planning for a potential shutdown, but little is publicly known about what that means for Michiganders and state services.
“While we have begun contingency planning for different scenarios, it’s still too early in the process to determine what a shutdown would look like,” Lauren Leeds, communications director for the State Budget Office, said this week.
“Our focus remains on enacting a full budget that protects Michiganders and our economy,” Leeds told Bridge Michigan in a statement. “We’re continuing ongoing negotiations and we’re hopeful that we’ll have a deal in place by the deadline.”
Here’s what we do know:
Layoff notices coming
Under labor contracts, Michigan will likely have to notify unions of any potential layoffs that would result from a shutdown within 14 days of the new fiscal year. That would mean Wednesday.
“At this time, none of our affiliates have communicated to us that they've received layoff notices,” Leah Leszczynski, press secretary for the Michigan AFL-CIO, told Bridge in a text message earlier this week.
Layoff notices went out around this time in 2019, when the Whitmer administration sent out tens of thousands of layoff notices in mid-September ahead of a potential government shutdown. The governor eventually avoided a shutdown by signing budget bills at the last minute but vetoing more than $1 billion in spending proposed by the Legislature.
In 2009, the Granholm administration sent layoff notices in late August. Notices went out early in 2007 as well, but about 35,000 state employees were formally told not to report to work days before the actual shutdown occurred.
What the state did back then — particularly in 2007 — should provide “pretty good, practical guidance” on what might happen later this month, said Liedel, who worked for Granholm during both shutdowns.
That means about two-thirds of the state’s roughly 50,000 workers could be laid off from agencies including the Department of Agriculture, the Michigan State Housing Development Authority, Department of Civil Rights, Department of Education and more.
Employees working during a government shutdown are entitled to backpay, though Liedel said lawmakers must first approve the funds as a predominance of workers are paid from the state Treasury, which makes the vote an appropriation under law.
Asked if lawmakers are discussing that possibility this year, a spokesperson for House Republicans did not respond. Rosie Jones, spokesperson for Senate Majority Leader Winnie Brinks, D-Grand Rapids, didn’t address the question.
“We remain laser-focused on getting a budget completed and to the governor’s desk before the deadline,” Jones said in a statement Thursday.
‘Essential’ or ‘critical’ services
Absent a deal by the time the new fiscal year starts on Oct. 1, the Whitmer administration will have to decide what “essential” services need to continue even if other parts of state government shut down.
In 2007, Graham said state police and prison operations would continue, unemployment checks would still go out, welfare assistance would continue (but new applications would not be processed) and state courts would remain open for "emergency matters," among other things.
Whitmer was preparing to make similar decisions in 2019, her first year in office, when she ended up averting a shutdown by signing — but vetoing large parts of — budget bills she had not fully negotiated.
At the time, the Whitmer administration said more than 150 road construction projects would have been halted, parks would have been closed, lottery games would have stopped and the state’s Liquor Control Commission would have stopped accepting retail orders for spirits once the government shuts down.
But “critical functions” of state government would have continued, including:
- Prisons, parole and probation services. State police patrols, although special operations and investigations would have operated “at a reduced capacity”
- Cash, food, child care, disability and family foster care payments. Unemployment services. Child protective services, child welfare programs, child support collections, adoption subsidies
- Medicaid health services, though health care providers treating Medicaid patients would not have been paid until a budget passed
- The state’s five psychiatric hospitals, forensic centers (which provide psychiatric evaluation and care for criminal defendants), juvenile justice facilities and veterans’ homes
- Emergency response and other “health/safety functions” — but at a reduced capacity.
- Mackinac, International and Blue Water bridges would have remained open
Schools in limbo
For most of the past decade, lawmakers and the governor have finalized an education budget by July 1 to align with when the fiscal year begins for K-12 schools. That didn’t happen this year despite a deadline written into state law.
As a result, school districts “are being forced to approve placeholder budgets that don’t reflect reality” as they wait for final figures from the state, Clinton County RESA Superintendent Scott Koenigsknecht said this week.
Without a budget in place by Oct. 20, schools would miss their first scheduled state aid payment of the year, Lansing-area education officials warned parents this week.
Some districts say they’re even considering taking out high-interest loans in an effort to stay afloat during a potential shutdown.
The lack of a timely budget “means programs may have to be cut mid-year, staff contracts renegotiated and students being caught in the middle of a political food fight,” Koenigsknecht added.
“In smaller districts like ours, even a handful of unfilled positions or a delayed state payment can have a huge impact,” Coby Fletcher, superintendent of Escanaba Area Public Schools, said in a recent roundtable. “We’re talking about whether we can run bus routes, keep class sizes manageable, and maintain arts and athletic programs.”
A crisis point
Sen. Sarah Anthony, a Lansing Democrat and chair of the Senate Appropriations Committee, told reporters early Wednesday that while lawmakers are “trying to avoid” a shutdown, the state is “at a crisis point” when it comes to the budget.
Part of the issue stems from Democrats and Republicans proposing budgets from different vantages.
Democrats are arguing for a spending plan that, similar to Whitmer’s, would increase government spending relative to the current fiscal year. Republicans, meanwhile, are arguing for cuts in anything from state employee levels to spending to diversity, equity and inclusion measures.
Another complicating factor: Both Whitmer and House Republicans have proposed plans to increase state spending on highway and road repairs by $3 billion annually. Senate Democrats have criticized other spending cuts the GOP plan would force but have not proposed an alternative.
Negotiations have picked up behind the scenes, but so far, neither side has hinted at a potential agreement.
“I'm not looking forward to a shutdown,” Anthony said. “We are trying to make sure that we're preventing that every single step of the way.”
This article first appeared on Bridge Michigan and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
