Governor's Budget Cuts Hit Close To Home; Will They Remain?

A recent round of state budget cuts by Michigan Governor Gretchen Whitmer could hit close to home for numerous Traverse City programs.

At the beginning of October, Whitmer used 147 line-item vetoes to eliminate nearly $1 billion from the state’s 2020 budget. Experts suggest the vetoes were a political move and that many of items could be restored through supplemental budget bills. Whitmer has argued that the Republican budget underfunded three key state departments – Corrections; Technology, Management, and Budget; and Health and Human Services – in a way that would jeopardize public health and safety.

In one of her biggest vetoes, the governor cut all $37 million that had been allocated for Pure Michigan advertising. Trevor Tkach, CEO of Traverse City Tourism, tells The Ticker that losing the campaign would be extremely detrimental.

“If the state doesn’t find a way to fund the Pure Michigan program, it will have a devastating, long-term impact on the state as a whole, and not just on tourism,” Tkach says. “The Pure Michigan campaign is recognized nationally and internationally. If we turn off Pure Michigan, it will take decades to build it back to what it is today. It will hurt Traverse City. It will hurt Detroit. It will hurt Sault Ste Marie. It will hurt everyone.”

Pure Michigan launched in 2006 with an annual budget of $13 million. By the 2019 fiscal year, the budget had tripled to $36 million. Economic impact reports for the campaign have generally been favorable – albeit, occasionally called into question for their accuracy.

In education, Whitmer slashed funding increases for charter schools and career and technical education (CTE). The vetoed charter school funds total $35 million statewide and would have meant a per-pupil funding increase of about $240 for all charter schools. Locally it would affect Woodland School, Old Mission School, Grand Traverse Academy, and the Greenspire School.

In CTE, Whitmer vetoed a $5 million increase in per-pupil incentive payments, as well as a $16 million grant program for CTE equipment. Pat Lamb, assistant superintendent of CTE and community outreach for the Traverse Bay Area Intermediate School District (TBAISD), says these changes won’t have a direct or immediate effect on the TBAISD Career-Tech Center (CTC). But he thinks the impact could be felt at the home-district level – students attend the CTC from “home districts” throughout the five-county area, including Traverse City Area Public Schools (TCAPS). Right now, TCAPS and other districts receive up to $50 in funding for each student that attends a CTC program in a “high-demand” trade. The $5 million per-pupil incentive program would have doubled that amount.

As for the $16 million equipment veto, Lamb notes that the cut would likely have cost the CTC a major $583,000 state grant if it had happened a few years earlier. “You hate to see it go, because there may be a time when we have that need again,” he says.

Also gone for now is $2 million for 10 Cents a Meal, a matching grant program that gives school districts incentives to purchase Michigan-grown produce as part of their cafeteria programs. Traverse City’s Groundwork Center piloted the program across seven local districts in 2013; by the 2018-2019 school year, the program had $575,000 in state funding and was in 57 school districts. The $2 million that was initially set aside in the 2020 budget would have enabled statewide expansion.

“We're hearing from people in Marquette; we're hearing from people in Detroit; we're hearing from people all across the state who were really looking forward to this program finally being…available to school districts statewide,” says Diane Conners, a senior policy specialist with Groundwork. Conners is hopeful the program will end up being restored, in part because Governor Whitmer touted it in her campaign materials. “I do believe she sees the value in it,” Conners says.

Munson Healthcare would need a significantly larger budgetary reprieve. The vetoes collectively cut more than $150 million in grant funding and Medicaid rate increases to rural hospitals and obstetricians. Munson Healthcare President and CEO Ed Ness says the Munson system is likely “the most impacted by these cuts of any healthcare system in the state.”

“We didn't see this coming,” Ness tells The Ticker. “The policy issue – the support for the rural hospitals – was something that both the Democratic and Republican side of the legislature supported. So, we have [that money] in our budget for this year, and we were very surprised to see it cut.”

Munson estimates that the cuts will amount to approximately $5.3 million across its nine hospitals, including $2.15 million at Traverse City’s Munson Medical Center. Ness says the organization is working with legislators and the governor’s office to get the vetoed programs restored. Both the House and the Senate have introduced supplemental spending proposals that could put most of that lost funding back into the budget. In the meantime, Ness says each hospital is working on its own “contingency plan.”

A statement issued to The Ticker by Chelsea Lewis, Whitmer’s deputy press secretary, says Whitmer’s initial budget “reflected the right priorities to protect Michigan families and public health, and included funding for the Pure Michigan campaign…Governor Whitmer is already working with [Democratic] Senator Curtis Hertel Jr. to pass a supplemental (measure) that includes Republican and Democratic priorities to restore critical funding for public safety, public health, and public education…”

Photo courtesy of the Gerald R. Ford School of Public Policy, University of Michigan.