The government shutdown is averted and the new state budget is adopted.

Quite a week in our town and around the tabl to talk about world news, Craig Mauger, Jordyn Hermani, Zoe Clark and Bill Ballenger sit in with us as we get the inside out on this correspondents edition of Off the Record.

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And now this edition of Off the Record with Tim Skubick.

Welcome back to Off the Record studio C well our budget nightmare is over.

Sort of.

Yes, Steve.

They worked until about three or 4:00 in the morning, but got this copy done.

Let's talk about the winners and losers.

And they are.

I think the winners are a lot of longtime state programs that were on the chopping bloc in the House Republican budget that are going to maintai their funding for the most part, the losers, the marijuana industry.

Winners, I would say.

Whitmer ended up getting her universal free meals for all for students breakfast and lunch as its own line item.

So schools will not have to try and divvy out these payments between choosing between different things.

But losers.

If you were hoping as a U.P.

individual that would be funding for the copper wood mine, you'd be sorely mistaken.

Winners anyone who wants to call this a win and losers everyone in the process and transparency.

Oh goodness gracious.

Okay, go ahead.

I'd say marginally.

Mauger liked it.

Mauger liked it.

What does he know?

He hasn't got enough sleep.

Yeah I might not be the best slept.

You can tell, we're all little punchy here boys and girls Billy.

I'd say marginally.

The House Republicans, definitely the marijuana industry and the educational community.

Yes, they got a boost in the budget, but it was so delayed.

They're so angry at the whole process.

The winners are the state of Michigan.

People who don't know it, but they got bipartisan cooperation in a political climate where it was an anathema.

Oh, I know.

I look at I call me old school when the process works in the parties work together.

That is, in this climate.

This is something to rejoice about.

With the asterisks that it was marred by the fact that we went past the deadline.

Right?

I mean, two things can It's clos enough for government workers.

Okay.

The amount of oxygen that has taken up the weeks and weeks and let alone schools who on July one needed to know because that's when their budget year began this.

The schools are going to disagree.

And the fact that this process didn't necessarily happen in front of committees didn't take public testimony.

So.

Sure.

I mean, I hear what you're saying.

Absolutely.

On that points.

On transparency, they were boasting about transparency that was almost nonexistent.

Yeah, that was a big loss for this time around.

I mean, we passed the 24% marijuana wholesale tax in the literal middle of the night.

It was sometime between, what, two, three.

3 a.m.?

Yeah, not long.

Ago.

I mean, not very long ago.

No, bu yeah, I mean, if you would have showed up at the Capitol at any point during the day, Tuesday, Wednesday, Thursday, the marijuana lobbyists, the peopl who are actually in the industry that were packing the House and Senate, they were up in the Senate constantly There were folks with contact highs who were covering... Well, I can't attest to that.

But I mean, yeah, they were lobbying very hard, saying like senators stand strong and what did we do?

We passed this in the middle of the night, which does kind of seem like a little bit of a middle finger to transparency, frankly.

You think like five years from now people will look back and be like, man, they were so bipartisan when they waited days after the budget deadline.

They were calling each other names for months.

Not for a moment, but I just wanted to say it.

Billy can I get an amen from you?

No.

Goodnight folks see you next week.

Tough crowd.

Where did I lose control?

I never had it.

All right.

Why no?

Well, 2007 2009 is the same old, same old.

I mean.

Look.

No, no, it's not the dynamic.

The dynamics of the dynamics in this budget I have never seen before.

We've not had anything close over the over the year and what how contingencies was, how ugly it was for a time, how it was no cooperation.

There was this was very, very unique.

You think it was worse in 2007, 2009?

Remember the acrimony between Bishop and Granholm?

But that was only two of them.

This was the whole body was at odds.

Another difference was, I mean, we were in an economic crisis, right?

In 2007 and 2009, there was no.

Real need for what?

Just we had the money.

The money?

Was that what I was saying?

Completely different.

I mean, the acrimony betwee Jennifer Granholm and Bishop and Andy Dillon I was about to sa you could write a book about it.

Granholm did.

But she left out all the interesting stuff.

She did.

Economically speaking, though.

I mean, Craig just nailed i that this did not have to happen this way.

Right?

This was self-imposed chaos.

Manufactured chaos.

What was what was happening in 07 and 09 was Michigan was bleeding and dollars.

I remember talking about having to cu $1 billion from a general fund that at that point I think was 10 billion.

This was so much different.

Yeah, so much different.

Economically speaking.

A lot of social media and all all the scrutiny by the general media on what's happening compared to 2007, 2009.

So much more publicity.

Apples and kumquats.

Okay.

It's not even close.

I will say if you do want to give a win for transparency on anything in this budget, which is fair to say, There's the earmarks.

We are much more public with legislative.

These these pork barrel spending, these enhancement grants, whatever you want to call it.

For the first time, we actuall were able to see ahead of time who's sponsoring these things, how much money it is, where they're going.

I mean, if anybody has rea budget documents of years past, they're worded in incredibly ambiguous ways.

There weren't ever really names tied to them.

It was it was just a cluster to try and figure out where these grants were going, who to who sponsored them.

We've uncovered, for instance, with a Clare Health park some improprieties with the grant process.

So, you know, I will say we can't give a win on that part if we want to say that there is a bit of transparency here.

Good luck to the listeners sorting all of this out.

But I mean.

Some of these private projects, they didn't put out until like 12 hours or 5 hours before the budget.

People vote.

People voting on the budge did not see it until like 6 p.m.

yesterday.

I mean, they're being.

Asked they're being asked, you're going to vote for this or government's going to shut down.

What are you going to do.

When we use the word transparency?

There ought to be a distinctio between transparency, as Jordyn just described it, which is a true transparency that most people look at and transparency in terms of let's have it in the light of day.

The votes on the floor are not in the dead of night where nobody sees it.

Well, that's a totally different definition and kind of transparency.

So viewers ought to understand that.

And that's what I wa trying to get at for a second, where you're not wrong, I 100% agree with you.

I mean, we were in that committee hearing whipping through, you know, here's a lawmaker, here's what it is, here's how much money, here's a lawmaker, here's what it is, here's how much money that's not necessarily transparent.

You know, I can also just read names and numbers off of a sheet, but it does set a precedent in this budget moving forward that this is the wa that we're going to do things.

And I'm hoping trying not to be too Pollyannish here, though, that, you know, we just started this new process.

We're going to get on the tracks, the train is going to get moving, and hopefully this is going to be something that's streamlined.

I mean, there wasn't a committee hearing on the bill that will reshape the marijuana industry.

No committee hearing.

There is no open debate heard in the legislature that will be recorded into the future about where everyone's stood on that and what was said.

There was not open debate or at least in the Senate, on the gas gas tax change that could have ramifications for decades to come.

Could be something that lawmakers regret one day, maybe not.

We don't know.

I mean, they did not there were not thorough debates about these issue in the light of day that we saw.

Let me piggyback on that, because here lost in the translation here, taking the money off of the sales tax and giving it to the roads, that means that each legislature that comes back has to restore that money year in and year out.

This is a constitutiona guarantee that the schools lost.

That's a losing issue for them.

They have to fight every year to get that $1.1 billion.

Back, right?

Absolutely.

And of course, the whole, you know, sluggish process and missing the July 1st budget deadline, they're they're furious.

They're really angry.

Look, look.

But they're going to take they're going to look at they're going to take their check on October 20th.

They're not going to run with it.

They need to.

What else can they do?

Well.

What the school lunch program did make it through.

And I've got a set of piece and I want to give credit to the two players and you'r that you're about to hear from because they actually worked together.

Let's take a look.

We're goin to continue to make the argument that we think it's a waste of money.

It's something that is broadly popular.

The Democratic senato and the Republican House member had a very cordial working relationship, constructing the new K through 12 budget.

However, they were clearly at odds over the free lunch program.

Mr.

Kelly wanted to give a lump sum to all of the schools and let them decid if they wanted the free meals.

The Democrat wanted nothing to do with that.

We were never going to accept that version of the school meals program.

Because that's how it always was.

Schools could have.

Always given free breakfast and lunch to all kids, and they never did.

Show me the stats.

Show me the data that says this.

Look between SNAP benefits, federal meals where people going hungry.

Mr.

Kelly argues not all the kids need the free lunch, particularl in wealthy neighborhoods.

Why?

Because these people can afford this lunch.

It's it's been it's it' become a convenience for people.

On Thursday, lawmakers were still waiting to see the new budget in a printed version, seeing something before they could vote on it.

They argued.

The chairwoman of the House Budget Committee responds to that.

Well, I think that that i not unusual that we hear that.

I would.

Say that, you know, all along the way we have been very transparent.

Very open about.

What the framework is going to be.

Some legislative critics might argue there is a huge difference between reading a framework o a budget and the whole document.

Whoa.

What would you think of that?

I mean I think that House Republicans absolutely lost the battle over that issue.

The school lunches, I mean, they got they got it handed to them.

And in debating that topic, their point never made sense.

And I think that's one of the reasons that they gave in at the end.

And it became like we can see what topics are, who's reading our stories.

And there was so much interest in this issue.

Well because how else do you massage a message that says we think that kids should go hungry genuinely because at the end of the day, whether or not that' what you're willing to say out loud, I understand the argument that, you know, we shouldn't fund this in wealthy school district because while they're wealthy, their parents should be able to figure that out.

You don't know every child's individual circumstance.

You can't guarantee.

And I understand that, you know, well, if they want to fund it, they Camilleri where it makes a great point.

If they've always had this dollars available to them and they haven't.

Wisdom would sugges that that would be going away.

So much about budgets.

Right.

And when you start to hear from constituents and voters is impact and so much of what happens at the state level and the national level takes a while to trickle down to feel those impacts.

Right.

These debate, this conversation about free schoo breakfast and lunch is something that parents were feeling impact of because they were getting messages from their school administrators.

All of us saw the emails.

Crank I know you've got kids in public schools.

Maybe you're you got tens of emails.

This was something that people, whether they were paying attention or not, were were hearing and not just from the news, but from things that they have a relationship with in their everyday life.

And so it rose above.

We also can track what people are clicking on and interested in and over and over.

It's the thing that in real time have effect.

And they had a simple message.

Free school, free lunches and breakfast for everyone.

And then the Republican message was, we're not cutting it.

They can decide for themselves.

So they're not even defending policy.

Yeah, we're then pushing back because they were saying we're just not going to.

Well, that would be the decision because we can't.

The thing is too if you want to strip the emotional aspect out of the argument as well.

It's a difficult time financially to being an American family right now, too.

I guarantee you any one of us have gone to the grocery store in the last week or so and been like, Hey, these prices are crazy, you know?

And so if your government is able to help alleviat that burden even a little bit, why would you not want to take that win and say, hey, taxpayers, we understand that times are hard right now.

Let's use your money and help you help yourself.

I think it was remarkable in the 11th hour when Governor Whitmer sent out a memo to all the superintendents saying, you know, keep the school lunches going even if you don't have.

They didn't like.

That.

They didn't like it.

And they said back, you didn't give us any money.

We may cut out.

Stop telling us what to do and just do what you're supposed to do.

Bill brings up a very good reminder, which I think really what we have buried the lead in all of this was Oh, I don't know, Tuesday night when literally we all thought like, are we about to se like a constitutional conundrum?

I mean, like, that was the story Wednesday.

That's what you were hoping for.

What I was hoping for was some understanding of how state government was going to will itself into continued existence without either a continuation budget or an executive order or some kind of declaration from the governor about how the the government was still supposed to be spending money after 12:01.

It was a beautifully worded press release announcing that, you know, we're going to extend this and where when, but she didn't tell us how she was goin to keep the government open.

No.

And the point you're making is the Constitution, if she had signed an EO, whic she was smart enough not to do, there could have been a lawsuit as a result of that.

Well, yeah, but I mean, by the time the lawsuit went through the court of Claims appeals, Supreme Court, I mean, she would likely be out of office.

But they did the right thing and they passed a resolution through the House that says we will extend this in the Senate and pass.

But if that was the how.

Long, why didn't they do more?

Apparently, they didn't know it was.

I think I think they saw the response in the early morning hours of Wednesday.

People were not buying the idea that the government was just going to continu operating even just on its own.

And I think that, like really is not working.

We need to do something.

And I think that's why we got the.

Word.

I heard someone on the House floor You probably do say, well, it's you know it's only a government shutdown.

If you think it's a government shutdown.

Oh, really?

They were in denial.

The Constitution say you need a budget to pay people.

And the governor said you'll get paid.

Trust me, was the thing that was missing from that.

They were in denial for too long I mean, they just would not admit they could have a shutdown.

And finally, as you ar all saying, consternation struck after midnight.

And these are two in the morning end of the next fiscal year, we better pass.

And I mean, there were sort of jokes aside, people were sort of like, what do we called it from?

Was it Twilight?

Do we call it the Twilight period?

I think we.

We and I think that' an important point to highlight is we really avoided something that could have been precedent setting that's problematic for a long time for the law, for a long time.

And they were staring at sitting there, staring at the idea that we're just going to keep the government open without a budget, with the governor deciding.

Think about in the future if there's a Republican legislature, Democratic governor and the Democratic governor says, I'll veto your budget.

And because of what happened in 2025, I'm just keeping the government going on what I want to do.

And we could have also had a situation that I was really curious about.

What if Whitmer says, Hey, government stays open, but the courts say, well, we don't have a budget, we can't open the courts tomorrow.

And that does nothing to for the folks who are contract workers through the state, they stil contractually have to get paid just because you say report tomorrow does not mean that thei contract suddenly null and void.

The courts, if you go o what they have said in the past, would not have ordered the governor to do anything.

They said they could say what you're doing is wrong, but our hands are clean.

They could have said Hey, the Constitution says this.

We cannot open our door tomorrow because that's our job.

To read what the Constitution says and interpret it.

And there's no budget.

Just this synthesis of all this here is that we almost walked ourselves into a very serious precedent setting issue that we managed to somehow cartwheel our way out of the 13th hour with a stopgap bill that passed the Republican led House much earlier in the year an then finally the Senate Tuesday.

And one changed the subject slightly.

What they actually in the budget, don't the viewers want to know?

Yeah.

Can't we tell them.

This is not a mathematics program?

Okay.

I mean, you just read all this stuff like.

I have some of the numbers.

Okay.

The school aid budget is 21.3 billion.

Loose change.

The State Department's good, 52 million.

Higher ed gets 2.8%.

That's boring.

But the loser.

Yeah, that's boring is good.

What is interesting to you?

The loser here are the business community.

Did you read the press release from the chamber?

They're not super happy.

That's an understatement.

Decoupling and everything.

But those are going to be issues that play out.

I mean, those are some of th things this deal is based upon.

You're decoupling, changing the state's tax laws to not reflect tax benefits that Donald Trump, President Trump just gave businesses.

And one of these things like this issue was not debated.

They are taking out benefits for research and development that the federal government has been providing.

You are not going to get the same tax benefits in Michigan if you're doing research and development, if you're Ford and GM that you will in other states.

This has not been talked about.

So what is the calculation for Ford and GM?

Are they going to move research and development to state where they get the tax benefit lawmaker that there are no for speeches about that than I heard in the Senate?

There was not a committe hearing about that that I heard.

I mean, this is an issu that could have ramifications.

For a long time.

And you stuff.

Goes on behind closed doors between legislators.

They knew they weren't letting us know.

But that's not they know.

They don't know that they've done this.

Look you in the eyes and say some of the don't know what this is exactly.

On this.

We're in the legislature all week.

The amount of lawmakers or even staff who would come up to us and say, you probably know more about this than I do at this point.

And it started becoming less and less funny as the week went on and more and more concernin because like Craig pointing out between the decoupling tax, the marijuana vote, I mean, just the overall budget roads like there's so much that goes into this budget.

I've been in Lansing for you know, quite a while now, but I don't know if I've covered like a budget as complicated.

Yeah, but $1 billion worth of questions.

To Craig's point, though, just very quickly, about economic incentives, we also didn't talk about the fact that, yes, you know, Governor Gretchen Whitmer, the elusive road funding, like let's I'll just say from the beginning, she can now say she is fixing the damn roads and put a check by that.

No, I think that's the thing that she.

Can say that.

She didn't get the 3 billion.

So you can see how Republicans she did it.

Yeah, bu I think this is legacy building.

But her economic incentives saw there is not half a billion dollars in this next year anyway.

Are those gone?

But if what's in the budget massive cuts for business attraction and that was not discussed that you made if.

You were Michigan.

Yeah.

I mean it's like so what is the state's approach to the did they do they did they had.

Oversight hearings on.

That and.

They wanted to they, they proposed getting rid of Medicaid, basically cutting it.

So that was part of it.

But in the Senate, you did not hear Senate Democrats defend it or oppose it.

And what's the state's strategy now for attracting jobs?

And I think that's going to be a conversation that we will see Governor Whitmer continue to have.

Right.

I mean, just just this week, she was out she was in Canada talking about tariffs like economic development.

Is this aside from the roads, the sort of legacy, the state that she wants to lead?

So you've seen it outside the budget.

That's the thing.

If they think they're going to get this economic more economic development money separately down the road, that seems very unlikely.

So in other words, what you're seeing is Jim Blanchard's line about jobs jobs, jobs, jobs, not just jobs.

You know.

Remember John Engler opposed everything Jim Blanchard was saying then when he until.

He got on board.

Yeah, but honestly, you had Mik Duggan here several weeks ago.

He said I would get rid of Thor.

And he says medicine needs to be cleaned.

Up and do their job.

Cleaned up.

All right, Tom Leonard, running for governor, he says, I. Didn't really get rid of them.

And if you pick up on the outstate Michigan Republicans who were upset that the bulk of the money in the road package is going were not passed north of Claire is going down in southeast Michigan.

You pick up.

I did.

I mean, the more populated countie tend to be some winners in this in this kind of formula that they're setting up.

Another thing that was not litigated in this budget, where's all this money going?

How is it going to go?

And this was beautifully done because did the people in Southeast Michigan lawmakers have complained about public x 51 for years.

So what did they do?

They did it on the run.

They put 400 million in in the 51 act and then they created their own act, borrowed some new language from MDOT to get the money down in southeast Michigan.

Do you think this is going to be another interesting question?

She' going to say she fix the roads.

I have a feeling next year they're going to be asking for more money for roads.

But I got the guy on tape for have he's already got it on tape.

I mean.

You know, but.

Two weeks is quick like this.

But also, let's just quickly talk again sort of the public's interpretation of just like daily life.

Right.

Which is I think even without this funding I was having this conversatio Tuesday night, even before this, I think Whitmer could have gone I fix the damn roads and just the way that all of us over the summer driving into Lansing, when you hit barrel after barrel, the feeling is the roads are beef.

I'm just saying the the regular feeling is, wow, there's a lot of road construction.

The problem is, wait a minute, here's the problem.

All all politics is local.

If my local road is not fixed, the roads are not fixed.

Well there are so many construction projects happening around the state.

The real issu is that there's a funding cliff and the governor has pretty well explained the funding cliff because of the bonds that she set up.

And the real issue was, hey, we're going to have to owe all this debt.

The bond projects are going to end.

There's not going to be anything in a few years.

So this is part, I think, for her legacy, preventing that running off the cliff.

That's a benefit for her legacy.

If she goes so far as to say we have permanently fixed the roads, she's really doing it, doing some damage for the next governor.

She's not going to say.

I have no idea what she's going to say.

In.

General, too.

And I'll ask.

Her.

Thank I'll.

Ask you, fixing the roads, Governor.

Raise your right hand and swear that your fixed all the way that hands not.

Going up big regardless.

Of where the money is going mainly down south, not up north.

Still 80% of this new funding is going to local roads.

That was the big deal.

Yeah.

Where these last five, six years, it's all state highways, local roads.

Legacy building mode.

That's a big.

Why do the Republicans get any credit, particularly in the House, of changing the way they are doing the budget?

I cannot remember any budget where lawmakers said we went through every line item in this budget.

I do not remember anybody ever doing it.

Do they get credit for that?

Dang.

Well, they're getting some like the ghost employees and trying to force worker back into their place of work.

And this is money that.

Is occupancy in the buildings.

The state has got to fill this.

Post I to fix my money that went to departments to hire people that were never hired that they squirreled away as their sort individual rainy day fund.

And they found we supposedly.

Well, you don't think so?

No.

I mean, I think the connectio between the number of employees, if you really want to get into this, the key i and the funding is not as direct as they try to make it.

And that's what we got in this budget.

They only cut 2000.

They said there were 4300 or more of.

Do you agre that the Republicans did break new ground, though, in doing this budget?

I think they pointed.

Out some things that had not been debated before but I don't I think they might.

I mean, we'll see more.

We don't know everything that goes on.

But selling all of this is waste, fraud and abuse.

What kind of impact does that have going forward?

Well they never got their 5 billion.

They never expecte their 5 billion.

They took some.

And you got the $1 for waste.

$1 for.

Spending.

Yeah.

But I mean, these budget negotiations have to take place in the debate in the public has to take place.

In fact, in reality and what it is, that's how you get the best result, I would assume, if you're making claims tha all of this is fraud and waste and then you pass a budget that doesn't eliminate a lot of those things you were talking about, it raises some questions.

Mission accomplished.

Well, yeah, And I mean, here's the thing.

If this is the new normal, I think what needs to be more of the new normal is that the two chambers and this might just be, again, Pollyanna, need to work together, because I think one of the biggest setbacks in this was unveiling budget.

I'm thinking the higher ed, for instance, which had mass of like anti-woke policies.

They had big cuts for universities and we had to go straight back to the chopping blocks.

In Republicans.

The final budget raised university funding and doesn't have any of that anti anti you know woke language.

What a dull program.

Nothing to say that was fun.

Did you guys did you guys how did you guys find some energy okay give me some love.

Next week more of off the record will settle down by then.

See ya.

Thanks for tuning in.

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Coming up in the overtime segment at wkar.org an interview with Governor Gretchen Whitmer with her take on the state budget please stay tuned and go to wkar.org for that interview with the governor.