Welcome back to OTR a very special week, this week.

They do have a budget deal at least a framework for saying what does that mean?

A correspondint' edition is up with Kyle Melinn, Clara Hendrickson Beth LeBlac, and Bill Ballenger sitting with us as we ge the inside out, Off the Record.

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

Thanks very much.

Welcome to Studio C. Well guess what boys and girls have we have is a little bit of stuff to talk about.

But when you first heard they had an alleged dea framework, what did you think?

I thought well I thought they were pretty close because it came right after they passed legislation last night that would put a wholesale tax on marijuana and that seemed to have broken the ice.

It was sort of a sign of good faith from Republicans after Senate Democrats had been demanding some kind of revenue increase for a while.

This is sort of a olive branch of sorts, but I was a little bit confused by the release because it was very carefully worded.

Tim.

They they agreed to have they agreed to have a deal by October 1st.

And the details of that deal are still very much to be determined, o at least they're not releasing them publicly at this point.

So the top line how how, ho much the total is going to be.

Hall said yesterday that it's going to be below last year's which was 82 and a half billion.

But besides that, we don't have a firm number.

There.

And then there are a lot of other questions that that weren't answered in that press release.

What did you.

Make of it, Kyle, when you first heard it?

First heard it?

Well, at least they're making progress.

I mean, what we have here is the Republican and the Democrats came together begrudgingly, I think, for the Senate Democrats on a road funding deal, $1.85 billion per year going forward a mixture of cuts and revenue, the the marijuana wholesale tax, as Beth mentioned, and then making sure that everything that is collected at the pump goes to roads, which is something that everybody finally agreed to.

But as far as like the actual budget now, we still don't have targets.

As of last night, we didn't have target numbers where the House and the Senate and the governor all said, we agree this is the number we are willing to spend.

The speaker was not abl to give us what that number was.

He said it's still being talked about a little bit.

So, you know, while the governor expressed optimism that they can get a deal on October one, it's still optimism.

They've got a road funding deal, but that's it right now.

Yeah, of course, there's still a lot to be worked out here.

But my first thought was that we might get our first bill signing of this legislative session.

And Governor Whitmer has really carefully crafted this national reputation as someone who can broker these bipartisan deals.

And she's repeated often that she's gotten budgets done with Republicans in charge of the legislature and with Democrats.

It's a major task with a divided legislature to actually get a spending deal together.

And meanwhile you have a potential successor in Mayor Mike Duggan, who's making the cas that Lansing isn't functioning.

And so if they can do this, it allows everyone to say the system is working.

They're not going to be pointing fingers at each other, you know, blaming one another for who's responsible for a shutdown.

They can each take credit for what little gain they got and can can claim credit for in the budget.

I want to come back to that point later on to building your reaction?

Well my reaction is they got a vote.

I mean, isn't that a major part of the legislators job next week?

I mean nothing has really happened yet that show this is actually going to occur.

We may be premature in our jubilation that they seem to have reached a deal in that maybe October 1st will come and go and they will not have the budget.

Well, we're about to see if legislative leaders can instill on the body politic caucus discipline, which is code for you're voting for this or not.

Right.

Isn't that how it's done?

That used to be the way it was done.

Well, can they replicate that?

Possibly, Bu they can also un-replicate it.

If when I spoke to Mr.

Hall last night after the news conference, he said and he was being pejorative about this, but he said it's really now up to when you bring to deliver the votes in the Senate.

Don't we assume that since she and the governor are now simpatico, that they wil deliver the votes in the Senate?

Yeah, I mean, I thin that's the hope for next week.

And I think Hall has shown he was able to get, you know, that those budget bills last night or the tax bills they passed by wid margins on a bipartisan basis.

I think Brinks I mean, she has to show she can deliver next week, too.

And I think that I think that some of the the lawmakers in the Senate are a little disgruntled with this plan.

I think Senator Irwin has his voice, some some disagreement with some of these tax moves that they made last night.

So I, I feel like there there might be, you know, still some votes to win over.

But if they have a deal, they have a deal.

Well it feels like to me that they're building the airplane in flight.

I mean, it doesn't feel like that.

I mean, yeah we're we're off and running, but we still got a lot of, you know, details to work out.

I don't know.

I think they got a lot to work out.

You know, for the Senat Democrats, though, I mean, they they came to this roa funding question very dubious.

And very hesitantly, because for them, making sure that kids are fed, making sure that they're social services, those are their priorities.

The roads haven't ever been the Senate Dems priorities.

So so rather to be a deal on roads, they're not going to be the ones who are going to jump up and down and say, hooray.

They're now working, saying, okay, we're going to go ahea and we're going to swallow this, but we want this and we want that.

We don't know what this and that are right now, and maybe they don't either.

Well, it complicates that budget discussion because that is the leverage that they're looking for in the budget, because that stuff is their priority.

So we're going to hav some horse trading going on here over the weekend and leading up to any vote.

Yeah, I mean, to Kyle's point, I think it's really clear last night that Governor Whitmer i getting her road funding plan.

You know she has repeatedly said there's no budget deal without a road funding deal.

Speaker Hall gets the clai cutting waste, fraud and abuse.

And I think the question mark is what are Senate Democrats getting out of this deal?

And the other big question is, where are the cuts going to be made?

And Speake Hall talks about doing a 1 to 1, making sure that any new revenue is matched by equal cuts to funding.

But it's not immediately obvious which Senate Democratic priorities are going to be a part of this plan.

Well, and the other big thing is that $1.1 billion that is now coming off at the pump that used to go to schools and municipalities, that is not there for them with the promise it will backfill i by going into the general fund.

Do you understand what that means?

They got to find $1.1 billion laying around somewhere to keep the schools harmless.

If you're a super watching this right now, are you at home saying that was close or are you going, Oh, my God, I can't believe they're going to go to the general fund?

Yeah.

You know, part of this is also there's there's something during though, as part of the one big beautiful bill there was some special exemptions that were given to businesses on equipment and stuff an extra tax write off for businesses that was supposed to also carry through to the states.

And so that the state governments were also goin to have to offer these special rebate, not rebates, these tax breaks on purchases and so forth.

And what the legislature agreed to yesterday is that we aren't going to do that.

We aren't going to offer those same kind of breaks.

It's the technical term is decoupling.

And that's actually going to save the state.

What, about... The payments are not eliminated.

Yeah, right.

So it depends how you want to word that.

But Yeah.

Well, that's an important word.

What is there?

It's nothing.

But we get it longer over time.

Decoupling.

Right.

So.

But is that are they going to be eliminated or are they goin to be stretched out over time?

But regardless, they're no going to be offered immediately.

And so there is a saving and that's part of the backfill.

Well, we'll see.

All right.

I want to ask get back to a point, Claire, that you raised earlier is a big loser in this debat and this alleged deal framework.

Mr.

Duncan.

Yes.

If a deal gets done, that's reasonable, he will lose a lot of his clai that I am the only one who can really fix the mess in Lansing.

When you say he will say and the governor, we did it.

You think the same way.

I mean, I don't think all dysfunction in Lansing comes back to dug in at the end of the day in his chances.

I think, you know, he'll play off whatever happens i Lansing at the end of the day.

And it is true you know, they may pass a budget before October 1st, but they're three, four months past the July 1st deadline.

So, yeah, but it's not the sam as shutting down the government.

I mean, really, the commercial, I couldn't see it.

I'm sure they've already got it queued up and written.

I think it takes one to tak some of the air on an envelope and then it.

Gives him one less example to campaign on.

But, you know, take your pick.

He has plenty of other things between lame duck.

He's talked about the cell phone in classrooms, legislation faltering.

Plenty of things that he can pick and choose from examples of where bipartisanship kind of fell apart.

One one other thing, too.

We still got the federal government that could shut down, too.

And I know that's different, but in the minds of voters who just see the federal and the state government as all as one and don't really differentiate between the two like we do.

They may also think of we just need somebody to clean up this whole mess.

All right.

I have a theory that I want to leave before you, that the seeds for this alleged deal and framework were laid on two occasions, one last December when the governor said she was going to cooperate with Donald Trump.

And two, when they did put together the legislative packag on the minimum wage and the tip.

And my point here is this.

Matt Hall watched her governors comments.

Okay.

The two of them have forged.

Do we agree or not?

A good working relationship.

Can I get an amen?

Amen.

Beth, I don't see your lips moving.

Well, it's not it's not love and joy.

I will say that it was cute, but as you know, the legislative process only works when you develop two things the relationship and the T word trust.

And so when that signal that she sent on Trump, Mr.

Hall picked up on that.

And then the legislatur did solve against the deadline the thing which laid that.

And Mr.

Hawley said, I'm I'm fashionin what we're doing on this stuff based on what happened on minimum wage.

Is it a silly theory or not?

No, it's.

Not silly at all.

I mean, I think that's a great theory that he has been a great study of the system and he has used that to his advantage in the entire negotiating process.

As far as working the process, working the process, getting the message out, pounding home like certain priorities that he's wanted.

I think he's done a great job.

I mean, he's made waste, fraud and abuse a household term.

Listen, we have no question what the House wants out of this process.

They they don't want any more earmarks.

They want to cap the earmarks they want to get rid of saw.

They want to get rid of corporate giveaways.

They want to fund the roads.

They want to get rid of waste, fraud and abuse.

They've made that really clear and they've done tha through the negotiating process to forge in that relationship with the governor and then making the Senate Dems the the fall guys on the whole thing and makin them kind of the beating post.

And then and then kind of inflicting the hous and the governor's will on them.

And in the fact that they did get a road funding deal done before any budget priorities and budget spending was mentioned, I would consider that a win and and an example of a great study.

Yeah I think Tim it's a it's a good point that this legislature has proven itself capable o working up until the last minute and then getting a deal done and hall sort of being front and center with the governor and making that happen.

And I want to go back to Beth's point and take this July one deadline seriously.

It is a state law that they have to approve a state budget by July one.

So they've already blown past the deadline.

Even though the October 1st deadline is the real show.

But I do wonder if after all of this, lawmakers will try to come together and say, how can we avoid this last minute scramble from ever having to happen down the road?

I mean, one of the proposals that's been floated is suspending lawmaker pay If they can't reach a deal, but sort of wonder if they'll return to that and do a sort of postmortem here.

The answer is no.

No way.

I think they like their freedom.

Sure.

I'm sorry, Clara.

Nice try.

We can all hope.

But, you know, the one other thing.

I mean, I think you're correct that that whole kind of read the room when when Whitmer spoke about trying to build bridges with Trump last year, I think what he also does well is he can kind of driv a wedge where he sees a crack.

And if he saw a crack between the governor and Democratic led Senate and he drove a wedge in there and you saw that his his critiques and pres conferences were very targeted and they were meant to widen that gap between them.

And I think he got unde people's skin and I think it did exasperate it.

There's one element I think we need to explain to the people as they sit last night, there's a one for one exchang for every new dollar of revenue.

Remember the Republicans said we're not we're not going to raise revenue.

Well, here they are voting for revenue.

But Mr.

Hall's reaction is, yes, but we're getting something in return.

What's the 1 to 1 me?

It means for every new dollar of revenue that's coming in, there's going to be a dollar equivalent and cuts that are made.

And we don't know what those cuts are.

I mean, that is the really big unknown at this point, a. Whole such disappoint, he said.

We get so much more done on cuts.

If we could just get those Democrats interested in getting rid of waste, fraud and abuse, well.

The package could have been higher.

Yeah, exactly.

And I just got to say, I love the idea in the legislative process when they started out this $3 billion number.

Okay, you know what?

If you know you can't reach it, you just say, okay, we're the target and nobody at home will know.

Okay.

It's a brilliant move.

It actually is, is it not?

It is.

It is.

What call has taken over a the dominant legislative figure.

He's been the strongest speaker, I would say, in terms of the big three that we've had in years.

And he's much stronger than Brinks and he's forged this relationship with the governor, which is very surprising to a lot of people, because he's a very partisan Republican, a very partisan Democrat.

Well you knew there was something up when they had that secret caucus meeting.

And this is where both the Senate and Democrat and the Republicans from the House got together in the Capitol and had a whole lis up on the board of tax increase.

The Democrats say, why are you smiling?

Take a look at these.

Which ones can you sell?

The fact that the speaker put that on the screen to discuss it was a signal that they're serious about raising revenue, right?

Oh, yeah, they were.

Because, you know, there's got to be some give and take.

It's not a Republican trifecta.

They would have they're going to have to give on something.

But you know, what's interesting here is that this that this road funding package, $1.85 billion, it's not $3 billion.

You got, what, 60, 70% of what you wanted.

It's kind of like about ten years ago when Kevin Cotter and Arlan Meekhof came together, they couldn't get the whole banana either.

They said, well, we got we got an extra billion dollar for roads.

So I bring this up to sa that the road funding question is not dead.

We'll be revisiting this anothe five years or some other time, some other point in time.

We're going to continue to talk about road funding because they didn't get to the magic number.

And, you know, there will be a loss of some jobs as a result of that, but not the 10,000 at the lowe lobby originally was pitching.

I'll just mention one other thing.

Voting to hike the wholesale marijuana tax, 26% is not the toughest vote on taxes.

Tough for the industry.

The industry's not happy.

They may not be happy but the rest of the population.

Well, the other thing I mean, you know, I think some Republicans don' care what the industry thinks.

So in that sense.

But but the idea is, is that i the industry isn't doing well, that tax doesn't perform well and doesn't return the revenue that they need.

So it is going to be interesting moving forward if if prices continue to plunge in Michigan, if more surrounding states start selling marijuana at lower tax rates, is this tax going to produce the revenue that they want?

And on top of that, sorry, just one more thing here, because that's one thing that you hear from the the road, folks, i that people are buying less gas and the ga tax revenue is not a sustainable long term source of road funding.

So, I mean, this is a conversation that is not dead just because lawmakers seem to have reached a deal here.

There's going to be future conversations about funding, tweaks that need well, maybe.

Their goal is 4 billion.

All right.

So they're halfway home now.

I seem to remember, too, when the marijuana folks were trying to get themselves legalized, the big argument for them was, well, just taxes and make all the revenue go to the roads.

You guys remember this pot for pot and pot for pot.

I mean, I seem to remember this.

So they're getting what they asked for and legalizing po is going to be a problem.

Yeah, but somewhere along the line they got religion, okay.

And it wasn't a good idea.

So the unfair question number 82, does the deal fall apart, yay or nay?

No, It' too big to fail at this point.

But that doesn't mean that doesn't mean we won't have some type.

We could have some type of shutdown on October one, but ultimately, it's got to look up to something.

I think tha you don't see a big announcement with all of the leaders like this.

If there is if they don't have the votes, I think I don't think it falls apart.

But I think there might be a supplemental down the road.

I think there'll be a shutdown, but it will be a brief duration.

Maybe our bills.

Bill, read my lips wrong.

No, not necessarily.

The last two times this was up, there was a shutdown.

You don't sign a piece of paper and go before the public.

Although the speaker was the only one going public last Done it.

They haven't done.

It.

Yeah, well, we'll see.

All right.

It could be a continuation.

I mean maybe they have to continue the.

Absolutely continue and for.

Done that by now.

Don't they run into a logistical problem of actually getting the bills printed to vote on?

That that may be the thing that messes up the works.

Because look I mean the guy have targets, right?

And once they get targets, then they send out their subcommittee chairs to come together.

And then those folk got to hammer out an agreement and then you got to get that bill printed and then you've got to get that out.

I mean, that process doesn't happen in seconds.

That happens in seven days.

Yeah.

And even even when they did the tipped wage legislation earlier this year and it was to see.

Yeah.

And it was right up to the deadline, it still took like several hours to get to the governor.

And all of us were wondering, is it does she have it yet?

Has she signed it yet?

And those were hours where that lot took place or went into effect technically, And I think so to Kyle's point there might be a few hours there where we're questioning what i the status of state government?

A profound question.

It has never been answered.

All right.

Let's talk about Mackina Island, a straw poll up there.

Let's indicate that a stra poll is not a scientific poll, but the lead out of that was is that John James did not finish first.

Are you surprised?

I mean, this is a small sampl of the most novel coronavirus.

Issues that is just absolutely beside himself.

You're going to be.

Based on money.

Right?

Right.

But this is not the Republican primary electorate.

So let's be clear about that.

And it's a very crowded field.

It's still very early.

Nesbitt does seem to sort of have the support of the insiders.

But when voters start to plug in to the fact that there is an electio next year, Whitmer cannot run.

And it's an open field.

They'll start to make up thei own minds.

And I think let me.

Just come back to our previous subject.

Eric Nesbitt has not said squat about any of this stuff on this deal.

Is anybody heard from him?

Not much.

Beth, have you heard cries?

Not since last night.

But he has been he has been vocal on the budget and of.

Course, he's been very vocal beating up on the governor.

Now all of a sudden, his governor has got to deal with his speaker, who he's a close friend with.

So what does Eric Nesbitt say?

Well, he hasn't said much yet.

I think some of that, though, is that he's waiting to see what the Senate Dems say and in reaction, because he's going to see what the Senate Dems do before he exercises his leverage points.

I. So back to the straw poll.

Well, I mean, Kyle wrote a really good column about John James this week saying this gu should have put this thing away six ways to Sunday, just like Mike Rogers.

Yeah.

I just like Mike Rogers from the U.S.

Senate and he appears to jus totally blown it at this point.

I mean, look, that was a signal that poll, not the fact that Nesbitt finished first, the fact that James finished fourth.

Right.

And, you know, he made excuses afterwards about why he didn't participate in the gubernatorial forum on the island.

What was the excuse?

He went to a mixed martial arts escapade.

Where the questions were easier and.

Apparently so.

The point is, he's run a campaign on fumes.

He's just on cruise control.

He thinks simpl because he's got the name I.D.

and he's got access to money, that he's jus going to cruise the nomination, I don't think is happening in the Republican Party among their leaders.

And the regular.

They start at the White House and work backwards.

He's got a problem with Donald Trump does.

And if Trump doesn't endorse him.

Or somebody else.

Or somebody else that, you know, al of their goes out of his blue.

Well, look, it's and it's not just because he showe a bit of arrogance on the island and didn't really do much and hasn't really done much up to this point.

What he did with Donald Trump is he said, I'm not going to run for reelection in a competitive district in McComb County.

And then in front of the camera, you heard him say we'll get you somebody instead.

Well, listen, he's got nobody.

The Republican have nobody in the 10th District except a guy, a very charming guy whose last name you can't pronounce.

And then you've got the son of a sheriff in a neighboring county who's also looking into it.

Hey, look, the Democratic fiel is really good in that district.

You got a mayor, you got somebod who is well connected in D.C., this race, a ton of money, and you've got somebody who's run county wide over ther and it's got some good name I.D.

and Christina Hines and then a couple other folks too, are pretty good candidates.

The the Republicans feel like John James is a abandoned that district.

But more importantly, they feel like he's abandoned Trump and that's where he's really getting into trouble.

They're saying you're screwed over Trump by doing this vanity project and you're not explaining it to us.

So you know what We got great options over here.

Nesbitt's good.

Leonard's good.

Cox is good.

Even Karla Wagner is good.

We don't have to go with you, and we're not.

So is he tone deaf?

I mean, I think if I can't get in his head.

But if I were to assume I would think he he believes it.

This insider politic on the island isn't important.

And whether that proves true or whether it proves false, I'm we'll see during the primary.

But I think he feels that he has enough popularity in the state or enough name recognitio that he can pull off a primary if is he upsetting Republican insiders along the way?

I think he is.

I think he's got the big head, Tim.

He's just arrogant.

He thinks I've come close twice statewide by winning, lost narrowly.

Now I'm a congressman.

I've got access to all this money.

I should cruise to this and watch.

It's going to happen.

He's got ten months to go until the August primary.

And the way he's gone, he's blown it big time.

And the other opponents in the race, I assume, will make an issue out of this.

The Trump factor.

Mike Cox is not shy and a retired guy.

He'll go after him.

I mean, they they could but they also might not have to.

I mean, this week provided a interesting example in contrast, where you have former House Speaker Tom Leonard coming out really earl with this massive comprehensive policy platform, sort of laying out his future vision for the state.

And then you have Jame looking backwards and grievances about the 2020 election, which he lost.

He's won two subsequent elections and going after Secretary Benson.

I mean, you can kind of see him skipping ahead to the general election and trying to tak on a Democratic opponent there.

But there has been this divide between looking forward and looking backwards.

And I imagine we'll continue to see that play out in the Republican primary.

One thing I want, I went back and looked at the results of the last few Republican straw polls and in the last time we had one in what was 2017, James Craig won it.

But we all thought that he was going to do it before he collapsed.

Second place was Tudor Dixon.

She won the nomination, the one before that bill shooting versus Brian Kelly.

Bill showed he won the stra poll, won the nomination, 2009.

We had Cox, Hoekstra, Bouchar and some guy named Rick Snyder running in that straw poll You know who won the straw poll?

Rick Snyder.

So I guess the unscientific poll is scientifically, I guess I missed something in the translation here.

Anyway, we should take our guys great show.

Let's see, next week's show should really be interesting to see if they get this stuff done.

Thanks for tuning in.

Thanks to all of you.

Everybody have a peaceful weekend.

Thanks.

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