(Source: MIRS.news, Published 07/24/2023) Dozens of hours of MIRS research discovered more than $2.06 billion in next year's state budget dedicated to special projects that exclusively benefit a specific area or group, spending defined by some as "pork." The spreadsheet can be found here.
In the more than $81.6 billion omnibus budget bill, HB 4437, approved by legislators, MIRS found $1.69 billion was assigned to a special project or a particular non-statewide recipient. The budget review did not consider payments from the Michigan Natural Resources Trust Fund (MNRTF) as special project appropriations.
The House officially sent this bill to the Governor Monday giving her 14 days to sign it, which she's expected to do.
In the school omnibus bill, SB 173, for PreK-12 schools, community colleges and public universities, MIRS came across $375 million in special project spending.
MIRS zoomed in on an appropriation positioned to most impact a single municipality or organization, or a group of them, as opposed to a statewide program or grant program without pre-selected recipients.
Substantial items categorized as special projects by MIRS included a $233.2 million FY '23 supplemental appropriation (using federal COVID-19 recovery dollars) going to several communities – such as Eastpointe, Chesterfield, Delta Township, Midland and Hamtramck – and the Great Lakes Water Authority (GLWA) for lead service line replacement, wastewater infrastructure upgrades and other water system initiatives.
The $150 million FY '23 supplemental appropriation, backed by the General Fund, for assisting efforts to restart the Palisades nuclear power plant in Van Buren County was additionally labeled as a special project. However, the House Fiscal Agency (HFA) highlights that the $150 million would "be contingent on federal commitments of support to restart the facility."
A $50 million General Fund payment in the FY '24 state budget – under the Department of Labor and Economic Opportunity (LEO) budget – for a downtown project in Pontiac was considered a special project, as well as a $35 million General Fund award to fire stations in Grand Rapids and a $30.3 million award to a "Saginaw Economic Development Medical Center."
When asked about the topic of special projects, State Budget Director Chris Harkins expressed on Monday's episode of the MIRS Monday podcast that it raises an interesting question, clarifying "it doesn't mean that those dollars just go straight out the door, right?"
"That's a piece that's really important here, is that some of these sort of 'special projects' that we're talking about right now, those still need to be applied for and then, in most cases, a lot of these go through LEO and the (Michigan Economic Development Corporation)," Harkins said. "Some of that new transparency also says that they don't need to make more than 50% allocation at a time … that they're able to make sure that those dollars are being used as expected."
This year, the LEO budget featured $768.6 million in grant money under the headings of eight different programs.
For the FY '23 budget, there were three different grant programs carrying more than $665.7 million altogether. In the FY '22 budget, three pools of money allocated a combined $330 million.
Harkins said there's an assumption that when Oct. 1 arrives, dollars "just go out the door." However, he described that there's still a submission process for receiving money, and legislators and community partners must ensure state offices are appropriately informed before money is deployed.
Moreover, Harkins brought up the subject of one-time funding versus ongoing appropriations. According to HFA numbers, SB 173 and HB 4437 collectively deploy $4.9 billion in one-time money ($2.14 billion from the General Fund).
"So much of this year's budget also includes some of those one-time resources … I think it's fair to assume that as we look forward with some of our ongoing spending, that there'll be less one-time money available, just surely as a math problem," Harkins said. "We do know that this was a rather unique scenario with one-time revenue, so I think as we look forward, we're expecting that certainly those one-time pieces might not be as robust going forward."
The Governor's lead negotiator on the budget, Curtis Hertel Jr. (now a Democratic congressional candidate in mid-Michigan), steers clear from using the term "pork" while describing the aforementioned appropriations, believing it downplays the needed investments that were made in specific communities.
Hertel, the past minority vice chair on the Senate Appropriations Committee, said many of the communities to receive a boost in investment haven't been touched by state funding for decades. For example, he pointed to the Lansing region, where the Capital city itself is set to receive more than $130 million in the omnibus budget.
The budget allocates $5 million in General Fund dollars to reopen a historic swimming pool in Lansing's Moores River Park area. Hertel views this as an important community investment that improves people's lives, which he argues is a key function of government.
Wayne County will receive at least $377 million in special project funding, with more than $237 million of it going to Detroit, where Hertel says needs have piled up.
"It's only pork when it's in somebody else's district," he said.
He noted that legislators are becoming more intent on earmarks because they can see that a specific need in their area is getting addressed quickly, as opposed to money going through an arguably slower and less efficient state bureaucracy.
Meanwhile, Senior Director Michael LaFaive of the Mackinac Center for Public Policy's Morey Fiscal Policy Initiative described many of the grants in the FY '24 budget as unnecessary, unfair and majorly born in secrecy.
"I look at whether or not this is being done elsewhere and for a lower cost. I give it the 'Yellow Pages Test,'" LaFaive said to MIRS. "Is this thing being subsidized where it can be provided privately, and is being (provided) privately, whether in a for-profit or non-profit setting … and then you just have to ask whether or not this could be provided by civil society … and then, who and what is behind this favoritism?"
LaFaive referenced the concept of "Christmas Tree Budgets," where legislators are surprised near the end of allocating money from a healthy economy, going on a spending spree instead of banking it, spending it on true public goods or allowing taxpayers to keep more of what they had originally sent to Lansing.
"After all, when it rains money from heaven, when the (government has) more on hand than they expected, it seems like taxpayers have been overcharged," he said.
He added that the Mackinac Center for Public Policy has complained about a lack of transparency in the budget-making process, and has called for spending requests to be made available to the public so residents can review and comment on them ahead of appropriations bills being voted on.
