The impact of the new coronavirus pandemic is forcing the state of Michigan to readjust its priorities in terms of spending.
Funding that was earmarked for "pet projects" in the amount of $80 million has been canceled amidst heightened spending on the new coronavirus relief. Gov. Gretchen Whitmer announced the decision after negotiating with Senate Majority Leader Mike Shirkey (R-Clarklake), House Speaker Lee Chatfield (R-Levering) and the Democratic leadership.
“Priorities from both sides were included in the bill, but the world has changed since those negotiations, and we must react and change along with that,” Whitmer said, according to Bridge Michigan.
The governor and Legislature are also wary of shortfalls attributed to the slowdown of the economy because of COVID-19. The Michigan Treasury and Budget Office anticipates a loss of $1 to $3 billion this fiscal year. There is also a projected loss of $1 to $4 billion in the upcoming fiscal year.
The state has suspended hiring state employees and restricted all nonessential spending. More cuts are expected during the current virus crisis.
Bridge Michigan said that among the programs cut was the governor’s Michigan Reconnect Job Training, along with its $35 million in funding. Other programs that lost funding were the bridge to Ferrysburg, Detroit Zoo and North American International Zoo.
Officials are hoping funding received from the federal government in the latest $2.2 trillion stimulus package can help offset the budget hole. Each state is guaranteed at least $1.25 billion. There is some uncertainty as to how it can be used.
Senate Appropriations Chairman Jim Stamas (R-Midland) said the budget hole could exceed $1 billion, despite the first attempts to readdress spending. That would put the $1.25 billion in the Rainy Day Fund at risk.
The state is also having a numbers issue on the new coronavirus testing front. Bridge Michigan said the state could run out of testing supplies within a week. There is a current shortage of swabs, reagents and other testing materials.
“It’s an ongoing concern,” Michigan's Chief Medical Officer Dr. Joneigh Khaldun told Bridge Michigan. “We have gotten requests from other hospital labs that say they are running out of reagents and may need to slow their testing if they don’t get more.”
Exacerbating the problem is the rapid increase in the number of positive cases. On April 1, the state reported a total of over 9,000 cases. There have been 337 deaths from COVID-19 in Michigan to date, according to Michigan.gov.
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