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Lawmaker panel OKs budget cuts, ‘rainy day’ cash for $2B gap

calculator and financial paperwork
Dave Dugdale via Wikimedia | CC BY 2.0

A panel of Michigan lawmakers approved proposals Wednesday to dip into state cash reserves and make budget cuts, part of a wider plan to address a $2.2 billion budget hole caused by the coronavirus pandemic.

State Budget Director Chris Kolb told the panel that the state will draw $350 million out of its $1.2 billion “rainy day” fund. Lawmakers meeting for a joint session of the House and Senate appropriations committees also approved an executive order from Gov. Gretchen Whitmer that cuts nearly $667 million from the budget by reducing funding to state agencies.

Legislators, who voted 15-1, praised the plans as the best solution to address the shortfall caused by shutdowns related to the coronavirus outbreak.

“This has been very intense, especially I think, over the last two to three weeks time,” said Midland Republican Jim Stamas, chairman of the Senate Appropriations Committee. “I think we found a way to come together to find a solution.”

The state will also rely on $915 million in federal relief, part of which will be directed to schools to offset a shortfalls for K-12 schools and higher education.

Whitmer, a Democrat, and Republican legislative leaders announced an outline of the plan earlier in the summer.