♪ >> Welcome back, our guest this is week is the governor's budget director Dave Massaron, our lead story,$10billion in federal COVID aid coming to Michigan and governor and republican legislative leaders have a problem.

On the OTR panel is Lauren Gibbons, Chad Livengood, and Stephen Henderson, sitting with us as we get the inside out off the record.

>> Production of off the record is made possible in fart by the following.

Business leaders for Michigan has a strategic plan to make Michigan a top10 state in the nation for jobs, personal income and a healthy economy.

Learn more at Michigan's road the top10.com.

>> And now this edition of off the record with Tim Skubic.

>> Thank you very much and welcome back to this edition of.

(Discussion off the record) as we get the inside out with Lauren Gibbons and Chad Livengood and Stephen Henderson, we are going to talk about what the governor had to say this week about COVID coming back and also that$10billion coming into the state of Michigan.

Whoa, that's going to be fun.

>> Governor Gretchen Whitmer was quietly watching Michigan's presidential primary election results last March10th from the executive residence when the phone rang.

It changed everything.

>> I heard today because we have identified the first presumptive positive case of coronavirus in Michigan.

>> One year later, that one case has grown to over 659,000 cases with over 16,600 deaths and counting.

And while 2.6million residents have received a vaccine so far, the positive COVID trends of the last three weeks are beginning to evaporate.

>> Test positivity has actually increased to 4.1percent, up from 3.4percent three and a half weeks ago.

The case rate is now at 114 cases per million, and has also increased over the past three weeks.

We are it is starting to see a slight increase in our hospitalizations and in a little over fourpercent of inpatient beds are being used to take care of patient whose have COVID-19.

We are also identifying more and more of the new variants.

We already have identified over 500 cases of the more easily transmitted B 117variant.

>> On the economic front, when the new president signs the new federal COVID relief act, Michigan is in line for a whopping$10.6billion.

Including 1.78billion going to metro cities and 1.9billion to all 83 counties.

State government is in line for 5.6billion.

>> I am grateful for President Biden's American rescue plan which will invest in the American people and allow us to rebuild our economy and ramp up our vaccination efforts.

>> The governor reflects that all of those COVID deaths that could fill the Breslin Arena and then adds this.

>> It is MS unfortunate and U of M against COVID.

You first and downstairs against COVID.

Republicans and democrats against COVID.

Three safe, effective vaccines against COVID.

America against COVID.

We are all in this together.

>> But this critic of the governor has a different take.

>> Pointing to the fact that we are united is laughable and aim not sure, what state she is operating in but I think it is pretty clear that we haven't been united in quite some time and much of that is because of the way she has operated.

>> All right.

We are back now, Stephen let's talk about this10billion bucks coming in the state of Michigan and same old sock between the governor and the republican leaders, what is going on.

>> Same old song.

>> We have seen this, we have seen this play out over and over depending on who is governor and what party they are from and who is running the legislature.

You know, the tragedy here, and what makes this different is, this is literally life and death, when you think about that -- those numbers that you included in that report, 16,000 deaths from COVID in Michigan, that's more than we lost in World War II, Korea and Vietnam in this state.

This is serious stuff and the idea that it has been reduced to, you know, this tug-of-war political power struggle by one side of the aisle, I mean, I think you can't say that this is a both sides problem.

The governor has been doing what she thinks needs to be done to keep people safe.

The legislature has decided that they should have more say over that, and they have stood in the way of some of the progress we should have made as a way of trying to arrest that power from the governor.

But again if you think of the people who are suffering because of this, people who are losing their lives and people who are losing their jobs and their businesses, it is unconscionable.

I have never seen anything quite like this.

>> Lauren, in adding to the intensity of this issue this week was a letter from the chairperson, republican chairperson of house appropriations basically his ultimatum too strong of a word to describe his letter?

He basically said to the governorly talk to you and negotiate on this$10billion, madam governor but you have to sit down with us and start sharing some power.

What did you make of that letter and its impact on where we are?

>> I don't think it is ever a good sign when there is not a negotiation happening on the budget between the legislature and the governor and that is -- I use the word ultimatum, I the I that is probably a fair statement at this point, both chambers in the legislature have indicated that they are not really willing to fork over all of the federal money without some policy related legislation limiting the administration's authority, primarily the health department at this point's authority to enact COVID-19 restrictions.

And we are already seeing that play out.

There is a lot of money that is left unallocated and you know, as you alluded to there is a lot more money coming in that the state will have to allocate.

That's on top of the regular budget cycle, so Republicans have indicated that the market is going to be the battleground for their disagreements with the governor on COVID-19 restrictions and ongoing COVID-19 response and that, as I said, initially, that is not really a great sign for budget negotiations or for getting this federal money out to residents.

>> Chad?

>> Tim, lawmakers say they have got the two issues that really have made the governor squirm a little bit here.

That is closure of high schools back in November, forced closure of high schools and the health department and also the cancellation of winter sports that got delayed, I mean, this was an issue where the governor clearly caved a few weeks ago, back in February, and first saying they weren't going to allow winter sports and well into March.

They decided to open it up, so the legislature is basically saying they want these powers to close schools, shut down sports, taken away from the department.

An easy out here is for the governor is to just say yes, and let local health departments make those decisions.

We have some pretty aggressive local health departments in Michigan.

They have -- they have gone against some of the wishes of locals from Ottawa county and other places throughout this pandemic and done you know, quarantines and shutdowns of college campuses and things on a local scale.

That's what the legislature is asking here, and I think a lot of this work could be averted if they would, you know-- if the legislature would stick to that and that is one of the biggest problems here is the legislature has not negotiated in good faith at several junctures during this pandemic with the governor, but if this is what they want, then maybe this is what they should get and then we can move on to -- they can move on to decide how to spend$10billion, which is quite -- quite a bonanza for state government coming out of a recession.

>> Stephen?

>> Yes.

I mean, you have got to have some sort of break in this at some point.

I mean, we can't continue on this path forever, and when you think of what the public health officials are saying about what we still face, that is the thing I just keep coming back to is that it is easy to start saying, well, we are going back to the world now, you know, we have beaten COVID there is a vaccine we will start reopening the state, and reopening businesses and getting people back do normal life, but you have got these new variants out there that every few weeks there is another one, and we are not sure what effect the vaccines will have on them.

You still have a lot of people sick and you still have people dying from this.

We are not through this crisis from a public health standpoint yet and so the money to try to deal with some of these things is even more critical.

And so this logjam in Lansing looks more and more obtuse and insensitive to the residents that they are supposed to be -- they are supposed to be representing.

>> Chad, why can't the governor just invite legislative leaders in and say, here is what I would like to do vis-a-vis this problem?

What do you guys think?

Have a conversation around the table a.

She ultimately is still the governor.

She has that emergency authority.

Is that going on?

And if it is not, isn't that a simple solution to this?

They say we are an equal branch of government, treat us as such.

>> Yes.

Tim, it is not going on.

And that's because of some of the things that have been said and done.

In particular by the senate majority leader Mike Shirkey, let's not forget a month ago we were seeing a video of Mike Shirkey talking about wanting to have a fist fight with the governor on the lawn of the state Capitol.

Shouldn't laugh this is almost unreal that this is what our political leadership has kind of gotten down to, is they are talking in sort of you know, in violent terms about the governor.

>> All right.

So, Chad, here is the solution.

Don't invite him into the room, ask for some other republican to come in so they can get something done if that is a problem, yes, no?

>> I mean, are you familiar with Mike Shirkey's ego?

>> I am going to take the Fifth Amendment on that, okay?

>> Here is other question, who would that be?

Who else in the senate delegation would you put in room to get a better result?

I mean.

>> I have got one, I have got one.

>> Wayne Schmidt.

>> Okay.

Wayne Schmidt.

>> Maybe.

But wouldn't the rest of the -- the rest of the republican caucus support the idea of Wayne Schmidt being the person in the room negotiating with the governor?

>> No.

>> Yes, right.

I mean, it is an extreme -- there is such an extreme nature to the GOP politics here and it is a caucus that you know, as Chad point out is thousand led by a guy who is you know, not only aligned with the very people who have been threatening the governor's life but have been terribly duplicitous about all of that, I mean, he is saying one thing publicly to her and saying one thing really different to these really dangerous elements.

I mean, when that is your leadership, I think it is really hard to suggest that the governor owes, you know, a reasonable conversation with him about who should be in charge of this.

I mean, it really does strain reason to think that that should happen.

>> Lauren, your take on this.

How about Jim Stamos, chair of appropriations committee?

>> You know, I just want to say regardless of who is in that leadership position, who is negotiating with the governor, I think Stephen brought up a lot of great point about why this money, why the budget at this point is so critical to the State's population, and so regardless of who is in leadership, it needs to happen, like this logjam is not something that is sustainable long-term, and not only from a public health standpoint, from an economic standpoint, all of the states top economic experts have said that the reason that Michigan isn't in a worse state of at least there a fiscal standpoint, obviously, at the local and you know, individual level, a lot of people are still hurting but from a state revenue standpoint, things aren't as bad as they could have been because of the federal money that has already come in.

So if the leadership at this point is not allowing additional federal funding to come in that could help for future -- for future state fiscal years, that could be a really big problem.

So I think you know, regardless of who is at the top, regardless of who is negotiating with the governor at this point they need to do so in good faith and they need to do it quickly.

>> All right.

That's a good segue to introducing our guest now, the guy who is supposed to be braining this logjam, Mr.David Massaron.

David, when you read that letter from your good friend Mr.Albert, did you see that to be an inflammatory letter or an invitation to dance?

>> Well, Tim, first, let me say it is a thrill to be on the show at this point.

Three years ago 30 years ago I remember my dad making my watch the show on a Sunday, so I am going to do the same and make my son pull it up on the tablet and watch us.

I appreciate you letting me carry that tradition forward.

You know, the letter is not anything different from the said to me repeatedly and we are going to keep working.

I do want to say, you know, we have had a long discussion and listened to your panelist there is is good news that came out of last week.

We were able to get a direct here wage increase the governor called can for after the state of the state done, so those workers can get the raise that their additional wages that expired at the end of February.

We are able to open up on Monday, the rental assistance program so that people can apply then, which had been stuck, and the department will be able to get food benefits because of the federal changes, so although the rhetoric has been bad, and the process has been bad, there has been progress.

>> Chad.

>> Dave, what about the aid to schools that got vetoed or there is going to be a redo here?

I mean, the house already passed the bill out, but do you think there is a way to get that money to schools pretty quickly?

>> I hope so.

I mean, I think we need to get all of the money out to public schools and we are going to continue do work with the legislature.

I would have liked to have been at the table with them this week negotiating a supplemental.

Obviously that hasn't happened and may not happen soon, but we need to get that money out.

We need to get the rest of the food assistance money out.

We need get the rest of the testing money into a position that the department has the flexibility to respond as the course of the pandemic shifts.

So hopefully we can get working on that real soon.

>> Lauren?

>> Much has been made, especially from the democratic side about the possibility of some of this money going back to Washington, D.C. Is there a date certain that Michigan could lose federal funding if it is not allocated?

>> Yeah.

Each different stream of funding has different timelines in which the funds need to be spent.

The school districts have you know, a little under 15 month, maybe 14 at this point to spend that money and it is a substantial amount of money for some districts.

The rental assistance money I think is 60 or 65percent needs to be spent by October1st.

Luckily that program will be going at full speed you know, early next week.

So all of that funding depending on the source of the particular stream of funding is subject to return if we don't use it.

>> Stephen.

>> So Dave, used to be the CFO here in the city of Detroit and you guided the city's finances through much of the pandemic.

Now you are at the state level.

Talk about, though, how critical this new money from the federal government is to cities in particular given how hard hit they have been both economically and from a public health standpoint.

>> Stephen, I think that's a great question.

Obviously the work the governor did in advocating for this bill and making sure that Joe Biden was president is really paying dividend to our cities and to our state.

There are a number of programs that the city had to cut in order to balance this budget.

They were painful cuts the mayor led the way in helping us do when I was in that seat and some of that activity can restart.

But more importantly, we know the world fundamentally changed as a result of the pandemic and we are going need to make investments so that when we get to the other end we can thrive, and this funding will give the city I think it is about a little over $800million for the city to make those investments and at the state level you know, there will be a substantial amount of money that additionally we can make investments in our workforce and across the board to try get to the other end of this pandemic in a way where everybody has an opportunity to be successful.

>> Mr.Massaron, let me follow up on Chad's question.

You said you were going to spend that money to the schools.

Does that mean you are going to spend it and ignore the language in those budget bills that the governor has to give up her power and then let the Republicans follow her into court to battle that out?

>> So I know this became a louder issue than traditional last week or this week.

I would say first, I mean, from my memory going back to John Engler and Dave McClellan, governor's council and the Attorney General, whether Frankelly counseling the republican John Engler or Mike Cox counseling the democrat Jennifer gray home has always looked at boiler plate and given departments guidance on how to implement it.

That process is still underway and when that process is done, well, we will obviously make public whatever the results are.

At this point we really don't know how the analysis will shape out and we will continue to look at it.

But Mohr importantly, the easiest solution to this problem is for us to get to the table and actually do another supplemental where we work together on making sure our kids have the ability to go to school in person and in a way that is safe and that's what this funding was intended to do and a that's what we should do.

>> Well, I want to make this clear.

You don't believe the language that the Republicans sent to you about taking away her power will hold up, correct?

>> I don't know the answer to that question.

I think we are in the process of reviewing -- reviewing it with the governor's legal counsel and the Attorney General, normally that review would have taken place prior to the signing event but in this context, we signed it a day after we got the governor to sign ate day after we got the bills because we needed to get that direct care wage increase out there.

We needed to get the rental assistance money out there and we needed to keep building the vaccine infrastructure so we didn't have the normal deliberative process with respect to how we are going to give department's guidance on boiler plate.

>> But if the AG comes back and says it is illegal you will spend the money?

>> yeah, I mean at this point my focus is working with the legislature to get the money appropriated.

If and when that happens that will be a different day and a different set of decisions.

>> Chad.

>> You have got 5.6billion coming from the 1.9trillion stimulus bill that the president signed yesterday.

Is this a time to maybe do something big, radical, I mean, I will throw a couple of ideas out here, bury Jefferson avenue along the riverfront, maybe the 375 project, bring it to grade?

Build a new rail tunnel, buy the ambassador bridge from the maroons, I mean, something like huge infrastructure that the state would never have the money on its own to do in normal times?

>> I think, Chad, yes, this is a chance for us to try to make some transformational investments and we need look at all of them.

We also need to keep in mind an infrastructure bill is likely to follow relatively soon, and how do we address all of the different priorities and needs that our population has as a result of this pandemic as we go forward.

I do want to point out that the bill had a built in tax cut so off the bat there is probably a $600million revenue loss to the State on a one-year basis.

So we are going to have to deal with that.

At the same time we figure out how to program these funds.

There is also additional funds coming for schools and I think given what we have seen in this pandemic and its impact on working mothers there is one thing we should also focus on there is over a billion dollars coming in childcare as well.

We need to work together with the legislature to figure out how we situate these investments as a way so when we are finally on the other end of this terrible more than yearlong event we are able to ensure that everybody has an opportunity to thrive.

>> Lauren.

>> There is a billion dollars for childcare for Michigan alone?

>> Yeah.

It appears that way.

I should say that we are still reviewing the bill and looking at the analysis that the department has put out but it looks like it is going to be about that amount.

>> Lauren.

>> How does the current roadblock with -- the supplemental vote for budget negotiations for this year's state in 2019, we saw quite a bit of animosity regarding the budget process.

It seemed as though 2020 went a little better.

What are your anticipation for this future budget cycle?

>> Obviously it is no question that this process has not been what we would have liked.

I will say this, you know, I think I have started to develop a good relationship with both chairmen, we share the same end goal.

What chairman Albert we both have young families, we are both outdoors man and hope he will invite me hunting so we can further build that relationship as we move forward.

It is possible with the current process this will be a very rough process that will take time, but at the end of the day, all of us know where we need to get to, which is we need to get shots in arms and get close to regular as quickly as we can and then we need to make necessary investments to help everybody deal with what is going to be a fundamentally new reality when we get to the other end of this pandemic.

And because we all share those goals I am going to try to be optimistic that we will be able to work together to get this done.

>> Mr.-- maybe take a food taster when you go hunting with this gentleman, is that a good idea?

>> Chairman Elbert is a passionate, has passionately held beliefs but you know, his beliefs are based on you know, what he thinks is right and I believe he operates with integrity.

Everything he has told me he is going to do he has done and my hope is that as we move further along in the course of the pandemic that we are able to develop a more healthy and rational relationship.

Look, we have real problems.

We have funding to deal with those problems.

It is time we all get to the big kid table and actually try to get results for the people that live in the state.

>> All right.

Very good.

David, you are going to hang on for a little bit of over time but before we close off this program we would like to just pause for a moment to commemorate the passing of the Attorney General Frankelly in our state of Michigan at the age of 96 down in Naples, Florida, anybody who has followed Mr.Kelly over these years knows he is the longest serving AG not only in the state but in the nation, 37 year run, after that he became a lobbyist and I thought it was interesting one of the groups he loved to beat up on was consumers power company way back in the day and one of the first clients he signed on was consumer's energy which means you go forward.

So we give our best to the survivors of Mr.Kelly, he was a great guy to cover and there will never be another guy like Frankelly.

Peace to you.

All right.

We are going to take a little time out here for some closed credits and returns with Mr.Massaron, more questions during over 0 time if you will go to WKAR.org and we will see you there.

♪ ♪ Production of off the record is made possible in part by the following.

>> Business leaders for Michigan has a strategic plan to make Michigan a top state in the nation for jobs, personal income and a healthy economy.

Learn more at Michigans road to top10.com.

For more off the record, visit WKAR.org.

>> Michigan public television stations have contributed to the production costs of off the record with Tim Skubic.