F.Y. '10 PLUS 13: BISHOP, GRANHOLM TO MEET ON BUDGET IMPASSE

Already nearly halfway through a one-month continuation budget, Governor Jennifer Granholm and Senate Majority Leader Mike Bishop will meet Wednesday in an effort to resolve a stalemate on six critical budget bills.

The six bills have passed both houses of the Legislature in identical form and ordinarily would have been sent to Ms. Granholm, but Mr. Bishop (R-Rochester) has held them in the Senate using a parliamentary procedure, saying he fears Ms. Granholm will veto some portions of the bills.

Ms. Granholm's Monday statement that she considers it an option to prevent spending cuts she opposes by using the little-known Administrative Board also provoked a warning Tuesday from Mr. Bishop.

"That to me is a great way to destroy whatever trust is left over," he said. "I'm hoping that cooler heads will prevail, that we get by this in a unified way, that doesn't destroy a work product, what was a very good agreement."

The six budgets - for the departments of Energy, Labor and Economic Growth (SB 243), Human Services (SB 248), State Police (SB 253), Community Health (HB 4436), general government (SB 245) and higher education (HB 4441) - contain the most controversial cuts in the plan devised by Mr. Bishop and House Speaker Andy Dillon (D-Redford Twp.). Ms. Granholm has opposed the Bishop-Dillon agreement, which cuts $1.279 billion in spending.

During her Monday news conference, Ms. Granholm stressed that using the Administrative Board to transfer funds to programs she wants to keep is an option, not her strategy.

Granholm press secretary Liz Boyd said Tuesday that Ms. Granholm "is very clear on the law" and knows that she cannot spend funds she excises from budget bills through a line-item veto on other uses.

Of the Administrative Board scenario, Ms. Boyd said, "That is a very limited transfer authority and only applies to enacted appropriations, not vetoed funds."

Still, the mere mention of the possibility had legislators researching the board's powers, which were most famously used in 1991 by then-Governor John Engler.

Shortly after taking office, Mr. Engler and the Legislature confronted a deep deficit for the current fiscal year. An opponent of the General Assistance program that provided welfare to able-bodied adults, Mr. Engler proposed eliminating it and using its funds to pay for Medicaid and other programs.

With the Democratic-led House resisting, Mr. Engler used the Administrative Board, which is dominated by gubernatorial appointees, to unilaterally implement the plan. The board transferred the money for General Assistance to Medicaid and other social service programs.

A lawsuit was filed and delayed implementation of the plan. While awaiting the case's outcome, Mr. Engler and then-House Speaker Lewis Dodak reached a deal to reduce General Assistance (which was later eliminated in the 1991-92 budget). The board's action ended up moot, but Mr. Engler ultimately prevailed in the Supreme Court on the action's legality.

The members of the Administrative Board are the governor, lieutenant governor, secretary of state, attorney general, state treasurer, superintendent of public instruction and the director of the Department of Transportation.

"There's plenty of law out there that would prohibit her from doing too much," Mr. Bishop said.

Mr. Bishop was asked why he would not release the budget bills to Ms. Granholm's desk as well as why he continues to insist on speaking with the governor about her concerns even though she already has publicly said which portions of the budget she opposes.

"I'm trying to preserve trust," he said. "I think we're at a very, very difficult point where if this is handled improperly, if we send budgets and (they are) summarily vetoed, or if action is taken where vetoes are made on line items and then revenues are transferred to different line items, it will blow up whatever's left of the trust in this town. If that happens, there's no hope of bringing people back together again to have a discussion about long-term public policy."

But Ms. Boyd said the Senate has an obligation to send Ms. Granholm the budget bills.

"What does this have to do with trust?" she said. "The budget was passed as the senator wanted it passed. It's now his constitutional responsibility to send the bills to the governor. I'm not sure what he's saying when he's saying it's a matter of trust. It's a matter of doing his job."

Mr. Bishop also denied that he plans to hold the budgets until the end of October, when the continuation budget expires, as a way of forcing Ms. Granholm to choose between agreeing to the budget or issuing major line-item vetoes without time to reach a new budget deal.

"I'm not going to duplicate high noon," he said. "I have no interest in being the John Wayne or any Wild West character. ... I don't have any interest in jamming the executive branch with this decision. It's my responsibility to deliver to her budgets that we've agreed upon as our work product. ... And we're going to do that."

But Mr. Bishop refused to offer a date when he would release the bills to the governor's desk.