A deal could be coming in a lawsuit over millions of dollars in canceled state spending.
The issue started in December when the Republican-led Michigan House Appropriations Committee, by itself, tried to cancel around $650 million in earmarked funds, claiming it was unspent money from a previous state budget and should be reallocated to the general fund.
State officials later said only around $350 million was actually subject to cancellation.
The state Attorney General said the law the committee used to block the money from carrying forward was partially unconstitutional. That prompted the House of Representatives to sue the state to still try and keep that money from being spent.
After the House won a preliminary injunction stopping the remaining money from going out the door, both sides in the matter were supposed to appear in court Friday.
But after an off-the-record meeting with each side’s lawyers, Court of Claims Judge Michael Gadola said he’d be adjourning without going forward.
“There’s an indication that the parties are interested in initiating some discussions towards a resolution of this matter,” Gadola said from the bench.
Friday afternoon, he gave the parties two weeks to work something out and report back to him.
What happens in this case could have implications for Michigan’s next budget, which lawmakers are already working on.
In a January 26 court filing, State Budget Director Jen Flood said the uncertainty around what will happen to the estimated $350 million is getting in the way of writing the next budget.
“[T]his $349 million uncertainty creates a substantial barrier for rational budget planning, making the process noticeably more difficult than it has been in recent years,” Flood wrote.
A January 30 court filing from the state said that money would have otherwise gone to a children’s advocacy center, and a program to support pregnant and new mothers.
The state Attorney General did not respond to a request for comment Friday, and it’s unclear what a potential deal between the governor’s administration and the Republican-led House of Representatives would entail.
The Democratic-controlled Senate, which is not part of the lawsuit, would likely want some assurance a similar move to block future spending wouldn’t happen again.
