A correspondent edition of OTR is up next.

And thanks for joining us.

The lead story, House Republicans offer up a new state budget, including they see $5 billion in waste.

We'll have a reaction aroun the OTR table for that reaction.

Kyle Melinn, Jordyn Hermani Emily Lawler and Simon Schuster.

Sit in with us as we get the inside out.

Off the Record.

Production of Off the Record is made possible in part by Bellwethe Public Relations, a full service strategic communications agenc partnering with clients through public relations, digital marketing and issue advocacy.

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And now this edition of Off the Record with Tim Skubick.

Thank you.

Welcome to Studio C on this holiday weekend.

And we have a new budge proposal from House Republicans.

Guess what's in it or not?

When you heard the words cut, cut, cut under the State Dome this week, it was not some Hollywoo director ending a movie scene.

Rather, it was the House Republican speaker calling for $5 billion in cuts to the state budget, drawing immediate criticism from virtually every group in town that the GOP targeted.

For example, there is a proposed 47% slice out of the state Labor Department, a 53% cut to the state's civil rights department.

Michigan hospitals and others were targeted for a 13% reduction, which the head of the hospital association quickly labeled, quote, disastrous for local governments.

County townships and cities.

Revenue sharing, a 12% slice.

The governor wanted to begin the conversion of the state's fleet of cars to EVs.

House Republicans said no thanks and eliminated that.

And there would be no troope layoffs under a proposed 7% cut to the Michigan State Police.

However, one key Republican confesse that that reduction was in part due to the alleged, quote, serious leadership failures of the MSS director, Colonel James Grady.

The second Oakland County Republican Matt Maddock orchestrated all of the WFA slicing and dicing that's alleged waste, fraud and abuse.

Everyone said there is absolutely no waste in this budget.

The fraud, waste and abuse is rampant in government.

Everyone knows that.

And I am I am ecstatic to say that we've come to you.

Michigan taxpayers and workers are cutting over $5 billion worth of fraud, waste and abuse in our government.

The Senate Democratic leader, Winnie Brinks, meanwhile, expressed hope that now some serious budget, give and take can occur, but quote, the games and distractions need to end.

House Democrat Julie Brixie, he says the good news here in all these cuts is that now some serious talks can begin.

I'll be voting no on.

It, but at least we can begi the actual negotiation process where we set up.

A conference committee.

And the House and Senate work together to come up with a budget for the state of Michigan.

Lawmakers are working against an October 1st deadline to get all of these cut or maybe some of them in place.

And a full budget by that deadline.

All right.

Let's go around the table.

Do you think for one minute they will cut $5 billion out of the state budget, yay or nay?

No.

No.

No.

That's not how negotiations happen, Tim.

That was a yes or no question.

No, No.

Okay.

Yeah.

So why not?

Because there isn't the appetite in the governor's office in the Senate to do $5 billion in cuts because the cuts that were put on the table are are from programs and from departments that Democrats just in general see value in, whether it' the Department of Civil Rights, whether it's revenue sharing, whether it's money to reimburse hospitals, whether it's the state police or the Department of Environmental Environment, Great Lakes and Energy, which also got a significant slice.

These are programs and departments that the Republicans have felt like have gotten overfunded, that during after COVID, that they have gotten ballooned as far as their funding and now they're going after them.

And the Democrats are like, wait a minute, we put money in here for a reason and you don't see the reason.

I think some of these cuts ar easier to swallow than others.

You know, they're targeting things like unfilled FTE full tim employee equivalent positions.

I think that's a little bit easier of a cut to swallow than some of the more ideologically driven stuff, like moving u the implementation, basically, of how the state would handle the big beautiful bill.

Who will push on the ghost employees?

Well, okay ghost employees is a charged term because we had one of those and it was really different.

But, you know, these are just.

There were criminal charges involved with in that one I believe.

Right.

Right.

I would yeah, I wouldn't us the same word in both instances.

But these are just positions that haven't been filled for some reason.

So they're sort of.

Well republicans they look at they squirrel this money way is the speaker's term not mine for positions which were never filled, sort of a kitty that was sitting ther just waiting to be picked off.

Yeah.

I mean, I do think it's a genuine management question to ask, like what's the value of having those on the books versus not having them on the books I think is a valid budget discussion.

And I think it's one of the points that the House Republicans can get further with than some others in their budget.

Emily's point, I mean, and you heard Representative Maddock there talking about waste, fraud and abuse.

It's a term we've heard Speaker Hall use over and over again.

But, you know, I asked Speake Hall a couple weeks back about, hey, you keep saying waste, fraud and abuse.

Can you give us a figure you're saying it's rampant.

You made it there, that everybody knows that the government has that.

And you know, the FTE thing that might be somethin that's a point in their favor.

But when you look at other cuts that are being swept in and saying that, you know, the bulk of what we caught was waste, fraud and abuse, I mean, we're seeing cuts to reduce homelessness, diaper assistance grants, n lead service line replacements, $4 million in cuts to crime victims.

Like what's part of those is waste, fraud and abuse.

I know tha they're not necessarily saying everything that got slashed is, but when you use these sweeping, broad generalizations and saying that we're doing this for th betterment of state government, but then turning around and saying that your city is still going to have lea lines, we're not going to help with the cost of child care, which everyone's been talking about is is being ridiculous.

You know, it is hard to swallow and it does make an even greater case for saying that, no your budget is not necessarily the most balanced and the best for families, which is what I kno Ann Bolin came out touting as, you know, they're going to have to budge, they being Senate Democrats, going to have to budge a lot further than we're goin to have to budge on our budget.

That' no way to start a negotiation.

Yeah, I mean, I think if you look at the way in which this budget process has played out for the House we have very specific numbers.

Now that the budget is completed, more than five, more than 4000 FTEs cut, all these billions of dollars slashed across the board.

But if we had seen subcommittee budgets passed back in May or even a month ago publicly in a public process and known what these cuts were going to be, then the public would have time to review what these cuts were going to mean and the impact that they would have on state government.

If they have a list of, you know, 4600, I believe, full time employees tha they think are ghost employees that aren't present at the job that can easily be slashed.

We'd love to see that list.

That would be really, I think, valuable in trying to ascertain the validity of some of these proposals.

But here's the problem for the Democrats.

The Republicans are very smartly inoculated themselves by grabbing the headlines that we all put out there.

$5 billion in waste.

Okay.

It's a simple headline.

Now, the Democrats are going to come along and say, well, we really don't want to cut waste out of government.

Do they have a PR problem here with the electorate?

No, I don't think so, because they're going to talk about what government is funding and why things are important.

I mean, you could in your own personal budget, there are things that you spend money on.

I mean, maybe you spend money on, you know, maybe you spend 50 to $100 on your hair and somebody could say, you kno what, that's a waste of money.

And to that person, it could be a waste of money.

But for you, that's not a waste of money.

It's extremely important.

And it's the same kind of thing here.

I mean, there are things that the the Republicans think is a waste like additional people to handle civil rights complaints.

And the Republicans will say well, that's a waste of money.

You don't need all these FTE to handle all these civil rights complaints.

But the Democrats are like, Yes, you do, because we've got the trans community, we got the black community, got all these people who ar getting discriminated against.

And we need people bird dog in that.

It's the same kind of thing.

But here's where I thin the Democrats do have an issue, is that the Republicans for the first tim actually prove that you can find $3 billion in the general budget to fund roads.

Yeah.

And that that they're taken to the negotiating table and that's where the Democrats are going to have a problem because now they're like, oh, while gee, maybe we don't necessarily have to raise all this revenue, maybe there is money here.

And I think that that's going to be one of the big barriers that we see as hopefully soon the chamber actually come together and begin to negotiate a budget i that there's a $3 billion money shuffle here that one chamber has.

And the other doesn't.

And without a roads plan from the Senate, we don't really necessarily know how these pieces are going to fit together.

Well, and also to say to that you know, a couple weeks back, we heard that economic forecasts are saying that the Senate budget bill has to be revised downwards, another $1.1 billion.

So it's not going to be easy.

You know, to ambulance point the Senate will have to swallow some cuts that it's not prepared for.

If Whitmer as as serious about getting a roads plan done, as she has said and reiterated, which seems very likely, the Senate will have to acknowledge that they are going to lose a lot more than they're going to gain.

But to your point about Republicans getting the headlines that they wanted.

You know, I just named a couple of things right there that I feel like who doesn't support crime victims?

Who doesn't support getting lead servic pipes out of their water lines?

You know, that kind of waste.

If Democrats have the ability to re message that and say, do you think it's a waste to remove lead service lines in your community, that could be something in their favor.

But here's the problem.

The Republicans have the simple message We're in a time right now, if I'm correct and correct me if I'm wrong, where the attention span o the people is about that long.

Okay.

They've got their headline.

If you got to explain in politics you're potentially in trouble.

Mr. Marlin.

You've heard that before.

But you're not buying it.

No, I hear what you're saying.

You know, I guess the Democrats are going to have a lot of time, though, to talk abou the things that they're funding that are important for government.

You know, and they can talk about the hypocrisy on this as well.

I mean, if you're going to put $3 billion more in roads, but you're cutting revenue sharing to local governments by 12%, aren't you just taking money from one pocket and putting it in the other?

You know, and the same thing with public health, too, if you're cutting revenue sharing to local governments, but you're increasing money over here for another program, it's another money swap.

And I think they've got time to explain that.

Yeah, I think this kind of starts the negotiation on to different levels.

One is the total pot of money.

I do think that, you know, Republicans have shown some concern about the ballooning of state budgets over previous years.

Some of that's been due to one time funding and some COVID related stimulus funds, things like that.

But you're also sort of starting to fight over priorities, right?

So if Democrats want to make the case that the stuff in their budget should be funded, there, a chance to d that is in conference committee.

What are the these just take that $3 billion and say we're good, let's go.

I mean, sure that could do that potentially.

You're saying take it.

Well, we agree with you.

There's $3 billion that we can use on the roads without raising taxes.

Next question.

You just essentially adopt the House's roads plan.

You're saying?

Yeah, sure.

Well, because the money is there.

Well, there's a third player at the table here, which is Governor Gretchen Whitmer, who said that she that there should be roads plan in the budget and that it shouldn't come at the expense of her signature economic development funds.

Yes, but that was before this budget came out from the House Republicans.

Yeah, but the roads plan has been present here for a number of months.

It's no surprise.

Whitmer has publicly sai that while she and Speaker Hall and he will be the first to tout this quote, that they're the only two leaders with, quote, the guts and th brains to propose a road plan.

I mean, Whitmer has come out and said that the roads plan that the House has propose does leave a lot to be desired.

So it's not even as though, you know, for as much as Speaker Hall does, and rightfully so, shows, you know, he has a relationship with Governor Gretchen Whitmer, especially a public one.

I mean, they don't agree on everything.

They may be able to get into the room, but that doesn't necessarily mean that she's going to also go along with everything he says all of the time.

You know, a couple of other things here, too.

I mean, I think that this gives the Democrats road map to make some cuts, but it also sets the groundwork for future budgets for Republicans and that they're not going t get everything they want here.

But I think we're going to se a lot of these things next year.

We're going to see if the Republicans take majorit and Hall is the speaker again.

Next term.

We're going to see these that term and the term after.

So this kind of sets the groundwork for a continued drumbeat on a mathematics and bond type of budget that's going t I think we're going to continue to hear about in the years to come.

I think we should make no mistake here that the fact that we have less than five week until the end of the fiscal year that we're just seeing budget from the House Republicans is not solely due to, say, dysfunction or incompetence.

Time here is a negotiating tactic.

And when you have two sides of Democratic one that are Republican this and you're able to stake out a position that is sort of pretty far ou from where Democrats are at in terms of cuts, that works their advantage.

To the Republicans get credit for going over, as is the chair of the House Appropriations Committee said line by line.

That' why it took so long to get here.

I don't remember anybody in the budget process saying we went over every line in the budget looking for waste.

Can you remember any of that?

Anybody saying that?

I don't know if they said it, but I'm sure that there are people who have I mean, those budget documents are thick and weighty, as I'm sure all of us who have accidentally gotte stuck with them can attest to.

But I do think that, you know, they really did look for some unconventional cuts and that could work to their advantage.

You know, you're putting people on the spot to defend program that maybe they've just kind of automaticall been rubberstamping for years.

Yeah, I think that we're seeing perhaps the emergence of a new dynamic in the legislatur with the reform of term limits and people can survive longer in a single chamber.

We might see a more active oversight function regardless of the party that's in power.

This means that there's going to be legislatures in appropriations committees and subcommittees that might have knowledge and maintain that knowledge of individual programs and be able to decide year after year whether this is a good use of taxpayer dollars.

Well, and for a caucus in a party that has since the beginnin said that they're striving to be the most transparent, that they can be keeping al of this away until the 11th hour and then shoving it through and one day passing it and giving reporters and not just reporters, but people on the floor voting on it.

And, you know, the people at home.

No, no, no ability to look over any of this.

I mean, yeah.

And Simon's point when we were talking a second ago about these, like after years and I'm only point tha those two years, if that's true, show me if that's true, lay it out.

You know if you want to say that you're being incredibly transparent, then be transparent because right now this kind of is working against what you've staked yourself out to be.

I don't disagree with that, but at least they at least they shoved it to u at 5:00 as opposed to midnight, which we've had in the past, where they've given us a whole document at midnight.

What are you griping about?

Right.

I mean, at leas we got it while we were awake.

I mean I guess that's an improvement.

So, I mean, in that regard, the transparency I think, is still questionable because it should have gon through the traditional process.

But I will say to your point, do they get credit for going line by line?

I think the answer to that is yes.

I think they do get credit for that because in the past, you know, we've got this very scripted way to get a budget done.

And really these subcommitte chairs just historically have, what, a month, two months to go through these budgets.

And that's just enough time to have all these special interest group come into your office and say, why we need this program and that program.

And they said, you know what?

We're we're going to take our time and we're actually going to learn about this budget.

I mean, they took the DHHS budget, which is a complete monster.

Chopped it into three and and actually dug into it.

I give them credit for that.

I think that's actually probably not a bad idea.

But I think at the same time, we owe it to ourselves as reporters to sort of call their bluff that if there's $5 billion of waste, fraud and abuse, let's see the list.

Show us what waste was.

Fraud and once abuse and show us exactly what are these fees that they're cutting from all of these budgets and which ones are staffed and which ones aren't?

We haven't seen that yet.

And so I think that that sort of another ding against them in terms of transparency, I.

Don't know if it's a hot take, but I just get the strong feeling that roads are not going to move concurrently with the budget this year.

I mean, there's there's 30 days left.

If you remember when Governor Gretchen Whitmer unveiled her budget, it was distinct from the roads plan.

They were two different plans.

I think they're sort o on a trajectory to two separate rather than dovetail.

Last time I checked I don't ever remember the governor walking backwards.

Okay.

So you think maybe a continuation budget and then they get roads like in October and November?

Okay.

All right.

I could see that.

We'll save this tape.

And if Emily is right, we won't show it.

No, we will.

Quickly.

We do know that the governor and Mr. Hall and Ms.. Brinks, the Senate Democratic leader, meant it at the executive residence at 1130 on Tuesday.

Yeah.

Yeah.

Okay.

We don't know what they talked about, but what do you think they talked about?

Well, I think they were trying to figure out a plan on how to move forward.

And in that regard, I think it was probably successful because we didn't hear a lot about it.

If things would have blown up, I think that we would have gotte a lot more intel on the meeting.

So I think, you know, we saw some frustration from the statemen from the Senate majority leader, like it's about time that the Republicans are going to do something.

But I think that the ball is slowly rolling.

All right.

We'll watch it roll.

All right.

Let's roll into this next sound byte with Mike Duggan who sat in his chair last week.

And what did he have to say?

Surrounded by 800 supporters from all walks of political life.

Independent candidate for Governor Mike Duggan is riding high these days and talking about lots of issues like what's going on in the nation's capital.

If the president called up today and said, I want to sen the National Guard into Detroit.

Would you sign off?

Yeah, I don't.

The answer is no.

And I don't see any chance of that happening.

What we have i the city of Detroit want to do is run the energy.

Come in.

It's bad strategy.

Michigan voters may get a chance to save tons of money by voting to kill all property taxes.

The mayor is a no vote.

I think we've got to address the property tax problems, but I'm not in favor of laying off all the police and fire in the state.

Candidate Duggan also argues the biggest problem facing Michigan, a bunch of fourth graders, 60% who cannot read.

However, conservative Republican Betsy DeVos and her supporters favor a voucher system whereby parents would get a check from the state and then they could pick a religious, private public or charter school.

So, no, I'm not in favor of vouchers.

Michigan voters may also get a chance to wipe out the current state constitution and write a new one.

I'll be voting no on it.

I don't think the problem is with the Constitution.

But is there a problem with the Michigan Economic Development Corporation charged with helping to lure jobs into the state?

It does so by writing checks first to future employers before they come i under a Duggan administration.

He would give tax breaks out and other incentives after companies actually create the jobs.

So the days of the check upfront are over.

If you get in, yes.

I mean, it would take.

An extraordinary case.

To be a check up front.

Mr. Duggan learned lots about the political game at the knee of former Wayne County executive Ed McNamara.

And along the way, Mr. Duggan would horse trade to get what his boss wanted.

That is, he would give something to get something in return.

Would he do that as governor?

I've been in this business for.

40 years, and so I would never horse trade for something.

I thought was wrong.

But if I though there was a meritorious project that got moved up in the priority list.

You know, those are the.

Kinds of.

Agreements you make every day to build coalitions.

Finally, Mr. Duggan reports.

So far, he's received six or eight phone calls from folk who want to be his running mate.

So, Mr. Mayor, cough up the names, please.

I don't want to rat people out who aren't calling.

Duly noted.

All right.

So you almost got him Skub.

Oh, yeah.

Close, but no cigar.

What did you make of that?

Yeah, I mean it was an interesting interview.

I loved your guys.

Those questions, because this is a candidate who we're all learning about, right?

When you have an independent, they don't fall neatly into a party paradigm.

I think there are a lot of assumptions we make about Republican and Democratic candidates that you just can't make about Mike Duggan.

Yeah, and up to this point he has gotten away from asking or being answering a lot of questions because he's still talking about this.

I'm different.

Blah, blah, blah, blah.

What did you make of that?

I mean, I think that as to, you know, a credit to his candidacy, there was a little bit of something in there for everybody.

You know, he talked about needing to re review how the state handles its economic incentives.

At the same time, though, he talked about how he did not support taking away propert taxes entirely because it funds, you know, your public safety, your zoos, your libraries.

You know that that's something that a family would want to have.

He talked about, you know, a number of things, the horse trading stuff, for instance, where to his credit, you know, I feel like a standard, you know, run of the mill politician would immediately say, no, you know, I'm I'm better than that.

Whatever.

He left the door open.

He was honest.

He said, you know, if I thought it was something that could be a benefit to the state, I'm not going to tell you I wouldn't think about horse trading for it, because that's kind of how politics works.

And I think it's a little refreshing to hear from people saying, you know, yes, politics isn' always the cleanest, healthiest, easiest thing to do, but if it's for the betterment of the state, I'm willing to get my hands dirty for you.

You know, I think that there's a lot that we don't know about Mike Dugga as a statewide candidate.

Right.

And it's really important to note that, like how much of our national political discourse, which is in our state political discourse, is defined by the culture wars these days.

I think back to ten years ago when I was a college newspaper reporter trying to get Rick Snyder you know, four years as governor to take a stance on gay marriage in an interview.

And he refused to take a position.

I don't think that Mike Duggan can necessarily get away with that today just because of how much more engaged everyday people ar in the minutia of social issues.

By the way, your friend Rick Snyder also refused to say that he horse traded.

Yeah, absolutely.

Guess what?

There were no horses in Ann Arbor, but he was trading something.

Go ahead, guys.

Well, I my big takeaway is tha he answered all the questions.

I mean, I felt like you got a clear answer.

Yes, no, or I'm not going to answer that question.

He started he started to fog at the beginning a little bit on the horse trading question, because I assume nobody's ever asked him that.

Okay.

What you like to do first impression questions because they have to think on their feet.

Okay.

And it says a lot, but eventually brought him back to it.

And he gave a very good answer.

Okay.

Yeah.

No, I mean, and that' I think what gets to the core of especially somebody who's trying to position himself as a guy who's for people fed up with politics.

Right there, you know, you have a politician who's answering things outright, who's not sneaking around the questio and will openly tell you, yeah, I'm not going to answer that right now.

I'm not going to tell yo who my LG picks out right now.

I'm not going to round them up.

I'm not ready.

Here was a date, though, that I think I might be ready by.

You'll know before, because here's the filing deadline.

You know, for somebody at home who's seeing Mike Duggan for the first time, that has to be a breath of fresh air.

Yeah, And I think that's actually a really important question, because a big question in my mind is how Duggan works with the legislature.

And I know you guys got into a little bit like what party breakdown would you prefer and things like that.

But he handled that perfectly.

He said, I'm not to offend anybody.

I'm not going to pick up sides.

I'll play with the cards that I'm dealt.

Yeah but I do think that he's kind of coming from this executive background, right?

So it's obviously a strong mayoral system.

He has this hospital background.

You know, he ran the Wayne County prosecutor's office.

So I do think that, you know, getting peopl all going in the same direction is something that I'm curiou as to how he's going to handle.

But again I think that that's easy to do when you're not looking at specific policy issues, especially the wedge issues that are dividing the electorate.

We saw in the House this week this bathroom bill come up that would have essentially required people to stay in the bathrooms, in schools and the sex that they were assigned at birth.

If he ends up becoming elected governor and he has a Republican legislature rep, Joseph Fox told me this week that they're like they're not going to pass this bill this term, even though they're putting it through committee.

But this is practice fo when they take the legislature.

So Duggan has to deal with that bill.

He's going to have to and it comes to this that he's going to have to take a position.

And that was one thing that I did notice that when he was talking with you, you know, one of you guys on the panel had brought up, you know, hey, you're dealing with a situation like right now in the legislature, how would you fix it?

And his response is more or less, well I wouldn't be in the situation.

I'd have I'd have coalitions of people.

I'd be working with people that did feel like a bit of a cop out, you know because you are going to be in a there's always a guarantee you will be in a situation as governor where you will not hav all of your allies at your table and you will have to make difficult decisions.

Out that answer.

Because what he basically said, this coalition, which is now supporting me, will help me get legislation through.

I mean, really, you.

Know, you know.

It strikes me that part of the strength of being an independent candidate is not only do you offer a little something for everybody, but you are setting yourself up where everybody knows they're going to be disappointed at some point.

So I think that strategically, you can work that to your advantage.

So on balance, it was a good performance.

I thought he.

Did a great job and I think you can see why he's got the support he's got.

While I think he may be the only candidate with an extremely big staff at this point, he's raising the money to do it.

He's running, I think, the most professional campaign at this point.

It's assessable.

It's raising money, it's geared up.

We've got fundraising emails going out.

It's it's running on it' running at full speed right now.

But I think, as I've said repeatedly on this program, that he needs that now, because while there' going to be this primary battle in the major party candidates when they get into the general, they're going to have party infrastructure behind them, county chairs in every county in the state.

And he's not going to have that ground game right out of the gate.

And he doesn't hav that fundraising infrastructure either.

So he has to build it now.

And if he doesn't, he' not going to have the trajectory that he needs to mount a challenge.

And it's going to be a candidate to watch, especially as the Democrats have pulled away the support that they've traditionally offered to him.

And that's going to be a big hurdle for him to overcome.

We'll see how it plays.

Thanks, guys Everybody have a safe weekend.

Okay.

Into mothballs, you guys.

Next week.

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