Small Revenue Increase Won't Mean Big Budget Increase

The long-anticipated Revenue Estimating Conference indicated that the Michigan economy has come a long way from the depths of the Great Recession, but not far enough to meet the hopes and wishes of all those seeking budget increases. University of Michigan economists expect Michigan to continue a sustained but “modestly paced recovery” through 2014.

General fund revenues are up $33.9 million and the School Aid fund is up $112.5 million from the January forecast for FY2011-12. Lower than anticipated Medicaid and welfare caseloads free up an additional $152 million general fund in the 2011-12 budget. State Budget Director John Nixon said the “essentially just under $300 million in revenue for 2012” will help but not radically alter the look of the budget.

The consensus seems to be that the new money does not change the direction Governor Rick Snyder and legislative leaders are taking in the drafting of the FY 2012-13 budget. Senator Roger Kahn (R-Saginaw Township), the Senate Appropriations Committee chair, and Representative Chuck Moss (R-Birmingham), the House Appropriations Committee chair, said they anticipated that the budgets would not authorize spending much beyond what the Legislature has already passed.

With the completion of the Revenue Estimating Conference , the administration and Republican legislative leaders will set targets for department and major budget areas by early next week; these targets will enable the House and Senate Appropriations subcommittee chairs to finalize their respective budgets and move toward final budget passage by the self-imposed June 1 deadline.

posted by PAA Online , Friday, May 18, 2012 11:56 AM
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