Budget shortfall fears dim as Michigan sees unexpected surplus

Budget shortfall fears dim as Michigan sees unexpected surplus

A previously expected budget shortfall for the coming fiscal year has vanished because of a boost in federal aid and an improvement in Michigan’s economy that has increased state tax revenue collections above initial forecasts.

But the state’s budget and economic experts warned Friday during a consensus revenue meeting that there should be caution moving ahead because of variables on the horizon such as COVID-19 cases, vaccine uptake and federal stimulus spikes and dips.

In June, state experts expected a $3 billion budget hole for the upcoming fiscal year that begins in October, and Gov. Gretchen Whitmer and Republican legislative leaders at the time called on the federal government for more help. 

Michigan’s tax revenue for fiscal year 2021 is coming in $1.2 billion higher than was predicted in August, but still about $505 million lower than last year’s revenue, state finance officials reported Friday during the Consensus Revenue Estimating Conference.

Officials also boosted their predictions for 2022, when they expect a $874.8 million boost from the August estimate. 

As books close on the 2020 fiscal year, the state expects to have a $3.7 billion balance left over, with a $2.5 billion surplus in the General Fund and $1.2 billion cushion in the School Aid Fund, according to a Senate Fiscal Agency report. That money can be carried into the new fiscal year and spent.

Source link

Be the first to comment

Leave a Reply

Your email address will not be published.


*