LANSING, Mich (WLNS) – State lawmakers were hoping that the economic numbers would produce more revenue for them to spend on repairing the roads, perhaps even more money on the Flint water Crisis, and on other pet projects that lawmakers want to fund.
However, the state’s top bean counter will formally disclose tomorrow that instead of a surplus, the state has a temporary deficit, to the tune of between $350 and $391 million.
With everyone saying the state’s economy is in pretty good recovery mode, how come there is a deficit?
First of all new car sales are flat so the sales tax revenue has not grown.
Second, with the lower gasoline prices, the state is collecting fewer sales tax dollars at the pump.
And third, big business tax collections are down.
So as budget writers put a ribbon on the new budget, their job just got more difficult.
“Well, they have to do some revisions with the budget or they have to find another source of revenue,” said former House Fiscal Agency Director Mitch Bean. “Now one thing they could do, for example, is there is a deposit scheduled to go into the rainy day fund they could either eliminate or reduce those.”
When asked if this is a trend or a blip, Bean says “it looks like a trend where the economy is slowing, not going into recession necessarily, but it’s slowing.”
Bean said the recovery isn’t over, but it is slower than it was.
So as the June first self-imposed deadline creeps up to finish the budget, lawmakers will shift gears.
Instead of spending more of your money, now they will have to spend less.
Lawmakers like to spend rather that cut? “I’m shocked,” laughed Bean.