Many lawmakers expect Michigan’s budget woes to be reinforced at a meeting with economists today in the Capitol.
The directors of the House and Senate fiscal agencies as well as Treasurer Doug Roberts will report to lawmakers on how much the state can expect to collect in taxes this year.
“I think this year is going to be dominated by talks about the budget,” said Rep. Gretchen Whitmer, D-East Lansing.
Whitmer sits on several budget health committees, including community health, state police and higher education.
The Associated Press reported general fund will run about $880 million over budget for the fiscal year beginning Oct. 1, and the School Aid Fund will be nearly $500 million short.
The state budget will be nearly $1.4 billion behind for the upcoming year, according to a recent report by the Senate Fiscal Agency.
The most easily trimmed areas already have been hard hit by the lagging economy, which makes cutting state funding difficult to do without seriously endangering programs and services.
The main topic at the conference will be when and how much the state and national economy will rebound this year. Gov. John Engler hopes his Broadband Initiative will help Michigan come out on top.
“It’s going to be a busy year,” said Engler’s spokesman Aaron Keesler..
The state dipped into its Budget Stabilization Fund to help cover budget shortfalls last year, withdrawing $500 million from the $1.1 billion reserve.
Increasing costs for state programs such as Medicaid and interest payments on state bonds add up to stagnant state revenues, creating a serious budget dilemma.
Public universities could be under pressure to raise tuition to make up for the difference between a 1.5 percent increase in state funding last year and the 5 percent increase they enjoyed in previous years.
Legislators have suggested dipping into the rainy day fund, delaying business tax cuts and adding an additional 0.1 percent income tax cut to help boost the budget toward the positive.
The governor will outline his budget plans at the State of the State address on Jan. 23. State budget director Don Gilmer will present the governor’s budget proposal Feb. 7.
