Lansing - Economists presented a gloomy economic forecast for Michigan legislators Tuesday, but there is a light at the end of the tunnel.

“A slower economy and fewer jobs means less revenue,” said MSU economics Professor Charles Ballard. “The situation is serious, but it’s not nearly as bad as what the university faced in the recession of the early 80s.”

A recession was declared in Michigan last March, but with an average recession lasting about 11 months, Ballard said it has likely run its course.

The Michigan budget is facing a deficit of $1.4 billion for the 2002-03 fiscal year. In a status report released by the Senate Fiscal Agency, the forecast predicts the recession in 2001-02 will reduce job growth and increase unemployment.

To help the economy recover, Ballard predicts lawmakers will be looking for a combination of increasing revenues and cutting expenditures.

“What’s going to be hotly debated not only in the legislature but also in the gubernatorial campaign is what’s the appropriate mix,” said Ballard. “When you’re fighting over a billion and a half dollars, people get upset.”

The expected rebound in economic growth will not be enough to offset the loss in revenue from the scheduled tax rate cuts, according to the State Senate report. Production is expected to increase, however, as the automobile industry begins to replenish its inventory.

Ballard said raising taxes isn’t out of the question, but most likely they will come in the form of fees.

Gov. John Engler’s broadband proposal would impose a fee of a few cents per foot of cable laid.

“What they plan to do is call those fees, and fees are different,” said Ballard of the expense. “Those are not taxes, we wouldn’t raise your taxes.”

How budget cuts will affect MSU is yet to be seen. Ballard said he expects the university will continue fund-raising efforts, push Wharton Center to sell more tickets by choosing more popular shows, and require employees to make bigger health care co-payments.

“MSU has time to plan,” Ballard said.

The difficulty comes in deciding what gets cut and what will remain a priority.

“I hope that education remains at the top of our priorities,” said state Rep. Gretchen Whitmer, D-East Lansing.

“It’s the best investment that we can make.”