News Story

State Revenue Increasing by $640 Million

Michigan's projected deficit is because of overspending

With a liberal columnist writing about what is characterized as a “tax-cut fueled budget deficit,” taxpayers may not realize that government economists say the two largest funds in the state budget will grow by $640 million from 2015 to 2016.

The combined revenues for the state budget’s General Fund and School Aid Fund will increase from $23.87 billion in 2015 to $24.51 billion the next year, according to the Consensus Revenue Estimating Conference's report. The estimate is a result of work done by the Senate Fiscal Agency, House Fiscal Agency, and Treasury Department.

State spending in those two funds is projected to reach $24.20 billion in 2016. The state's projected deficit is only in the General Fund revenue, which is just a part of the entire state budget.

Chris Douglas, an associate professor of economics at University of Michigan-Flint and a member of the Mackinac Center’s board of scholars, said the state has a spending problem.

“But I don’t think it can be easily cut,” Douglas said in an email.

He said 75 percent of the state budget is spent on health and human services and education.

“I think these two categories continue to put pressure on the budget over time,” he said.

Douglas said Medicaid and the increasing costs of paying for school employees’ pensions will continue to be serious issues for the budget.


See also:

Despite GOP Dominance, Michigan Budget Keeps Growing by Billions

State Budget Has Increased Almost $5 Billion the Past Three Years

Budget Watchdog: State Has Billions In Unbudgeted Costs

If Sales Tax is Passed, Michigan Would Have the Second-Highest in the U.S.

$2.1 Billion in Michigan Budget Reforms