News Story

Up 10 Percent And $3.2 Billion, State Still ‘Starved For Revenue’

Long-time budget analysts stuck on half-empty

Tax and fee revenues collected by the state of Michigan have increased by $6.8 billion over the past eight years. After adjusting for inflation, this is equivalent to a $3.2 billion increase in real revenue over those eight years.

But two economists claim they aren’t seeing the jump in revenue, according to an article in the Detroit Free Press.

The article did not mention state revenue numbers; the ones cited here are from the Senate Fiscal Agency.

State revenue collections (not including local and federal money) rose from $26.2 billion in the 2010-11 fiscal year to $33.1 billion appropriated in 2018-19.

In inflation-adjusted terms, that $26.2 billion would be equivalent to $29.9 billion in 2018-19 dollars, so the inflation-adjusted annual revenue increase was actually $3.2 billion. That’s still an increase of more than 10 percent in real spending power for the state government.

"We’re just starved for revenue," Michigan State University economist Charles Ballard said in the Detroit Free Press article, which also predicted an oncoming recession. “For decades, the answer to all questions in Lansing has been tax cuts. ... The first rule of holes is, if you’re in one, stop digging.”

“All these wonderful things that were supposed to happen, I don’t see it,” said Mitch Bean, who was director of the state House Fiscal Agency for 18 years. “The economy is doing better, but the whole nation’s economy is doing better. Thank goodness we have such a low unemployment rate, but what are the jobs? Are they jobs people can work at and make a living at, or do you still have to have two and three jobs to get by?”

Ballard didn’t respond to an email seeking comment. Bean responded to an email, but he claimed the Senate Fiscal Agency numbers that it cited included federal dollars including Medicaid expansion money. They did not.