Budget Surplus in Michigan

By: Fay Li Email
By: Fay Li Email

In fiscal year 2011, Michigan went through steep budget cuts. After reductions, the state says it's come up with $500 million in surplus. Now, the suggestions on where the money should be spent are pouring in.

"One of the best ways we could spend this money is to put it in the income tax credit," said Judy Putnam, spokesperson for Michigan League for Human Services.

The tax credit will go toward helping low income working families, something the Michigan League for Human Services consider vital to the state's economic growth. Other suggestions include increasing funding to education and Medicaid.

But how much can $500 million really do? Experts say while it's not an insignificant amount, it's still just a drop in the bucket in the state's budget.

"It's about 1% of the state budget. This is not an enormous amount of money although it might seem like it to some of us," said Peter Pratt, president of Public Sector Consultants.

Pratt says the good news is the surplus shows Michigan's economy is moving in the right direction.

"We have been down so long in this state, our economy has been down. The fact that there's a surplus is very exciting and encouraging to people," Pratt said.

If things continue going well, experts say we could also see a surplus in fiscal years 2012 and 2013.

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