State Budget Takes Another Hit

By: Liam Martin Email
By: Liam Martin Email

Lawmakers will get a rude awakening upon their return to the capital tomorrow -- their state is hemorrhaging tax revenue.

"June revenue, actual collections, came in about $60 million less than what we expected in June," said Gary Olson, director of the Senate Fiscal Agency.

And another $60 million shy of tax-revenue expectations for May. That according to a report released Monday.

Here's the breakdown:

Tax Revenue Shortfalls

- May: $60 Million Below Expectations
- June: $60 Million Below Expectations

- Total Tax Revenue Down 13% From Last Fiscal Year

Between May and June, Michigan collected $120 million less in tax revenues than it had projected in May.

That means the state's budget hole is deeper than originally thought.

So far this year -- in fact -- tax collections are down a full 13 percent, or $1.8 billion.

The main culprit?

"The income tax and sales tax are two large sources of revenue. They're both extremely weak," Olson said.

To be more precise, income tax in the state was down 20 percent in June from that month a year ago. Michiganders are working less, and spending less -- a sign of the times, as automakers close plants and cut workers.

It all begs the question -- how can the legislature make up the difference?

"We're looking at a couple of billion dollars -- that's billion, with a 'B'," said state Rep. Rick Jones, a Republican from Grand Ledge. "So I would expect that every state program, every service, would face some sort of a cut."

Other solutions -- dig deeper into the $7 billion dollars Michigan has received in federal stimulus funds.

Or --

"And the other option, always, is raising revenue," Olson said.

Raising taxes, in other words. Both Olson and Jones say it might come down to a choice between the lesser of those three evils.

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  • by Anonymous on Jul 24, 2009 at 06:11 AM
    So this is the time to move into the new police building for 5 million a yr?Time to lay off state police,cut programs to the poor,and the list goes on.We can pay for one fancy building yet go with out fire dept ect.This goes on in mi.Very bad planning by thoes running this state.Jobs have been ran out of mi.They were offered better in other states.Or over seas.Jenn does not give an inch on her way or no way.Now mich is in so many messes.It just seems the ones running this state would do what ever to get jobs here.It must be easier to cut programs,services and hurt the poor ones by signing a piece of paper instead of getting jobs here.After all she will be out of office soon and why should she care.Many things being cut ect does not hurt her or many she knows.The rich get richer and still have so much.How do they sleep at night?Looks like the 3,000 yr old bible knows what it is talking about.All is comming to pass.
  • by Brad Location: Dansville on Jul 14, 2009 at 03:32 PM
  • by bev Location: holt on Jul 14, 2009 at 08:47 AM
    As mi gets worse?Where are all the jobs needed?Why did many leave mi over the last few yrs?The last 7 really?Look at all that road construction going on.It isn't being done for free and alot was more of a fancy up mich more deals.The big car companies got bail outs while the car related ones sink into the hole and go under.Can't see how job loss,lay offs even at the state levels will produce tax money.The gov in mich keeps on cutting their throats by letting the higher paying jobs go under,and the low pay jobs surely won't raise many taxes.How many jobs will come to mi?Not many with high crime,poor schools,proverty everywhere,all the homeless,not alot of police force,high costs of gas due to tax on it,high utility costs and the bad list about mi goes on.Yet jenn gets in vacation time to bring jobs to mi,yet so few if any come.We now have proof some should of not been in offic`e this long.It's sad to see mi like this when no one can or has done anything about putting a stop to it.
  • by disgusted Location: lansing on Jul 14, 2009 at 05:28 AM
    With decisions like forcing the closing of revenue producing departments, does it surprise anyone?
  • by shelley Location: lansing on Jul 14, 2009 at 04:10 AM
    Well maybe having the state employees home for forlough days doesn't help either. They aren't paying income tax on those days, they aren't buying the coffee, lunches and fuel for those days and they aren't spending as much on other days to save up money to compensate for the days off. Jennie is such a brilliant leader. Rumor is there will be 21 forlough days next fiscal year, oh great more income tax not sent in, more sales tax not sent in, more fuel tax not sent in. Lets just keep going in this direction, pretty soon there won't be anyone making money in Michigan except Jennie and her legislature.
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