The state of Michigan is flush with funds as Governor Gretchen Whitmer and members of her administration are drafting their next state budget proposal. A state board determined Friday that the governor and the Legislature have almost $20 billion more than anticipated to work with over the next few fiscal years.
Much of it is due to federal recovery funds and COVID-related changes in spending patterns.
“Our revenues are in a great position,” said Michigan Treasurer Rachel Eubanks. “However, most of the strength in those revenues is transitory. These revenues present opportunities for the state. However, as we move forward, we must be thoughtful and deliberative about our policy choices.”
Eubank said that means not making ongoing commitments with funds that will evaporate within a few years.
A lot of that money comes from federal recovery funds. Also, people changed their buying habits. They purchased more goods, which are typically taxed, and spent less on services, most of which are not.
“We’re going to see areas where we can provide support for education, clean water, jobs,” said Budget Director Chris Harkins. “That will all be part of the plan as we go forward, and I think we’ll also see some of that as we kick off the State of the State in a few weeks.”
Whitmer is scheduled to deliver her annual State of the State speech Jan. 26. That will be followed soon after with her proposed budget presentation to the Legislature.
Harkins cautioned the ups and downs of COVID will affect these predictions and the spending plans built around them.
“We are still recovering from a pandemic,” he said, “so these numbers can and will fluctuate as we move forward.”
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