Michigan State Treasurer, Fiscal Agencies Lower Revenue Projections for Remainder of '08 and FY 2009

By newsdesk - Posted on January 14th, 2008

Michigan State Treasurer Robert J. Kleine, Senate Fiscal Agency Director Gary S. Olson, and House Fiscal Agency Director Mitchell E. Bean today reached a Consensus Agreement on economic and revenue figures for the current 2008 Fiscal Year and for FY 2009, which begins in October.

Net Fiscal Year 2008 GF-GP revenue is projected at $9.247 billion, $234 million below estimates the FY 2008 budget was based on. Approximately $114 million of this decline was due to replacing the service tax with the MBT surcharge. Net FY 2008 SAF revenue is estimated at $11.353 billion, down $136 million from estimates the current budget was based on. Net GF-GP revenue for the 2009 Fiscal Year is estimated at $9.194 billion with net FY '07 SAF revenue forecasted to be $11.871 billion.

"We continue to see very slow growth in state tax revenues," said State Treasurer Robert J. Kleine. "Annual sales tax collections have grown less than the rate of inflation for six consecutive years, while, adjusted for inflation, General Fund revenues have dropped nearly 40 percent since 2000. Moving forward, the slowing national economy will reduce 2008 revenues below levels assumed in the budget."

Last week, State Budget Director Bob Emerson released the State of Michigan Comprehensive Annual Financial Report (CAFR) for fiscal year 2007, which showed a surplus of $353 million ($259 million in GF/$94 million in SAF). Spending constraints, implemented by Governor Granholm and department directors, helped created the surplus.

"The steps we took in 2007 to get our fiscal house in order prevented massive cuts in the current year budget," Emerson said. "However, as the Governor has said repeatedly, we must continue our efforts to limit state spending and implement government reforms."

Governor Granholm will use today's consensus revenue figures to develop her FY 2009 budget, which will be presented to Appropriations Committees next month.

Source: Michigan Governor

Bookmark/Search this post with: