Proos: State budget deficit pegged at $1.8 billion

LANSING – Michigan’s economy is expected to improve over the next two years, yet the state still faces steep budget challenges ahead, said Sen. John Proos, R-St. Joseph.

The announcement came after state fiscal analysts met Friday for a revenue estimating conference at the Capitol.

“The good news is that our state economy seems to be doing better than the country as a whole. That is a promising sign for Michigan families here in southwest Michigan and across our state who are struggling to make ends meet,” said Proos, a member of the Senate Appropriations Committee. “The bad news is that Michigan is still projected to have a $1.8 billion state budget shortfall for 2012.”

Proos noted that a key reason for the size of the state budget deficit is the expiration of more than a billion in federal stimulus dollars.

“Because of the special influx of federal money, the necessary reforms and spending reductions weren’t made last year. Today’s news illustrates that we as a state cannot afford to continue spending at that level,” Proos said. “For Michigan to attract new businesses and create jobs, we must put the state’s fiscal house in order. Skyrocketing costs must be addressed and repeated wasteful spending needs to be eliminated.”

The annual January Revenue Estimating Conference is a meeting of fiscal leaders from the Senate, House and executive branch, as well as economists from across the state. Their projections are used to draft budget proposals for the next fiscal year, which will begin Oct. 1.