LANSING — State experts forecast Michigan’s economy to continue to improve and resulting state tax revenues to come in greater than previously projected, said Sen. John Proos, who urged fiscal restraint.
“It is great news that Michigan’s economy is rebounding and that our state’s job growth is outpacing the national average, but more work needs to be done to get to where we want to be,” said Proos, R-St. Joseph. “Michigan’s unemployment rate recently fell below 10 percent for the first time in three years, and the state added jobs last year for the first time since 2000. These facts are strong indications that our efforts to revitalize our great state are working.”
The announcement came after state fiscal leaders from the Senate, House and executive branch, and economists from across the state met Friday for the annual January Revenue Estimating Conference at the Capitol. Their economic and tax revenue projections are used to draft budget proposals for the next fiscal year, which will begin Oct. 1.
“As the economy improves and jobs are created, state tax revenues also increase, and it is estimated that we may have a positive balance next year,” said Proos, a member of the Senate Appropriations Committee. “But it is only a projection. There are many national and worldwide uncertainties that could quickly change that figure and long-term state budget pressures that must be addressed.”
Proos noted that there remains a wide disagreement on the amount of any extra revenue, with the Senate Fiscal Agency actually projecting a deficit in the next fiscal year if the state maintains current spending levels.
“We achieved much last year toward getting Michigan’s fiscal house in order, like balancing a $1.5 billion deficit and making state government more efficient; which is the best way to encourage future growth. But we still face budget challenges,” Proos said. “Michigan still has unfunded liabilities that exceed the state’s entire annual budget. We owe it to Southwest Michigan workers and taxpayers to use any additional state revenues to pay down debt and reduce our burden of debt which make it impossible to invest in priorities like education, roads and the infrastructure of our state.”