Checking in on the state's budget

Jan 13, 2012

We all like to know the balance in our checking or our savings account, right? My guess is, every so often, you go online or you go to the bank and you see what your balance looks like. Maybe, if you’ve got a few extra bucks, you buy yourself something nice. Or, maybe the account is a little dry and, then, you know it’s time to cut back. Well, just like you, the state has an account… given, it’s probably MUCH larger… with many more zeros than you have… but the idea is the same.

This morning, in Lansing, the officials that keep an eye on the state’s bank account met at what’s officially called the Revenue Estimating Conference. Rick Pluta, Lansing Bureau Chief for the Michigan Public Radio Network was at the conference, and he spoke with me this afternoon from the Capitol building about what the numbers for the state's "bank account" look like for 2012.

To boil it down, consider some basic questions you might ask about your own finances:

  • How much? : Pluta reports that a figure of $1 billion in budget surplus has been tossed around a lot by reporters over the last few days, but once upcoming spending pressures for 2012 are factored in, that number comes down to roughly $457 million.
  • Spend or save? : Pluta says that according to the state's budget director, some surplus money could go into things like Medicaid and schools, but to improve the state's bond ratings, a portion will also likely go into savings.
  • What about the economy? : Economists also weighed in at the conference and according to Pluta, the general consensus was that Michigan saw decent economic improvement early on in 2011 with growth of about 64,000 jobs for the year, but in recent moths things have become more sluggish--a trend that is expected to continue in 2012. Economists predict growth to the tune of roughly 27,000 new jobs in the state.
  • What does the governor think? : Okay, so maybe you wouldn't ask yourself that question when thinking about your banking, but Pluta reports that regarding the state's money, Governor Rick Snyder plans to release recommendations soon, both about how the surplus should be used and what the next fiscal-year budget should look like.