State’s projected general fund budget similar to recent years | Michigan Radio
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State’s projected general fund budget similar to recent years

Jan 11, 2019

Credit Steve Carmody / Michigan Radio

Michigan can expect to see some economic growth over the next few years – but for the most part, the state’s economy is expected to stay flat.

State money experts gathered with economists at the state’s Consensus Revenue Estimating Conference on Friday to figure out how much money will be in Michigan’s purse for the next budget.

The amount of money in the state’s general fund budget is expected to grow, but not by a lot. 

Chris Kolb is the state’s budget director. He says the next step is figuring out how to spend the more than $10 billion in general fund money expected to be available for the next spending year.

“We’re having those preliminary discussions. These numbers are very important to get so that we can really start working with real numbers to put together that presentation,” he says.

Kolb says the amount of money available is similar to recent years. He says that complicates things because the state’s needs are different than when he came to Lansing about two decades ago.

“What are our needs? What are our costs? How are those changed in 20 years? And that’s the reality. So we have to look at that not only this year, but going forward. The numbers don’t increase much,” he says.

Governor Gretchen Whitmer will present her budget proposal to the state Legislature within the next few months. From there, negotiations on what the final budget should be will really start to ramp up.

Ripple effects from layoffs

Cuts at General Motors could eventually cost 16,000 Michiganders their jobs. That’s according to economists at the University of Michigan.

Last year, the company said it could possibly lay off thousands of workers. The economists’ prediction includes ripple effects from those cuts.

Gabriel Ehrlich is an economic forecaster for the University of Michigan. He says many of the cuts to white-collar employees could happen in Michigan. But because Michigan’s economic recovery is so high, the cuts won’t have as strong of a ripple effect.

“Because the economy and especially the labor market is strong right now. So with low unemployment, we’re estimating that it’s going to be easier for some of the folks who lose their jobs to find new work than it might be in a weaker labor market,” says Ehrlich.

The predictions were part of the conference in Lansing on Friday.