Tagged: john nixon

National credit rating agencies are warming to the state of Michigan.

Today, Fitch and Standard & Poor’s joined Moody’s in upgrading the state’s credit rating.

An improved credit rating may help the state get more favorable rates when it needs to borrow money.

John Nixon is the state budget director. He says the state has cut its long-term liabilities and taken other steps to get its ‘house in order.’

“We’ll continue that….it’s a slow process…we didn’t get to where we were overnight….we got downgraded over a series of years,” says Nixon.

With President Obama and Congress failing to come to a budget deal, automatic spending cuts have gone into effect. There have been dire warnings about the impact of those cuts though the effects won’t be felt immediately. But Michigan gets over half its budget from the federal government which means the state will have to face the impact of the cuts if impasse isn't resolved soon. We speak with Budget Director John Nixon.

The state budget director says credit agencies won’t upgrade Michigan’s rating because of proposals on the November ballot.

John Nixon today spoke alongside opponents of Proposal Five. It would require a statewide vote or two-thirds majorities of the Legislature to approve a tax increase.

But Nixon said all the initiatives cast doubt about the state’s economic future.

Governor Rick Snyder calls for a slight boost in spending in his budget proposal for the coming fiscal year – with more money for police, schools, and universities. The governor says this year’s spending plan is built on tough decisions made last year.

Snyder was flanked by Lieutenant Governor Brian Calley and Budget Director John Nixon as he took a seat in front of a packed house. He presented his budget plans to a joint meeting of the House and Senate appropriations committees. The governor started out with a short history lesson, reminding lawmakers of how things have changed since his budget presentation from a year ago. “It was a mess,” Calley said.

In 2011, the governor called for taxing pensions; taking $400 million dollars from the School Aid Fund to help pay for universities –  which still saw a cut in funding – and concessions from public employees. “We had to address a billion and a half dollar deficit. We addressed that. We had to ask for shared sacrifice from many people, a lot of difficult decisions and I appreciate a lot of understanding by a lot of people,” Snyder said.

This year, the economy has improved, and so has revenue. The governor called for modest increases to money for schools and universities – much of it linked to improving student performance. Local governments could also see more if they find ways to become more efficient.

We are now just a few days into the state’s new fiscal year. State Budget Director, John Nixon gives us an update on the state of Michigan’s finances.

Nixon says many states relied on federal stimulus money, and now it's time to look at other options.

“We had a huge infusion of stimulus money and then there was a big cliff because once that stimulus money went away all the states are scrambling saying, “oh my gosh how do we keep our programs whole?” Well that’s what we’ve done. We cut a billion and a half dollars of spending out the budget and we balanced the budget.”

Governor Rick Snyder’s budget director has given his OK to Northern Michigan University’s tuition increase for the fall term. The decision means the public university in Marquette will not face sanctions for exceeding the state’s tuition increase cap of 7 percent. NMU said the university’s rate increase should not be measured against the fall 2010 rate after students got a discount. The university reduced student costs last year based on a windfall of federal stimulus dollars.

A spokesman for Budget Director John Nixon says he does not put Northern’s tuition hike in the same category as fall increases at Wayne State and Michigan State universities. He says MSU and Wayne State technically complied with the law, but violated the intent of efforts by Governor Rick Snyder and the Legislature to hold down tuition increases despite budget cuts to higher education.

The amount of money Michigan has to spend in its general fund for everything from prisons to health care dropped by nearly 25 percent over the past four fiscal years amid the recession and shrinking tax revenues. Yet the state's school aid fund remained relatively healthy, protected by earmarks for public schools.

State budget director John Nixon thinks those earmarks merit another look.

"It's not that I'm saying we need to cut the school aid fund ... (but) a lot of this stuff was put in place 15, 20 years ago when Michigan looked totally different," he said during a recent interview with The Associated Press. "We just need to strip things down and say, `This is the money we're bringing in, this is where it's going. Is it lining up appropriately?"'

Nearly three-quarters of the sales tax collected annually goes to the $13.3 billion school aid fund, as well as nearly a fourth of the income tax revenue, 42 percent of cigarette tax revenue and a third of the money raised by the use tax and the Michigan Business Tax. The school aid fund also receives all of the money raised through a statewide 6-mill education property tax, the real estate transfer tax, the state casino wagering tax and the net proceeds from lottery sales.

State Budget Director John Nixon says he’s unsure how Michigan will make payments to food stamp and welfare recipients and Medicaid providers if the federal government defaults, the Associated Press reports.

“Michigan draws about $400 million a week from federal funds that could suddenly dry up next week if the nation hits its debt limit and cannot pay its bills… Forty-four percent of Michigan's $45 billion budget is supported by federal funds, as are 25 percent of state workers.” the AP notes.

In an interview with the AP, Nixon says the state will do what it can to, “keep things moving.”

Meanwhile, Governor Snyder said yesterday that a possible default has him concerned:

“One of the challenges is (the federal government) haven’t told us exactly what it’ll mean. So we’re prepared for a number of scenarios.”

Lindsey Smith reports, "Snyder says Michigan could move money around to cover things like Medicaid payments until the federal government reimburses the state." Snyder said:

“I think we’re going to be in reasonably good shape, as long as it doesn’t go for an extended period of time.”