There’s less money than expected for Governor Rick Snyder and the Legislature to put together the next state budget. There’s also a shortfall in the current fiscal year.
John Roberts is Governor Snyder’s budget director. He says the governor and state lawmakers can close the budget gap without jeopardizing money to address the Flint water crisis and the looming financial collapse of the Detroit Public Schools. “Flint and DPS will continue to be a priority for us,” he said. “We see a way to balance with keeping those priorities funded.”
The shortfall is due to high Medicaid caseloads and lower-than-expected corporate and sales tax revenues. In 2016, the shortfall is $147 million, which brings the combined General Fund and School Aid budgets to $21.8 billion. In 2017, the shortfall is $159 million, and in 2018, the projected shortfall is $63 million.
Lawmakers also say they’re not in a panic. “I think there’s a way very easily to protect K-12, to protect revenue sharing, Detroit and Flint, and have a balanced budget,” said Representative Al Pscholka (R-Stevensville), chairman of the House Appropriations Committee.
Pscholka says some strategic budget shaving will go a long way. His plan to balance the budget also includes ending a tax loophole that benefits auto insurance companies and costs the state $80 million a year.