Mich. Economic Forecast Sunny, Although Some See Rain
The optimism in the room was stronger than it has been in years but not everyone is buying it.
Fiscal analysts were meeting for a revenue estimating conference at the state Capitol. They’ll come up with a consensus estimate later of how much money the state should expect to bring in through the next fiscal year that begins in October. Preliminary estimates have pegged the budget shortfall for the year at about $1.8 billion.
The biggest budget problem is the scheduled expiration of more than $1 billion in temporary federal aid and other one-time assistance that is helping Michigan pay its bills this fiscal year.
State economists agreed Friday that tax revenues to the state might come in a little higher than previously expected in the next budget year. But those possible gains will be more than offset by the loss of temporary financial assistance from the federal government.
Economists expect the state will add jobs this year and next, causing the unemployment rate to slightly improve.
Michigan’s economic heartbeat is getting stronger but we are still in the recovery room, according to U of M Economist, George Fulton, told WWJ’s Lansing Bureau Chief Tim Skubik.
Rep. Dave Agema from West Michigan, a conservative Republican. disagreed.
“I’m not a believer because I think you tell where a person is going based on where they have been, “where have they been?” They have been over-estimating, so I’m anticipating that they are doing the same here.” Agema added. The U of M economists have been wrong before and they’re wrong now.
No major financial problems are forecast for the state’s current fiscal year.
The Associated Press contributed to this report.