Michigan Expects $575 Million One-time Budget Surplus

By DAVID EGGERT
Associated Press

LANSING (AP) - Michigan has a one-time budget surplus of $575 million, some of which will be used to address lower tax revenue estimates for the current budget and to bolster savings, the state budget director said Thursday.

John Roberts released the estimate after Gov. Rick Snyder's administration and legislative economists settled on new budget forecasts at their biannual revenue meeting inside the Capitol.

The state's two main accounts, the school aid fund and general fund, will grow by a combined 0.9 percent this year, or $194 million — $149 million below an estimate from last spring. Experts partly blamed less growth in sales tax revenue, which primarily pays for schools, on lower fuel prices.

The funds will be $725 million, or 3.3 percent, higher in the fiscal year that begins in 8½ months, mostly unchanged from the prior projection, according to the consensus forecast.

"We want to make sure we're being conservative in spending the money to make sure we're smoothing" lower estimates in the current year, Roberts said.

"We still expect 3 to 4 percent growth in the school aid fund each year, it' just lower than what we thought before. It's still growing," state Treasurer Nick Khouri said.

Roberts declined to specify exactly how the surplus could be spent until the Republican governor unveils his 2016-17 budget plan in February, but he said it could be put toward expenses such as road construction. A supplemental budget bill solely focused on Flint's drinking water emergency will be introduced in the next couple weeks and for now likely will focus on shorter-term "immediate needs" such as activating the state emergency operations center and the National Guard, he said.

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