Thursday, January 03, 2008

Michigan ends year in the black

This is excellent news.

A $353-million surplus spilled out Wednesday as the state closed the books on the 2006-07 fiscal year, giving lawmakers and Gov. Jennifer Granholm some breathing room in the new year.

Leslee Fritz, spokeswoman for the state budget office, said stronger revenues from income tax and the lottery produced a $259-million balance for the state general fund and a $94-million surplus in the School Aid Fund. Fewer welfare cases than expected and cost-saving measures also were factors, Fritz said.

The extra money will carry over into the fiscal year that began Oct. 1. It could be used to shore up the state rainy-day fund, or possibly to fund such unresolved budget items as keeping two State Police crime labs open or maintaining fish and wildlife operations.

And of course, this gives Matt Marsden a chance to be, well, let's say, disingenous about the situation.

"Our position all along was we didn't have to raise taxes to balance the budget," said Matt Marsden, spokesman for Senate Majority Leader Mike Bishop, R-Rochester.

In reality, the proposal that the Senate Republicans suggested for budget year '08 still would have left the need to raise $662 million in taxes- they just wanted the House to take responsibility for it. Then they went and glady spent that money, too, but Matt wouldn't want to let the facts get in the way of the good talking point. Not sure how $353 million would have filled that $1.35 billion hole- must be that Republican math at work again.

Gov. Jennifer Granholm and the Legislature raised taxes by $1.35 billion to help wipe out the state deficit this year. Some fiscal analysts project a shortfall of up to $500 million next year, mainly due to soaring health care and prison costs, while other predictions are far more optimistic.

If that prediction of $500 million comes true, this surplus is going to come in very handy.