Thursday, March 12, 2009

Six O'Clock News - No Money Mo Problems Edition

Michigan revenues plummeted in a "breathtaking" drop for January and February - we are down about $200 million, and counting.

For the fiscal year, which began Oct. 1, revenue in the general fund is down $105 million and the school aid fund is off $95 million from the January estimates, upon which the state budget is based. The general fund is the state's discretionary checking account.

Income tax collections totaled a negative $45 million because refund payments to taxpayers outpaced income tax revenue -- the first time that happened in 16 years.

Sales tax collections were down 18 percent in February, "the steepest monthly decline during the past 25 years," the Senate Fiscal Agency report stated.

Not good. The stimulus and "more cuts" are the options being mentioned.

  • So, in the face of this news, what did the Senate do today? They cut more revenue! The bills mentioned here before went through, creating potentially another $500 million hole in the budget. They also denied foreclosure relief for Michigan citizens. Natch. Sorry folks, I know the car sales tax waiver and other measures may be "good policy", but to cut revenue in the face of the deficit we have is just plain irresponsible and shows that some people are more interested in playing politics than they are in being good fiscal stewards of the state. It just amazes the mind to think that you would then turn around and tell us that you need to be the ones who will provide oversight on the stimulus funds, because somehow the President and the Congress don't know what they are doing? Puh-leez.

  • Update on my earlier diary - VP Biden will be announcing tomorrow regulations on spending the stimulus. Don't mess with Joe. And Tim "Just in Time" Martin of the AP provides a bit more insight into how much will run through the legislature's hands...

    But the Legislature will have some control over the roughly $7 billion in stimulus money expected to flow through state government. Most of the money will have to be spent on specific programs, but lawmakers will limited flexibility to decide where it goes within those programs.

    No one has released the grand total that we will receive, but the Center for American Progress estimated that it would be $18 billion over two years, a figure that includes the tax cuts, which were already 42% of the stimulus. So, do the math. I can't because I went to the same school that Dick DeVos did.

  • One interesting proposal coming out of the Legislature and the DNR - adding $10 to vehicle registration fees and drop the daily passes for state parks. Sounds great in theory, and certainly would streamline government. Citizens would be allowed to waive the $10 charge - and then would be on the honor system after that when it comes to park use. A similar program in Montana found that 70-75 percent opted to pay the fee - so let's give it a go here and see what happens. Being able to drive in with just a MI plate would be very nice.

  • GM says "no thanks" on the $2 billion that was coming for March. Cost cutting measures are taking hold.

  • Michigan will be receiving $325 million from the stimulus to work on weatherization and energy efficiency programs. $243 million will go to weatherizing homes, another $82 million will go to the State Energy Program for various uses concerning renewable energy and energy efficiency needs.

  • West Michigan is geeked about expanding movie production over here - the Muskegon Chronicle has an extensive piece on film efforts on the west coast. The Chronicle also documents the study done by MSU that shows that film production helps stop the "brain drain" of younger people leaving the state, will provide positive impacts to tourism, and is creating high-paying jobs.

    The report issued by Michigan State University's Center for Economic Analysis last month found evidence that the industry is positively influencing migration to Michigan.

    "The motion picture and digital media sectors are high-tech sectors that require a high-skilled labor force," the report states. "These positions, whether they are on the set during filming, in the studios for post-production, or supplying services for productions, provide high-paying opportunities for Michigan workers."

    Back to you, Nancy.