Consensus estimates show state still needs to tackle broader revenue problem

consensus-estimates-show-state-still-needs-to-tackle-broader-revenue-problem

For Immediate Release
Jan. 15, 2021

Contact:
Alex Rossman
arossman@mlpp.org
517-775-9053 

LANSINGThe Michigan League for Public Policy issued the following statement on today’s Consensus Revenue Estimating Conference. It can be attributed to League President and CEO Gilda Z. Jacobs. 

State revenues, like everything else in state government and our daily lives, have been adversely affected by the COVID-19 pandemic and the subsequent and directly related economic strain. But while the state’s current revenue outlook is not as bad as it could be, our revenue situation also is not as good as it should be. Many people in Michigan were struggling before COVID-19, and these are the same residents who are being hurt the most by the pandemic personally and financially. Regardless of today’s ‘consensus,’ with the cost of living and inflation taken into consideration, we know that state revenues are still woefully behind.

“In actual spending, state General Fund revenues have been flat for 20 years. And when adjusted for inflation, Michigan’s General Fund spending is lower than it was in 1968, when a car cost around $3,000, a four-year college education—tuition and room and board—cost about $6,000 total, and the median price of a house was $20,000.

“At the same time, Michigan has systematically disinvested in, and at times slashed funding for, the services our residents truly rely on, and many areas of our state budget have still not recovered. These cuts were caused by the national Great Recession and Michigan’s particularly dire economic downturn that preceded and followed it, but the massive state tax shift from businesses to individuals in 2011 also decimated state revenues and services. Essentially, the state has underinvested in nearly everything that workers, families and business value—education at all levels, human services, public health and more. These fiscal and policy decisions have adversely hurt residents with lower incomes and Michiganders of color, creating disparities that have only increased due to the COVID crisis.

“Better investment in education, assistance programs, and public health is desperately needed to  help the Michiganders who are being hit the hardest by COVID-19. To invest in the state’s most pressing needs and ensure full and equitable economic recovery and future growth, the state will require more federal relief funding—including flexible money for state and local governments, reinvigorated discussions and actions around establishing new revenue streams, and continued commitment to invest in proven and equitable programs and services to support all residents and all communities.”

BACKGROUND:
The January Consensus Revenue Estimating Conference officially kicks off the 2021-2022 state budget process, and today’s numbers will inform Gov. Gretchen Whitmer’s budget proposal that is expected next month. The state budget is always a big area of advocacy for the Michigan League for Public Policy, the League’s 2022 state budget priorities can be found here.  

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The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.

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