State Budget Director: MI Averts Another Recession - WLNS TV 6 Lansing - Jackson | Your Local News Leader

State Budget Director: MI Averts Another Recession

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The word from John Nixon, Snyder administration's budget director, is that Michigan has averted another recession. He's very upbeat about the deal made at the nation's capitol to avoid a massive tax increase on state residence.

 

If Congress and the president had not acted, half a trillion dollars would have sucked out of the nation's economy. Taxes on consumers would have skyrocketed and that would have been bad news for state coffers, as discretionary would go down. State tax collections would have gone down, too, leaving fewer dollars available to fund state services.

"If there is less money coming in, we'd have to scale things back," said Nixon. "There were a lot of economist saying we might slip into a recession and if we slipped into a recession, that would have a direct impact on our general funds and school aid fund that we use to fund state government."

Now, as the governor puts the finishing touches on his new state budget, the uncertainty has been replaced with economic stability.

"They created stability for Michigan families, for the state and for the nation. You look at the markets, they are responding well," said Nixon. "But given where they were and where they are today, fixing the tax side has helped our economy."

Congress still has to resolve pending spending cuts to federal programs, but Nixon believes the impact of that will not be as severe for the state as the tax increases they just avoided in Washington.

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