Lansing, Mich. (WLNS) — The current pandemic has created countless challenges, but one of the biggest impacts has been on the state’s economy. New numbers released Monday showed that revenue losses aren’t as significant as expected, but the state will still take a big hit.
A special Consensus Revenue Estimating Conference (CREC) was held Monday to evaluate Michigan’s economic recovery.
Between January and May, tax revenue fell by more than $3 billion. The good news is that projected losses are less than anticipated, but the state is still down nearly $1 billion in overall losses from January’s forecast.
“The news is better than it could have been, but still definitely not good news right now,” Alex Rossman, Spokesperson for the Michigan League for Public Policy said. “We’re most immediately concerned with the 2021 budget because that does have to be passed by the end of September, but we’re looking at a budget deficit several years down the road.”
Rossman said federal aid packages like emergency unemployment and stimulus checks brought a lot of revenue into the state, but added, that revenue is only temporary. That’s why the MLPP is urging lawmakers to continue advocating for more federal relief.
“In addition to federal programs like emergency unemployment and food assistance, we also need just flexibility and additional funds to address our state budget otherwise we are going to have to endure some severe cuts,” Rossman said.
In a statement, Sen. Curtis Hertel, Jr. (D- 23rd District) wrote:
“We have seen the impacts of COVID-19 in every aspect of our lives over the past six months. While challenges still exist and we have a long road ahead, the economic numbers announced today are proof that our science-based strategy is working. By prioritizing the health and safety of our residents first, Michigan — led by Gov. Whitmer — has become the only state to show a growth in consumer spending over last year, and our recovery is among the top 10 in the nation. By managing this virus and saving lives, we can now build back faster than states that did not take the same precautions.”
Sen. Jim Stamas (R- 36th District) also responded to the economic outlooks, writing in part:
“Short-term gains do not equal long-term budget stability. The Trump Administration, through many of its policies, has greatly helped Michigan’s families and our state, but we cannot know for certain the impact of the pandemic months or years from now. As it stands, we still forecast a hole in the 2022 fiscal year — a reminder that we have a duty to be restrained and responsible with our spending.”
State Budget Director Chris Kolb also called on the federal government for more support.
“An additional federal stimulus package is a must to help our residents and businesses and to provide crucial support to state and local governments,” Kolb said. “While today’s updated revenue picture is better than the forecast in May, it’s still far worse than the January forecast and we are still looking at dramatic revenue losses in fiscal years 2021 and 2022, totaling nearly $4.2 billion.”