It’s revenue projection time again for the state, a time when the House Fiscal Agency and the Senate Fiscal Agency — both ostensibly non-partisan advisory offices — attempt to predict the amount of money the state will take in over the next year in taxes and fees. And while neither of the conflicting predictions of the two agencies is particularly good news, the House version is considerably better than the Senate’s. The Detroit News reports:
The [House Fiscal] agency, which released the projections in advance of Monday’s state revenue estimating conference in Lansing, predicts the state’s general fund will increase by about $44 million over the current fiscal year, an increase of 0.6 percent, while school aid will decline by about $58 million, or 0.6 percent.
Those predictions are the opposite of figures released Dec. 22 by the Senate Fiscal Agency, which foresees a drop of $162.7 million in the general fund and an increase of $58.8 million in the school aid fund.
The House estimates net revenue in the general fund, the state’s main checking account, and the School Aid Fund, totaled $18.3 billion in the fiscal year that ended Oct. 1 — a drop of $2.6 billion or 12.3 percent from the previous year. Revenue is forecast to decrease $964.7 million, or 5.3 percent, in fiscal year 2009-10, and revenue in fiscal year 2010-11 will decline $13.4 million, or 0.1 percent.
In 2009, the General Fund declined by 20 percent and the School Aid Fund declined by 5 percent, so any increase in either fund would be relatively better. But with state revenues now roughly equal to the level they were at ten years ago, merely holding steady is not enough.
We’ve cut billions from the state budget over the last few years, much of it coming from Medicaid and other social services at a time when demand for such services is at an all time high and even more coming out of school funding. And with the 2011 budget projected to have a deficit of $1.8 billion, a few tens of millions here or there only scratches the surface of the problem.
Our legislative leaders must set the state government on a firm financial footing, which requires serious structural tax reform. The only thing standing in the way of that reform is Mike Bishop and the Senate Republicans.