Treasury projections better than House, Senate

The third party in the May revenue projection business has been heard from. The Michigan Department of Treasury has released its estimates of revenue for the rest of this fiscal year and the next one and those projections are considerably better than those issued by the House and Senate Fiscal Agencies. The Detroit News reports:

Treasury says receipts for the general fund, the state’s main checking account, are down by $153 million and school aid revenue is up $306 million compared to January estimates.

The House Fiscal Agency had projected a drop in general fund revenue of $248 million and an increase in school aid of $232 million; and the Senate Fiscal Agency estimated a $502 million fall-off in general fund collections and a $255 million boost in the school aid pot.

Now the three groups will sit down this afternoon and come up with a consensus revenue prediction, which the legislature then uses to decide how to balance the budget for the rest of the year as required by the state constitution. The consensus will probably come in fairly near the House Fiscal Agency results, which means the most obvious option will be to use the surplus from the School Aid Fund to make up the deficit in the General Fund. If they do that, there will be little need for middle of the year cuts as we’ve had to make the past few years.

And with the passage of the school retirement reform package and increased estimates of revenue for FY 2011, which begins in October, the legislature might — and that is the operative word at this point — only have to make up a deficit in the $600 million range for next year, which is far less than the $1.8 billion deficit projected in January. Michigan’s budget crisis just might — there’s that word again — be starting to ease a bit.