KALAMAZOO (WKZO) -- 457M More For '11, $416.3M More For '12, $216.3M For '13 -- 1:20 p.m.
Here's a pleasant change. Michigan has money in the bank, more money coming in and a little bit more expected next year.
Estimates released today at the Consensus Revenue Estimating Conference (CREC) helped nail down the state's surplus for Fiscal Year (FY) 2011 (which ended Sept. 30) at a combined $457 million. For the current FY '12, the state has a pad of $416.3 million.
And going forward into FY '13, Gov. Rick SNYDER will have $216.3 million more than expected when he proposes his spending plan Feb. 9.
The final numbers highlighted more than four hours of good news at the biannual CREC, where state economists displayed numerous charts that showed Michigan's economic woes bottomed out in 2009. Employment, tax revenue and other economic indicators are slowly creeping up, signaling that 10 years of state government cuts, cuts and more cuts may finally be over for foreseeable future.
Budget Director John NIXON said the surpluses would not take care of all of the state's spending problems after a decade of cuts, but that it is welcome news. Asked if the projected surpluses are because of the economy or Snyder's policies, Nixon said the two go hand-in-hand, but...
"The good news is that it doesn't matter," Nixon said. "The main thing is that we're growing. As the Governor has said, 'We're not taking not going to take credit or assign blame. We're just moving forward.'"
But Senate Appropriations Committee Chair Roger KAHN (R-Saginaw) warned that today's news from CREC is only "half of the story." The increases need to be balanced with spending pressures that will severely limit the amount of "free money" that will be available.
Medicaid and employee economics were two areas Nixon cited.
The reason? Revenue estimates are up because tax revenue is up. Tax revenue is up because the economy is up.
The state's big three taxes -- sales tax, income tax and business taxes -- are all up from a year ago. The business tax restructuring of last year will cause a one-year decreases in the SAF in '12 of about 3.8 to 5 percent, but money going into the K-12 schools is expected to grow between 2.3 and 3.0 percent in 2013 and 2014.
The state's economic new is strong. Buoyed by nine straight quarters of growth in gross domestic product (GDP), Michigan's employment was up to 3.93 million jobs as of Nov. 2011 compared to 3.831 million job in December 2009. Michigan's unemployment is down to 9.8 percent, according to numbers presented by Treasury economist Jay WORTLEY.
Instead of fewer jobs in Michigan, state economists are expecting steady jobs growths of 64,300 in 2011, 30,100 in '12, 29,000 in '13 and 46,500 in '14. The biggest jump is expected in private non-manufacturing jobs, which is expected to go up 103,800 jobs from 2011 to 2014. Government jobs are expected to sink by 25,800 jobs from 2011 to 2014, Wortley shared with the CREC principals.
Detroit home prices are up 2.5 percent in October 2011 after crashing 25.5 percent in March 2009. Vehicle sales, a large economic indicator for Michigan, was up to 12.7 million units in 2011 with a projected bump to 15.1 million units in 2013. The low-water mark was 10.4 million units in 2009.
The percentage of auto sales enjoyed by Michigan's "Big Three" auto markets appears to have stabilized at around the 45 percent mark after being in the 70-percent range in 1997.