They gathered in Lansing again today to put their collective heads together in an updated Consensus Revenue Estimating Conference in an attempt to plot the financial health going forward in the state of Michigan.
Essentially, the Whitmer Administration and the State Fiscal Agencies arrived at the consensus that while revenue projections are less negative than they were in the forecast back in May, largely thanks to the federal stimulus program, the numbers are still down from January.
State Treasurer Rachael Eubanks, State Budget Director Chris Kolb, Senate Fiscal Agency Director Chris Harkins and House Fiscal Agency Director Mary Ann Cleary today reached consensus on revised economic and revenue figures for the remainder of Fiscal Year (FY) 2020 and for the upcoming 2021 and 2022 fiscal years. Below are their estimates delivered at today’s conference at the State Capitol:
Overall Revenue Forecast (General Fund and School Aid Fund Combined)
| January | May | Change from January to May | August | Change from January to August | |
| FY 2020 | $24.94 billion | $21.70 billion | -$3.23 billion | $24.01 billion | -$926 million |
| FY 2021 | $25.51 billion | $22.46 billion | -$3.05 billion | $23.04 billion | -$2.47 billion |
| FY 2022 | $26.16 billion | $24.07 billion | -$2.09 billion | $24.45 billion | -$1.71 billion |
State Treasurer Rachael Eubanks says, “The good news is that the decline in revenues have not been as severe as we forecasted in May in the early days of the pandemic; however, we are still down nearly $1 billion overall from January’s forecast.” Eubanks adds, “Federal stimulus programs played a critical role in indirectly supporting state revenues, albeit still quite a bit less than we would have likely generated had it not been for the pandemic. As we move forward, we have not assumed additional federal assistance will be available due to the delay in its enactment, which is the main driver for the precipitous drop in revenues for fiscal year 2021.”
These revenue estimates are based on the most recent economic projections and forecasting models. As with any economic and revenue forecasts, there are potential risks to the estimates agreed to today, including further COVID-19 outbreaks, national economic trends, and international economic issues.
State Budget Director Chris Kolb says, “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.” Kolb argues, “We need additional federal aid to help us manage through the devastating impact COVID-19 has had on our revenues or else we will be facing tough decisions about what essential services and programs to cut. An additional federal stimulus package is a must to help our residents and businesses and to provide crucial support to state and local governments.”
The August Consensus Revenue Estimating Conference’s detailed forecast – as well as presentations from today’s session – can be found on the Senate Fiscal Agency’s website by clicking this link: August2020RevenueEstimatingDocumentMI
In the wake of today’s conference, Amber Arellana who serves as Executive Director of The Education Trust-Midwest issued a statement in response to the findings. Here is what she had to say:
“State budget projections today reinforced what our leaders expected: that the COVID-19 pandemic has caused Michigan’s main sources of school funding to plunge.
“While the declining revenue will necessitate hard fiscal decisions, one thing is certain: we cannot let the academic success and opportunity to learn of all of Michigan’s children to similarly plunge. We are calling on Congress and Michigan legislators to invest in the future of our children by prioritizing and protecting education funding, first and foremost. At the federal level, this includes the swift passage of a federal stimulus package to fully support state education budgets. At the state level, it includes state policymakers using general state budget funds to further support public education at this critical time of need for public schools.
“Even before the widespread economic impact of the COVID-19 pandemic, Michigan was among America’s most inequitable and unfair states for school funding. This has contributed to devastating opportunity and achievement gaps for our state’s most vulnerable children.
“We cannot afford to continue down this troubling path.
“If cuts to the education budget cannot be avoided, Michigan legislators should shield our most vulnerable students and under-resourced districts from the worst of budget cuts, especially low-income children, English learners and students with disabilities. Those children have already been disproportionately impacted by the pandemic.
“Appropriate funding alone is not enough. Meeting the learning needs of every student can only be done by effective, well-supported classroom educators and the implementation of best practices. Greater transparency for how dollars are spent and accountability to ensure that funds earmarked for vulnerable students reach their classrooms are critical for informing future decision-making at the school, district and state level.
“The time is now to ensure all Michigan’s students have an opportunity to succeed.”
