A state panel meets Friday to determine how much money Governor Gretchen Whitmer and the Legislature will have to create the next state budget.
State Treasurer Rachael Eubanks and the directors of the House and Senate fiscal agencies will convene at the Capitol to hear presentations on the state’s economy, student counts, employment and taxes. They will use that to craft a number that all the participants will use in the budgeting process. That number will be updated at least one more time in May.
The conference helps streamline the budget process by avoiding arguments over how much revenue is available – fights that can be driven by political considerations.
“There is a propensity to over- or under-estimate revenues to meet political needs,” said Eric Lupher, president of the non-partisan Citizens Research Council of Michigan. “To remove that temptation, the Consensus Revenue Estimating Conference was established in 1991 to bring together the administration, House, and Senate, along with respected economists, to project economic performance and therefore the baseline tax revenues the state can expect as it begins the budget process.”
A common revenue number does not guarantee a budget will be finalized by the October 1 deadline. In 2009, the state slow-rolled into a partial government shutdown because Democratic Governor Jennifer Granholm, the House Democratic majority and the Senate Republican majority could not agree on a combination of spending priorities and budget cuts before the start of the state’s fiscal year.
That is unlikely in this budget cycle since Whitmer is a Democrat and the House and Senate are also controlled by Democrats. But partisan considerations will have to come into play since Democrats’ majorities are very slim. In fact, the House is currently evenly divided until special elections fill two vacancies.
Establishing revenue numbers is the first of three significant events that kick off the political year at the Michigan Capitol. Whitmer will deliver her State of the State address on January 24 to outline her priorities to the Legislature and the public. Shortly after that, Whitmer will formally present her new budget proposal to add details to her plans and how much they will cost.
The budget the governor signed last July totaled $81.7 billion.
