New editions of the State Legislative Tracker and The Policy Tracker available now!

Difference between revisions of "Michigan state budget and finances"

From Ballotpedia
Jump to: navigation, search
(FY2012 state budget)
(FY2013 state budget)
Line 37: Line 37:
* $15.2 million for training of 107 troopers for the Michigan State Police;<ref name=fuel/>
* $15.2 million for training of 107 troopers for the Michigan State Police;<ref name=fuel/>
* $75 million deposit in the state’s Rainy Day Fund, bringing the total to $580 million.<ref name=fuel/>
* $75 million deposit in the state’s Rainy Day Fund, bringing the total to $580 million.<ref name=fuel/>
==FY2013 state budget==
[[Michigan]]'s legislature finished work on the FY2013 state budget on June 5, 2012, four months ahead of the constitutional deadline of October 2012, and the governor signed the bills into law on June 26, 2012.<ref name=outstanding/>
Lawmakers approved a $14.6 billion bill to fund public schools, community colleges and universities next year.<reF name=final>[ The Detroit News "Senate takes final votes on state budget, sends it to Snyder" June 6, 2012]</ref>  The education bill increased higher education funding by 3%, but did not make up for the 15% cuts instituted in FY2012.<ref name=final/>  The omnibus budget bill became Public Act 200 of 2012.<ref>[ Public Act 200 of 2012]</ref> The education budget became Public Act 201 of 2012.<ref>[ Public Act 201 of 2012]</ref>
Education and health and human services comprised 75% of state budget spending.<ref name=signs>[,4669,7-192-53480_56421-281316--,00.html "Snyder signs FY 13 budget bills" June 26, 2012]</ref>
Budget highlights included:<ref name=final/>
* Raising the minimum per pupil funding amount from $6,846 to $6,966, a $120 increase;<ref>[ "State budget increases spending" June 6, 2012]</ref>
* Increases for state police training;<ref name=final/>
* Increases in health care;<ref name=final/>
* Heat assistance for the poor;<ref name=final/>
* $130 million into the state's Rainy Day Fund; and<ref name=final/><ref>[ The News Star "Budget turnarounds: Some states socking cash away" Jun 23, 2012]</ref> bringing the account to $505 million, its largest balance in more than a decade.<ref name=outstanding/>
* 3% increase in funding for community colleges and universities with performance metrics that keep college tuition down.<ref name=signs/>
'''Education budget'''
The education budget for FY2013 raised the minimum per pupil funding amount from $6,846 to $6,966, a $120 increase.<ref>[ "State budget increases spending" June 6, 2012]</ref>
For higher education, universities saw a 3% increase in funding, but the budget required universities to limit tuition and fee increases to no more than 4%.  If schools exceeded that limit, they would lose part of their state funding. Increases included:<Ref name=daily>[ The Daily Press "Senate OKs state budget" June 6, 2012]</ref>
* $36 million increase for public universities, to a total of $1.4 billion in state funding;<Ref name=daily/>
* Community colleges took $10.3 million more, for a total of $294 million.<Ref name=daily/>
'''Legislative proposed budget'''
The state Senate and House of Representatives approved a $7.5 billion general fund budget, which covers 13 state agencies, on May 31, 2012.  The [[Michigan House of Representatives|House]] approved the budget by a vote of 61-49 and the [[Michigan State Senate|Senate]] voted 20-16.  The education budgets were separate from the general fund budget.<ref name=approve>[|topnews|text|FRONTPAGE The Detroit Free Press "State House, Senate approve general fund budget and send it to Snyder"  May 31, 2012]</ref>
Highlights of the legislative budget included:
* An additional $25 million  for film industry incentives, and the governor said he could agree to the increase;<ref name=approve/>
* $44 million more for The Michigan State Police, including $18 million for additional troopers and enhanced services in high-crime areas, such as Detroit, Pontiac, Saginaw and Flint;
* The Rainy Day Fund got a $140 million cash infusion, which could help the state boost its credit rating;
* $10.8 million in The Department of Corrections budget to restructure the prison system.<ref name=approve/>
Republicans, who controlled the Senate in 2012, planned to spend roughly $150 million less overall than what Governor Snyder proposed for FY2013 due to lower-than-anticipated tax revenue.<ref>[|newswell|text|FRONTPAGE|p The Lansing State Journal "Michigan lawmakers may seek scaled-back state budget" March 16, 2012]</ref>
'''Governor's proposed budget'''
Governor Snyder unveiled his $48.2 billion proposed budget for FY2013 on Feb. 9, 2012. Under the proposal, the state's general fund totaled $9.2 billion, while the school aid fund totaled $11.4 billion.  The proposed transportation budget totaled $3.3 billion.<ref name=more>[ The Detroit News "Snyder budget: more for education, public safety, cities" Feb. 9, 2012]</ref> The budget included a $457 million onetime surplus from 2011 and about $630 million in projected increased revenues for 2012 and 2013.  Snyder's plan socked away $130 million to boost Michigan’s Rainy Day Fund.<ref name=roads>[The Detroit Free Press "Rick Snyder proposes more funding for roads, police, schools" Feb. 9, 2012]</ref>
Education and health and human services accounted for 75% of the proposed budget.<ref>[ Press Release by Gov. Snyder "Governor’s proposed FY 2013 budget strategically invests in state’s future" Feb. 9, 2012]</ref>  It was also the first budget in more than a decade to increase funding for local governments, allocating an extra 2% for constitutional revenue sharing, plus additional money municipalities would compete for based on adopting "best practices."<ref>[ The Detroit Free Press "Moody's calls Snyder budget proposal, law changes 'key turning point' for Michigan" Feb. 17, 2012]</ref>
Highlights of the governor's proposed budget included:
* Offering $200 million to K-12 school districts that engage in best practices;<ref name=more/>
* Increasing funding to state universities by $36.2 million or 3%, with much of it tied to performance incentives and keeping tuition hikes to no more than 4%;<ref name=more/>
* $119 million from the general fund to repair roads and bridges;<ref name=roads/>
* $50 million in increased public safety funding, with a focus on [[Detroit, Michigan|Detroit]], [[Flint, Michigan|Flint]], [[Pontiac, Michigan|Pontiac]] and [[Saginaw, Michigan|Saginaw]];<ref name=more/>
* $209 million for thew newly created Michigan Office of Great Start, which focuses on early childhood education;<ref name=more/>
* $195 million to boost the state's economic development efforts, with a special emphasis on "economic gardening."<ref name=more/>
==Budget transparency==
==Budget transparency==

Revision as of 11:26, 23 April 2014

Michigan state budget

Flag of Michigan.png
Budget calendar:  Annual
Fiscal year:  2013
Date signed:  June 26, 2012
Other state budgets
AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming

Michigan's legislature completed work on the FY2013 state budget on June 5, 2012, four months before the start of the fiscal year. Lawmakers approved a roughly $49 billion state budget, including $14.6 billion bill to fund public schools, community colleges and universities and a $33.5 billion general fund budget, which covers 13 state agencies.[1] Governor Rick Snyder signed the budget bills into law on June 26, 2012.[2]

The state's fiscal year begins on October 1st and ends on September 30th of the following calendar year.[3] The state operates on an annual budget cycle.[4]

As of 2012, Michigan had a total state debt of approximately $124,496,677,000, when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans and the budget gap.[5] As of 2012, the total state debt was down from the prior year total of $125,329,485,000.[6]

As of 2012, Michigan's total state debt per capita was $12,605.74.[7]

FY2014 State Budget

Governor Snyder presented his proposed FY2014 state budget on Feb. 7, 2013. The $51 billion all-funds budget included a $9.3 billion general fund.[8]

Under the proposed budget, the state's fuel tax would increase from $0.19 per gallon for unleaded fuel and $0.15 per gallon for diesel fuel to $0.33 per gallon.[9] The proposed budget also called for increasing certain vehicle registration fees to raise $1.2 billion for the program to fix the state's roads and bridges that were in disrepair.[8]

The governor agreed to expand the state's Medicaid program under the Affordable Care Act to include about 470,000 more uninsured low-income people, and state officials said they expected $20 billion in federal funds to pay for the expansion.[8]

Other spending increases included in Snyder's proposed budget:

  • $8.6 million to create a new agency within the Department of Military and Veterans Affairs;[9]
  • 2% funding increases for K-12 schools, community colleges and universities, including $30.7 million more for public universities and community colleges and bringing the total state funding for K-12 education to $11.5 billion;[9][8]
  • $130 million over two years for early childhood education;[9]
  • $15.2 million for training of 107 troopers for the Michigan State Police;[9]
  • $75 million deposit in the state’s Rainy Day Fund, bringing the total to $580 million.[9]

Budget transparency

At present, no department of Michigan state government provides a comprehensive and searchable online checkbook register that gives a full and timely accounting for all expenditures. Spokespersons for the office of Michigan governor Jennifer Granholm had asserted that providing such a service for all of Michigan state government would cost in excess of $100 million, and was thus cost-prohibitive given the state's recurring inability to align desired spending with available revenue.[10]


  • State Rep. Tom McMillin, R-Rochester Hills, said he had pushed for Michigan to follow Missouri's lead and post more information online but was told that it would cost $100-150 million to put data on the Internet the way Missouri had done.[11] Gov. Snyder's spokeswoman said those estimates "seem to be somewhat off base."[11]
  • Proposal to open budget meetings: In January of 2010 State House and Senate members considered a proposal, which would open traditionally closed state budget meeting to the public. The reform was building off other proposals such as earlier deadlines for adopting a budget and docking lawmakers' pay for not adopting a budget in time.[12]
  • Michigan Department of State provides first online expenditure report:On April 23, 2008, Michigan Secretary of State Terri Lynn Land announced that the Michigan Department of State would begin posting quarterly expenditure reports.[13] These reports provide the names for most of the recipients of departmental funds, the general category for the expenditures and the total amount paid during the preceding quarter.[13] The MDOS made the decision to post this expenditure report after a request from the Mackinac Center for Public Policy's "Show Michigan the Money" transparency project.[14] The MDOS report was presently the only regular accounting of expenditures provided by any department of state government. The MDOS report did had limitations. It was provided as a searchable PDF document, but did not provide check numbers nor was it subdivided by date for individual transactions. The reports also did not provide the names, titles and salaries paid to departmental employees. (However, the names of employees and amounts paid to them for travel and other work-related reimbursements were included in the reports.)
  • Governor's response to lack of online "check register":Democratic Governor Jennifer Granholm had responded to calls to put the state "check register" online by asserting that current information systems could not provide this information, and making the capable of doing so would be too costly. An April 9, 2008 report by the Michigan Information News Service (MIRS, subscription required) reported that a letter to House leaders from state Department of Information Technology (DIT) director Ken Theis said that the state's financial accounting mainframe computer system acquired in the in 1980s would require "extensive" upgrades costing between $100 million and $150 million to produce the kind of searchable spending database that Missouri had created. The point of the Mackinac Center request referred to above was merely to ask state departments to replicate the Secretary of State standard, leaving them to decide whether or not they wished to exceed it. As reported on the Mackinac Center's "Show me the money" website, using the same mainframe computer system the Michigan Secretary of State department posts quarterly spending reports at an initial cost of $2,400, and $700 for each new quarterly report. If those figures were extended to the entire state government the initial cost to produce similar quarterly reports would be $516,000, and $129,000 per quarterly report, or 0.0012 percent and 0.00035 percent of the annual budget, respectively.[15] The reply to the Mackinac Center's request from the Office of the Governor also addressed employee salary information, stating that "this level of detail provides little value to the taxpayer."[16]
  • In February 2009, two freshmen Republican members of the Michigan House (Amash and McMillin) began posting detailed records of their own office spending, including itemized monthly expenditures by category, and the names and salaries of their legislative aides. The House Republican caucus had claimed that it was posting detailed spending data, but to date these two legislators were the only ones actually doing so.

Government tools

The following table was helpful in evaluating the level of transparency provided by a state spending and transparency database:

State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary
Michigan Transparency and Accountability N
600px-Red x.png
600px-Red x.png
600px-Red x.png
600px-Red x.png
See also: Evaluation of Michigan state website

Independent transparency sites

The Mackinac Center for Public Policy had a transparency website, "Show Michigan The Money"

The National Taxpayers Union produces an "" website, with weekly transparency e-updates. This was expected to include Michigan data at some point.

Multi-Measure Budget Transparency Profile

The Institute of Government and Public Affairs at the University of Illinois had created a multi-measure transparency profile for Michigan, which measures state transparency as of September 2011 using indicators from a range of organizations, including Sunshine Review. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.

U.S. PIRG "Following the Money" report

See also: "Following the Money" report, 2014

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[17] According to the report, Michigan received a grade of B and a numerical score of 86.5, indicating that Michigan was an "advancing" state in terms of transparency regarding state spending.[17]

Budget background

The Michigan Constitution requires the Governor to propose an Executive Budget for state activities on an annual basis. By law the Executive Budget must be submitted to the Legislature within thirty days after the Legislature convenes in regular session on the second Wednesday in January. However, when a newly elected Governor was inaugurated into office, sixty days were allowed to prepare the proposal. The Executive Budget was more than a statutory requirement. It represents a statement of priorities for the policy activities of state government. Therefore, a detailed budget preparation process was necessary to provide information that would help the Governor and the Legislature allocate state resources most effectively. The budget process can be broken down into four stages:[18]

According to the Michigan Constitution, no appropriation was a mandate to spend. The Governor, by Executive Order and with the approval of the appropriations committees, can reduce expenditures whenever it appears that actual revenues for a fiscal period would fall below the revenue estimates on which the appropriations for that period were based. By statute, any recommendation for the reduction of expenditures must be approved or disapproved by both of the Appropriations Committees within ten days after the recommendation was made. A reduction cannot be made without approval from both committees; not later than thirty days after a proposed order was disapproved, the Governor may submit alternative recommendations for expenditure reductions to the committees for their approval or disapproval.[19]

Budget figures

The following table shows total state spending in recent years.

Year Gross Appropriations Federal Revenue Difference – State Spending from State Sources
FY 2008-2009 $44,633,407,900 $14,917,594,200 $29,715,813,700[20] (Increased $108 million)
FY 2007-2008 $43,578,704,400 $13,970,996,300 $29,607,708,100[21] (Increased $402 million)
FY 2006-2007 $42,385,938,000 $13,180,056,000 $29,205,882,000[21] (Increased $1.079 billion)
FY 2005-2006 $40,904,128,000 $12,778,003,500 $28,126,124,500[21] (Increased $677 million)
FY 2004-2005 $39,923,663,500 $12,351,486,100 $27,448,662,539[21] (Decreased $247 million)
FY 2003-2004 $39,241,892,100 $11,546,223,200 $27,695,668,900[21]

General Fund[22]

Category FY2009 Amount in millions Actual FY 2010 Amount in millions Estimated
Beginning Balance 458 177
Revenues 7,161 6,891
Adjustments 1,014 1,075
Total Resources 8,633 8,143
Expenditures 8,456 8,108
Adjustments 0 0
Ending Balance 177 34
Budget Stabilization Fund 2 2

Accounting principles

See also: Michigan government accounting principles

The Michigan Auditor General had the responsibility, as stated in Article 4, Section 53 of the State Constitution, to conduct post financial and performance audits of State government operations. In addition, certain sections of the Michigan Compiled Laws contain specific audit requirements in conformance with the constitutional mandate. Thomas H. McTavish had served as Michigan Auditor General since 1989. Michigan's audit reports were published online.[23]

The Institute for Truth in Accounting (IFTA) rates Michigan “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider Michigan's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[24] Michigan's CAFRs were published online by the Office of Financial Management. Michael J. Moody was the Director Office of Financial Management. Bob Emerson was the Director of the Office of State Budget.[25][26]

Credit Rating Fitch Moody's S&P
Michigan AA- Aa3 AA-[27]

In July 2011, Fitch Ratings revised its outlook for Michigan bonds from "stable" to "positive," while leaving the state's overall rating at AA-.[28]


Michigan received $7.72 billion in federal stimulus funding between February 2009 and June 2013.[29]

Public Employees

See also: Michigan public employee salaries or Michigan public pensions

According to 2011 Census data, the state of Michigan employed a total of 573,465 people.[30] Of those employees, 381,549 were full-time employees receiving a net pay of $1.85 billion per month and 191,916 were part-time employees paid $217.2 million per month.[30]

See also

External links

Additional reading


  1. The Detroit News "Senate takes final votes on state budget, sends it to Snyder" June 6, 2012
  2. " "Gov. Rick Snyder signs 'outstanding' state budget, calls Detroit bridge provisions unenforceable" June 26, 2012
  3. State Budget Office
  4. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting" April 2011
  5. State Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012
  6. State Budget Solutions “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
  7. State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012
  8. 8.0 8.1 8.2 8.3 Reuters "Michigan gov. proposes expanded budget amid local, federal risks" Feb. 7, 2013
  9. 9.0 9.1 9.2 9.3 9.4 9.5 The Detroit Free Press "Gov. Snyder's budget calls for fuel tax, vehicle registration increases to fix roads" Feb. 7, 2013
  10. Mackinac Center for Public Policy, State Checkbook Still Missing from Internet, Oct 2008
  11. 11.0 11.1 The Detroit News "Michigan budget reports scrutinized" Dec. 27, 2010
  12. Lansing State Journal, Region's lawmakers want to open budget talks to public, January 6, 2010
  13. 13.0 13.1 Michigan Department of State, Land publishes FY07 spending, April 23, 2008
  14. Mackinac Center for Public Policy, Mackinac Center’s “Show Michigan the Money” Project Prompts Michigan Department of State to Post Unprecedented Detail in Department Spending, April 23, 2008
  15. Mackinac Center for Public Policy, "State Checkbook Still Missing from Internet," Oct. 6, 2008
  16. Mackinac Center for Public Policy, Governor response, July 17,2008
  17. 17.0 17.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  18. Michigan Office of the State Budget Web site, retrieved October 26, 2009
  19. Michigan Office of the State Budget Web site, retrieved October 26, 2009
  20. House Fiscal Agency, "Appropriations: Summary and Analysis, FY 2008-09," October, 2008
  21. 21.0 21.1 21.2 21.3 21.4 House Fiscal Agency, "Appropriations: Summary and Analysis, FY 2007-08," December, 2007
  22. National Governors Association and National Association of State Budget Officers Fiscal Survey of States June 2010
  23. Michigan Office of the Auditor General Web site, retrieved October 26, 2009
  24. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  25. Michigan Office of State Budget Web site, retrieved October 26, 2009
  26. CAFRs
  27. Pew Stateline Infographic on State Credit Ratings. Accessed September 26, 2013
  28. The Detroit Free Press Feb. 17, 2012
  29. Recovery, "Stimulus Spending by State." Accessed September 26, 2013
  30. 30.0 30.1 2011 Michigan Public Employment U.S. Census Data