With the new session still in its infancy, the Legislature has not been able
to get up to working at full speed yet. They awaited two crucial pieces of
information: one, how much money they would have to budget with, and secondly
the agenda and direction the Governor wanted to go in, Over the past week the
Legislature received that information, let’s review:
Consensus Revenue Estimating Conference
Before the start of the new legislative session the House and Senate Fiscal
Agencies along with the State Treasurer came together to discuss the estimated
revenue that the state would have in the coming fiscal year at the Consensus
Revenue Estimating Conference. This conference meets twice a year, in January
and in May. The conference heard from both of the fiscal agencies along with
the Department of Treasury. The University of Michigan was also invited to
provide an economic outlook for the state in the coming years ahead. Let’s
break down the numbers:
Unemployment:
The outlook for Michigan unemployment picture is slowly brightening up. With
a current rate for 2012 at 8.9%, economists forecast that the overall rate for
the coming year will drop a point to 8.8%; drop to 8.2% in 2014 and 7.6% in
2015.
Personal Income:
With the drop in unemployment forecasted and second positive is the forecast
of increasing personal income for those working. For 2013 it has been
forecasted to increase 2.6% with a 4.3% increase in 2014 from 2013 and 4.4%
increase in 2015. A direction the Governor has been advocating for since his
election two years ago.
State Budget:
What does that mean for Michigan? One could extrapolate that with the
increase in income over the coming year that revenues for the State will be
increasing. With FY 2013 though, that isn't the case. The General Fund General
Purpose monies, that fund programs like Medicaid, will actually see a decrease
from FY 2012 of $472.9 Million or a change of 5.1%. The School Aid fund is
expected to add an additional $249 Million than what was estimated May 2012. We
could see some cuts coming in programs in Michigan for FY 13 but expected an
increase in revenue of $472.2 Million for FY 14. Now the Governor will present
his budget proposal to the Legislature on February 7th, so we wait and see how
programs will be affected.
State of the State Address
The Governor's State of the State address was just like the other he has
delivered, using an outline to rather than providing an actual written speech
when he delivered it. The Governor started by providing a review of where the
State was with his dashboards that he has made famous over his term has
Governor. The dashboard can be view by clicking the link above. The Governor
reported that with the changes that Michigan has seen over the past two years,
the economy in Michigan was growing and Michigan was putting people back to
work.
The road ahead for the Governor looks to continue the same success that has
had over the past two years. There were three major messages that Governor
Snyder conveyed to the lawmakers this past Wednesday night: one an increase in
funding for roads is needed and needed now. The Governor is looking to raise
1.2 Billion each year for 10 years to cover the costs of repairing Michigan's
crumbling roads. This was met with hesitation by many from his own party since
the plan included a large fee increase to automobile registration. Time will
tell on whether this proposal will make it out of the legislature or not.
The second major proposal was educational and the increase efforts to pass
an Education Achievement Authority. Fifteen schools in the Detroit area are
already operating under the premise of an Authority that provides a different
look at education than what is considered typical in Michigan. Students are
taught to master skills without the fear of receiving failing grades and
worried about whether or not they will make it to the next grade. The Governor
would like to have the opportunity to bring this proposal state wide to all of
the schools that are struggling in Michigan.
Finally, the third biggest topic was insurance reform. The Governor vetoed
the last efforts by the legislature to reform Blue Cross Blue Shield due to the
abortion amendments that were tacked on by the House in the final days of the
last session. The Governor now asked the legislature to go back to the drawing
board and bring legislation forward that would move the Blues in a world that
had a health insurance marketplace. Auto no fault insurance was the other
insurance reform topic of his speech. He wants reforms done this year to
provide protection to the insurance companies on their liability and legacy
costs for those involved in an auto accident. It is inevitable that this will
be on the agenda of this legislature.
To get more details on the Governor's State of the State address click here.
Stay with MSMS to receive all of the up to date information at http://www.msms.org/advocacy.
