New Deficit Projections

Michigan last week released revised revenue estimates for fiscal 2009 through Sept. 30 and the next fiscal year that project a $1.3 billion gap in the current fiscal year and a $1.7 billion one in the next.

The new projection came from Treasurer Robert J. Kleine, Senate Fiscal Agency director Gary S. Olson, and House Fiscal Agency director Mitchell E. Bean. They form the state’s revenue estimating conference, which is responsible for revenue forecasts. The state will use the new estimates to craft a fiscal 2010 budget.

Total general fund revenue for the current fiscal year is expected to be $7.435 billion, or $871 million below January estimates. Fiscal 2009 school fund revenues are now estimated to total $10.944 billion, about $425 million below the last estimate. Fiscal 2010 revenues are now expected to reach about $6.95 billion in the general fund, down $985 million over the last estimate. School funds are expected to fall by $733 million.

“Actual revenue collections are at their lowest levels since 1991,” Kleine said in a statement. “When adjusted for inflation, this is the most significant annual revenue decline in a half century and double the revenue loss Michigan experienced in the severe recession of 1981.”

In anticipation of the current year shortfall, Gov. Jennifer Granholm last week issued Executive Order 2009-22, which cut spending by about $350 million.

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