Michigan’s $6.2B coronavirus budget gap ‘as bad or worse’ than Great Recession

Senate Appropriations Chairman Jim Stamas of Midland and House Appropriations Chairman Shane Hernandez are calling on Gov. Gretchen Whitmer to release a new 2021 budget proposal and sit down with Republican legislators to “begin state spending reductions immediately” for this fiscal year.  (Bridge file photo by Dale Young)

LANSING — Michigan lawmakers need to dramatically slash spending, raise taxes or hope for a federal bailout to offset a projected $3.2 billion shortfall and balance next year’s budget despite what could be another $3 billion loss because of the coronavirus pandemic.

That’s the word from state budget officials, who on Friday warned that tax collections not only are plummeting amid the coronavirus pandemic, but welfare spending will significantly increase as more residents lose their jobs.

“To say the numbers we just saw are sobering would be an understatement,” Michigan Budget Director Chris Kolb said Friday after a bi-annual consensus revenue estimating conference, where officials lowered projected tax collections by $6.2 billion over the next 18 months, more than wiping out what little growth they had previously expected. 

“There’s no playbook that’s on the shelf to truly address a loss of revenue of this size this quickly. This is potentially as bad, if not worse than, the Great Recession.”

The state may not be able to delay tough budget decisions for long.

In the current fiscal year, which runs through August, Michigan is expected to lose $1.9 billion in expected revenue from what would have been an $11 billion general fund and $1.2 billion from what would have been a $13.9 billion school aid fund.

Michigan’s current-year budget was built on an assumption that a combined $24.9 billion in revenue would flow into those funds by October, but officials now expect closer to $21.7 billion. 

That 13 percent reduction is twice the size of the state’s largest one-time revenue loss during the Great Recession in 2009. 

Officials have roughly $700 million in unspent money they can allocate and will also consider tapping what is now a $1.2 billion “rainy day” fund designed for use in fiscal emergencies. 

Even then, the state is expected to face a significant budget hole this year, along with $3 billion less than expected to build a 2021 budget that must be balanced by October 1, as required by the Michigan Constitution. 

As a point of reference, Kolb said that eliminating 12 of the state’s smaller departments — including the entire budget for the Legislature and the judiciary — would save the state less than $2 billion. 

Republicans who control the Legislature urged Gov. Gretchen Whitmer, a Democrat, to release a new 2021 budget proposal and begin negotiations on current-year cuts.

“We have a massive revenue shortfall brought on by this economic shutdown that will affect our families, schools, local governments and vulnerable citizens,” said Rep. Shane Hernandez, R-Port Huron, chair of the House Appropriations Committee.

“The people need to hear from the governor what her priorities are that reflect this new reality facing our state. Time is of the essence and we look forward to resolving this challenge.”

Sen. Wayne Schmidt, a Traverse City Republican who chairs the K-12 school budget committee, has warned that state revenue losses could force up to a 25 recent funding cut for Michigan schools next fiscal year.

But revenue projections announced Friday put the possible cut at closer to $650 per-pupil this year. The average district in Michigan receives about $8,000 per student.

Whitmer has made clear that public education will remain one of her top priorities, but Kolb stopped short of promising to spare K-12 schools from cuts. 

“We’re going to work to really protect the priorities of health, education, and public safety here in Michigan,” Kolb said. “There will be hard decisions to make, but we’re going to take the harshness of those hard decisions off.”

Speaking to reporters at a separate press conference Friday, Whitmer said that she is "not going to go into what all the possibilities are" for what cuts are possible. But she added that states nationwide face similar "grim" budget shortfalls and urged Congress to provide help.

A plea to Congress

The federal government has provided Michigan with roughly $3 billion to spend on the coronavirus response, but the relief package approved by Congress does not allow the state to use that money to backfill related budget gaps. 

Nationally, state and local government leaders are calling on Congress to approve more funding or at least provide more flexibility to use the previously allocated money. 

The state has only limited authority to borrow money without voter approval, said Treasurer Rachel Eubanks. 

“The existing tools the state has for bonding are not useful in this crisis,” she said. 

Some numbers to illustrate the crisis:

  • Collections from Michigan’s 6 percent sales tax are projected to fall from $8.25 billion in 2019 to $7.5 billion this year and $7.9 billion in 2021. 
  • Business taxes are projected to drop from $770 million in 2019 to roughly $300 million in both 2020 and 2021.
  • Collections from the state’s 4.25 percent income tax are expected to fall from $10.43 billion last year to less than $9.4 billion this fiscal year and $9.5 billion in 2021. Those would be the smallest collections since 2014.
  • Michigan’s gross domestic product, a measurement of the total value of goods and services provided in the state, is projected to drop by between 24.5 percent and 32.8 percent in the second quarter of 2020 before rebounding in the latter half of the year, according to state officials. That would be a larger quarterly drop than in any of the state’s last five recessions, including the 8.4 percent quarterly reduction recorded in the fourth quarter of 2008. 

“We hear all the time that this is unprecedented and uncharted territory,” said Jim Stansell, chief economist for the House Fiscal Agency. “It’s absolutely true.”

At the same time, state officials predict major jumps in welfare and Medicaid health insurance programs because of the economic recession. 

The Senate Fiscal Agency predicts 7,000 new families will qualify for cash assistance this year, and then another 13,000 in 2021. 

The agency projects some 600,000 new Medicaid enrollees over the next two years, moving the state towards 2.85 million participants by the end of 2021, which would “definitely be record numbers,” said fiscal analyst Steven Angelotti.

Michigan will save an estimated $138 million on public assistance programs this year because the federal government temporarily increased its Medicaid match rate, but state costs are expected to climb by $569 million in 2021 and $302 million in 2022.

Massive unemployment, quick rebound

The budget projections come as Republicans lawmakers urge Whitmer to accelerate her business reopening plan amid the ongoing but slowing pandemic, which had killed 4,825 residents as of Friday. 

More than 1.7 million Michiganders have filed for unemployment insurance benefits since mid-March, and roughly 1.4 million have qualified.

Critics contend Whitmer has exacerbated Michigan’s economic downturn by maintaining a stricter stay-at-home order than most states, but national restaurant booking and consumer spending data show rebounds are not happening at a dramatically faster rate in states like Georgia and South Carolina that were quicker to reopen, according to University of Michigan economist Gabriel Ehrlich.

That suggests health-driven decisions by private residents and business owners — not just government mandates — fuel the downturn, he told officials during the consensus revenue estimating conference. 

“The substantial majority is coming from private changes in behavior that would be going on even without the government restrictions,” Ehrlich said. 

While states across the country are beginning to relax regulations, “service industries with high perceived threats of infection will not rebound until customers feel safe,” said Daniil Manaenkov, another U-M economist. 

Spending at sit-down restaurants, air travel, public transportation and sporting events may not “go back to normal anytime soon,” he said. 

The U-M economists project Michigan will hit a peak unemployment rate of 22 percent this quarter. That would top the highest level during the Great Recession and exceed the projected national rate of 17.4 percent, reflecting the state’s economic reliance on the auto industry and its relatively high COVID-19 case count. 

But the economists expect a fairly fast recovery because most layoffs caused by the pandemic appear temporary in nature. 

U-M projects 650,000 job recoveries in the second half of 2020 and 236,000 in 2021.

Ehrlich said those projections are built on “optimistic assumptions” that Michigan will not see a major second wave of COVID-19 and the federal government will provide state and local government with a collective $600 billion in aid over the next two years.

If that happens, the U-M economists predict nine out of every ten Michigan residents who lost their job during the pandemic will likely be employed again by the end of 2022. 

A recent Michigan survey showed 1 in 7 small businesses do not think they will survive the shutdown, and about 4.9 percent of Michigan workers are employed by those firms, they said.  

Despite mass layoffs, U-M economists estimate personal incomes will remain relatively stable because of temporary boosts in unemployment insurance benefits, including a $600 per week stipend authorized by the federal government, and other assistance programs. 

If everyone who should be able to qualify does, Michigan residents could still collectively earn about 99 percent of their base earnings from 2019.

Still, reduced consumer confidence and business closures is expected to drive down light vehicle sales this year. Automakers sold 16.9 million light vehicle sales in the United States in 2019 but are only expected to sell 13.3 million this year, 15.2 million in 2021 and 15.8 million in 2022, according to U-M projections. 

Whitmer allowed manufacturers to return to work this week, and Detroit automakers will resume production at most facilities Monday. But suppliers that operate with “very thin margins” could still see a “drain on cash” if they reopen with only one worker shift and still face the threat of insolvency, said Kristin Dziczek of the Center for Automotive Research in Ann Arbor. 

She predicted Detroit automakers will produce 2.3 million fewer light vehicles this year than they did in 2019. 

“We’re very concerned about the health of this industry and the continued ability of suppliers in particular to have financial support until they get back up to full production,” Dziczek said. “We’re going to be in a period of distress for a few years.”

— Reporter Riley Beggin contributed

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Comments

Diana
Fri, 05/15/2020 - 4:57pm

Let's face it. We are all going to have to learn to live on less. Our governor and politicans are totally unprepared. Sonce the common man/woman has no salary because they lost their job than so too the governor and all elected officials lose their salaries and get on unemployment. There should not be a guarantee of GA just because you are an elected official you should have a guaranteed income.

Anonymous
Sat, 05/16/2020 - 8:27am

Diana, you are absolutely right.

yang gang
Sat, 05/16/2020 - 5:30pm

Actually EVERYONE should have a guaranteed basic income and people who work should be paid much more than that. Works great in Alaska.

Nope
Fri, 06/05/2020 - 9:44am

There is no guaranteed basic income in Alaska. There is the Alaska Permanent Fund that pays residents a small dividend annually based upon oil revenue.
Guaranteed basic income is a ridiculous idea. Giving people taxpayer money to not work is obscene. If you pay people not to work they will stY home and be lazy leaches their entire lives. How about we quit thinking of taxpayers as Santa Clause and make people support themselves!

Gazelda
Sat, 05/16/2020 - 11:32pm

I thought I'd be the only one saying that the Governor and our elected officials shouldn't be paid or at least take a large pay cut. I would have liked to see her lead by example and not need to be told, but.....

Anonymous
Sun, 05/17/2020 - 3:47pm

No, there are three of you, Gazelda.

pierredeboe
Tue, 05/19/2020 - 10:20am

I'm thinking every governor is working harder than any other time in history. As they attempt to lead with no hint of past experience in planet contagion, I think governors are earning every dollar of the salary. No one could have predicted this. We are all subjects of the same experiment, like it or not. 50 governors going in 50 different directions. With the leadership vacuum in D.C. compounding the problem this does not seem to have positive out coming in the next few months.

Real American
Fri, 05/15/2020 - 5:29pm

Moscow Mitch wants us to file bankruptcy so he can control us the way Snyder controlled Flint. Remember how we bailed out Europe after WW2, how we bailed out Iraq? What exactly does it mean when someone runs on the campaign promise to put "America First"? What about the promises to fix our infrastructure? It looks like we desperately need a Marshall Plan for AMERICA and with all the free money going to the wealthy with no strings attached, we need promises from them to rebuild AMERICA. We need Trump to put AMERICA FIRST.

Anonymous
Sat, 05/16/2020 - 12:21am

Walk me through this one again. So the conspiracy theory goes all the way back to WWII and involves a puppy you lost?

To Dolts
Sat, 05/16/2020 - 8:25am

Anonymous, you seem dense. We need a Marshall Plan for America. Got it?

Anonymous
Sat, 05/16/2020 - 2:21pm

I think you mean the Manhattan Project, not the Marshall Plan. And Trump already has announced a Manhattan Project for getting a vaccine, so we don't need it to be pronounced any more. So... great comment.

Wondering
Sat, 05/16/2020 - 5:32pm

Anonymous, Is English not your first language? We need a Marshall Plan for America. Do you remember the Marshall Plan or have you ever studied history?

Anonymous
Sun, 05/17/2020 - 9:41pm

So you're saying we need a plan (for America) where the government spends lots of money to get us to buy American products and creates goodwill so we aren't tempted by the Soviet Union? If that's what you're saying, then it's a ridiculous statement that has only a slight connection to what we are discussing on here. I don't think anyone of any party is calling on a 'Marshall Plan for America'- maybe the closest are the 'Buy American' stuff that Trump puts out, but that's not really what the Marshall Plan truly was about. No, I think the person above meant that we need a huge investment in finding a cure or a vaccine, which would be a Manhattan Project for America- that makes more sense.

Anonymous
Mon, 05/18/2020 - 1:08pm

You were doing so well until you got stuck on the Soviet Union, Psst, it's gone. We need to have our needs for survival made here in the USA instead of China, you know PPE, medical supplies, medicines, military essentials, etc. As for your last sentence, it sounds like you are mentally ill.

Anonymous
Mon, 05/18/2020 - 5:26pm

Darn... arguing with an idiot only makes two... why did I get sucked in to it...

lene3168
Sun, 05/17/2020 - 5:30pm

How rich. All democrats do not care about the American people. They are Globalist and want power. Our President has been putting America first, if you are not aware of that perhaps you need to get a different "news" media to follow.

Triumphant Trump
Mon, 05/18/2020 - 1:10pm

Trump put us first in the most dead from COVID19, over 90,000 and climbing, though under-reported.

Revere
Fri, 05/15/2020 - 5:41pm

Raise taxes?
And how exactly would we pay for that? With stimulus checks?
The answer is clear - Cut the taxes - Cut the spending - Do not shed a tear for a single cut. We do not need the state to survive - We need each other!!!

Anonymous
Sat, 05/16/2020 - 8:35am

Most Americans know it's unsafe to completely open the economy and schools. So we need to increase spending by consumers if we want to keep the economy strong. We need guaranteed income for all. We need to adapt to changes going forward, more online classes, smaller traditional classes in larger rooms, more teachers to accommodate more sections and provide some personalized instruction. We can't just open the economy and do business as usual. I know "Shut up, you communist, go to China." Right?

Kevin Grand
Fri, 05/15/2020 - 6:08pm

Gov. Karen couldn't get a 45 cent/gal. gas tax hike. Even her own party balked at a tax hike.

With the significant damage her ill conceived scheme to lock up Michigan has caused, along with Congress' resistance to bailing out individual states debt, she better get used to the idea of slashing entitlements.

She'll have NO other options.

GOP sucks
Sat, 05/16/2020 - 8:44am

So now that gas is $1.69 a gallon, we see how smart it would have been to pay an extra 45 cents a gallon, to fix the damn roads, increase safe lucrative construction jobs, and take advantage of less traffic right now. The GOP sucks, BUTT, it's not too late to implement these highly productive measures and turn this negative situation into a positive where we come out better in the end. We could issue bonds to fund a NEW GREEN DEAL.

Avenged
Sat, 05/16/2020 - 12:10pm

Yes that gas tax would be great right now with 3/4 of the state not driving because of the stay at home orders and people losing their jobs.. yes there is less traffic on the roads for construction but that also translates to less people filling up at the pump to pay that tax= no tax revenue

Think
Sat, 05/16/2020 - 12:48pm

People working should be paid more and drivers can afford the gas tax easily now. We need to hire well paid people to fix our infrastructure. Those people could include everyone willing to work, like unemployed restaurant servers. The people fixing the infrastructure will buy more take out food and other things. We have to increase the tax base with a tax on gas while the gas is cheap. For those who can't work yet, we need to pay them a basic income. All insurance companies need to refund money to drivers who are not driving.

Anonymous
Sat, 05/16/2020 - 2:23pm

That data and logic is sexist and racist. If the Governor told people to drive around in circles more and they did it, then we'd generate the money to fix the roads. All we need is the sucky GOPers to follow the science and love the guv.

Wondering
Sat, 05/16/2020 - 5:35pm

Anonymous, are you mentally ill, just slow, or both?

Anonymous
Fri, 05/15/2020 - 6:23pm

Yeah, so let's all just keep hanging out at home ignoring the data available to us.

Raise taxes and the people who can will consider moving to another state more than they already are. Anyone paying attention can see other states have started to reopen and aren't seeing increases like all the "experts" predicted.

middle of the mit
Sat, 05/16/2020 - 2:25am

Who is going to do what you suggest?

If the wealthy left the wealthiest states, do you know what they would find? An internet infrastructure that is sorely lacking if even there. And once those people move there, what do you think is going to happen? Your and our road infrastructure is going to be sorely lacking too.

And then your grocery stores and pretty soon your taxes go up to provide all of the services that you didn't think you needed before because those people lived in the "liberal tax hole" that has some how, using your logic, become "your urban taxhole".

Get it yet?

This is literally how ghost towns were made.

And the only people who think that COVID isn't in those open states are people like you.

Open up and it all goes away.

I want YOU TO TELL YOUR GRANDPARENTS TO COME HOME!

I want YOU to tell your parents to deal with it.

I REALLY WANT YOU TO TELL THE PEOPLE AT FOX TO GO BACK INTO STUDIO WITH NO MASKS!

When they start walking the walk instead of pushing words out of their mouth, safe behind their laptop, then I will start believing.

https://www.youtube.com/watch?v=GIFZ3dadlTI

DEPECHE MODE - POLICY OF TRUTH

Anonymous
Sat, 05/16/2020 - 8:49am

Rich people use satellite services. They never lack for anything. It's lowlifes like the rest of us that suffer. Inexpensive broadband for rural America will be seen as a deep state conspiracy by Bill Gates to rule the world and kill everyone. Thank God, there are actually some billionaires like Bill Gates who are altruistic and compassionate. Too bad there are too many Trump supporters whom Trump would never allow to stay at his resorts because they are too low class. Trump has them hypnotized to think he cares about them while he encourages their reckless behavior that will kill their grandmas and kids, if not them too. He just wants your vote, folks. He hates you.

Hank Quayle
Fri, 05/15/2020 - 9:49pm

So here is what is going to happen. The Governor is going to tank the economy to hurt Trump and create a state full of fear and panic and bankruptcy. She's already passed executive orders that allow it easier to put in place constitutional amendments, and she's going to make it 'easier to vote' (aka, commit massive fraud). There is going to be two new constitutional amendments proposed- a massive property tax increase (for the kids and schools) and a massive income tax increase that will be progressive in nature (to hit 'the rich'). Her 'emergency powers' will remain in existence so that she can collect and count the ballots.

And at the end of this crisis, Michigan will emerge with the perfect progressive state in which few have jobs, everyone gets taxpayer paid abortions with ease, the rich (who hide their income from income taxes and write the legislation so that it doesn't hit them) get richer, the middle class is destroyed, and the serfs get stuck living permanently in poverty (voting Democrat out of desperation for the handouts this party promises them).

And if you disagree with my thoughts, Whitmer is probably right and you're a racist, misogynistic, dumb, evil person.

LMAO
Sat, 05/16/2020 - 12:37pm

Um, sure this is all a plot to hurt Trump and his chances at reelection. Everyone don't worry about COVID19. NYC is pulling the biggest hoax since 911. And the plot thickens, Trump is in on it too. That is why he has been so inept at handling this from the beginning. Hank, it's time for your meds and a nap.

Anonymous
Sat, 05/16/2020 - 5:41pm

Hey Hank, what's the GOP plan? They tanked the economy 2008. Thankfully we elected Obama to rescue us. Now Trump tanked the economy even more in 2020, leaving Biden to rescue us. Thank God Whitmer is here or we would already be not only broke, but dead.

What is the GOP solution to the mess they created? Oh yeah, Trump's new campaign slogan, "Trump: Thoughts and Prayers 2020!"

Libby Smart
Sat, 05/16/2020 - 12:23am

Look, I think that the one thing that we can all agree on is that Whitmer is the victim in all of this, right? The budget is a sexist and racist thing and is just trying to get bring her down, and we should blame NUMBERS and not her, because I STAND WITH HRE, right? We can all agree on these points, which are nonpartisan and reasonable and not radical, right?

Agnosticrat 2.0
Sat, 05/16/2020 - 7:33am

Whitmer is kicking butt against the Trump virus and the presidents cult following continues to have their feelings hurt by that.

Clean your mess GOP
Sat, 05/16/2020 - 9:00am

The one thing we can agree on is that 69% of Americans don't feel comfortable sending their kids to school in the fall. In the new poll, released the same week in which the debate over when students will return to school created a divide between President Trump and the nation's top infectious disease expert leading the effort to combat the coronavirus, more than two-thirds of Americans (69%) who have a child under the age of 18 living at home who had been enrolled in school before the pandemic said they are not currently willing to send their child back to school.

https://abcnews.go.com/Politics/large-majority-americans-country-lags-te...

GOP legislature better fix the problems or they will incur the wrath of angry hockey moms of both parties.

10x25mm
Sat, 05/16/2020 - 7:37am

Our ace Governor is going to have some difficulty selling a bailout after two months of her intensive self-mutilation.

Employment by the State of Michigan will revert to the vow of poverty it was 150 years ago.

Anonymous
Sat, 05/16/2020 - 12:52pm

I think the US Senate and the president have some explaining to do if they don't pass the new House Bill, especially MOSCOW MITCH.

Hopeful
Sat, 05/16/2020 - 8:26am

The House bill will help greatly once the Senate passes it and the President signs it.

Arjay
Sat, 05/16/2020 - 10:29am

And don’t you realize that YOU will pay for the $3 Trillion boondoggle?

Anonymous
Sat, 05/16/2020 - 12:53pm

I will gladly pay the bill, if I am alive.

Arjay
Sun, 05/17/2020 - 3:44am

Good. You prepared to write a $10,000 check because that’s your share, and for a wife and every kid you have, increase it by $10,000 for each.

Anonymous
Sun, 05/17/2020 - 3:51pm

Is that all the life of you and your family is worth? Damn.

Choose life!
Sun, 05/17/2020 - 3:52pm

Hey Arjay, it probably costs more for a funeral. Just sayin'

Libby Smart
Sat, 05/16/2020 - 2:26pm

If it passes, it will destroy a lot of industries and business. For example, one of the provisions in it says that small real estate investors (those owning less than 10 properties) can't collect rent any more. It's more complicated than this, of course, but small property owners would be destroyed in this bill. Of course, large investors and large property holders, who donate to Democrats and who wrote the legislation, would be able to collect rents still, and would gobble up all of the small mom and pop operators after they went bankrupt. Big business and big labor combining with big government- that's the modern day Democratic Party. It's also the fascist parties of the 1930s.

JLK
Sun, 05/17/2020 - 9:02pm

[citation needed -- Check the language of the bill again.]

A.R.Eynon
Tue, 05/19/2020 - 8:33am

I'm with you Libby. I guess when you are ignoring The Bill of Rights, placing a population of 11 million under house arrest and asserting unilateral control in the face of more than 200 years of a tri-part government, that pesky 5th Amendment Takings Clause is far too nuanced for your little brain; i.e., the "legalities" Whitmer is so very proud of ignoring while she "saves lives" like some Jim Jones Jesus. Here is a wee fact for our Governor and Legislature: The 5th Amendment Takings Clause applies to all property rights including those of mortgagees (those who lend money and take a mortgage) and landlords. What just compensation is the State prepared to offer in exchange for stripping mortgagees and landlords of their 5th Amendment property rights???

Bad news for Trump
Sat, 05/16/2020 - 9:02am

Poor Trump already lost the support of seniors who voted for him, once they realized during the pandemic that they are expendable, not only in terms of their actual lives, but also in terms of starvation because their financial lifelines. Their 401Ks were decimated. It's a tough time to start living on cat food, if not the cats themselves, and still afford basics like medicine.

Avenged
Sat, 05/16/2020 - 12:15pm

Hmmm my 401k is still doing just fine the markets are still up even with the huge swings.

Avenged in Denial
Sat, 05/16/2020 - 12:54pm

Good one!

Gazelda
Sat, 05/16/2020 - 11:50pm

Yes, mine too.

I call BS
Mon, 05/18/2020 - 1:13pm

Okay, which stocks or portfolios?

Anonymous
Sat, 05/16/2020 - 9:05am

It's a perfect time to renogotiate the corporate welfare deals given out since 2008, and to increase taxes on the rich.

Anonymous
Sat, 05/16/2020 - 12:56pm

At the very least, rollback the give aways since Trump took office. Bail out people not multinational corporations. Marshall Plan for AMERICA. I think I have Biden's bumper-sticker. Joe, feel free to use it!

Gazelda
Sat, 05/16/2020 - 11:52pm

Why not, Joe feels everything else.

Anonymous
Mon, 05/18/2020 - 1:15pm

You must be thinking of Trump talking on the Access Hollywood tape.

Tim Bartik
Sat, 05/16/2020 - 10:24am

It should be noted that the Consensus Revenue Estimating Conference predictions of budget shortfalls are likely conservative, as they are based on a relatively optimistic national economic forecast. The forecast is plausible, but by no means assured. CREC assumes U.S. unemployment of 9% in 2020, 7.1% in 2021. The Congressional Budget Office forecasts 11.4% in 2020, 10.1% in 2021. The median forecaster in a survey of forecasters released on May 15 by Philly Fed was for 10.8% in 2020, 8.1% in 2021. Research suggests each 1 extra percentage point unemployment reduces a state's tax revenues by 3.7%. So the predicted budget problems in CREC could easily be doubled with alternative economic assumptions.

Anonymous
Sat, 05/16/2020 - 12:58pm

So just let the people die?

Anonymous
Sat, 05/16/2020 - 7:45pm

"Research suggests each 1 extra percentage point unemployment reduces a state's tax revenues by 3.7%."

Tim, so are you in agreement that we need a GREEN NEW DEAL immediately, create high paying jobs for infrastructure so Michiganders can work and pay taxes? As you said, the more people working the less taxes needed. It would be an investment in our future for ALL Michiganders, rather than just another gift for the rich. They say the GOP will pay money to universities to build instructional buildings, but not for housing. Then why not pay for infrastructure? Rather than just "give away" stimulus money to "save jobs" "while people stay home", why not put people to work with high-paying jobs fixing roads and other necessary infrastructure, right now while the weather is nice and there are fewer people driving on the roads?

Anonymous
Sat, 05/16/2020 - 7:51pm

Tim, we also DESPERATELY need inexpensive broadband internet service throughout our state. Now is the time to build it. Imagine how much better online education and business would be if we committed to excellence in low-cost broadband service across the state. Why are our federal and state governments paralyzed, instead of seizing opportunities? Our country could be on the forefront as best nation in the world, producing everything needed concerning the pandemic, instead of leading the world with the most COVID19 deaths.

ernie
Sat, 05/16/2020 - 10:32am

The concept of Bridge seems admirable: stay in the middle. Foolish. Imho, open all businesses and let free Americans decide for themselves how to live. I am 81. I can care for myself and my family. I have little concern or compassion for those who buy now pay later, and those who have screwed up their lives in any way. I tipped a check-out gal in Wal-Mart $20 this week. Why? She was going her job in a great way and did as I asked re bagging and not bagging my $100 purchases. I respect those that live lives that Ayn Rand would be proud to know. Single moms who chose under 21 year old bad boys as their life mates are not my heroes. God bless their kids. I drive a 2005 truck; my wife a 1999 Ford. Why should I and others like me be asked to subsidize my unemployed neighbors driving new leased cars? Maybe I am a hard ass but no one is owed the things liberals and middle of the readers (think Bridge) might like everyone to have. Thank you.

To crotchety
Sat, 05/16/2020 - 1:03pm

Easy for an 81 year old, with $20 bucks to spare on tips. Ayn Rand was a welfare queen. Maybe your neighbors don't have money to buy a new car and can't afford a used money pit. Stop judging others so much. That's why you didn't get the hot women. We all need other people and you most certainly don't want some underpaid person spitting on your food now. BE NICE.

ernie
Sat, 05/16/2020 - 11:21pm

I am not judging singular persons. I am saying what you know to be truthful: people make decisions not in their long run best interests and then expect others to take care of them. As to my $20 tip.... had she refused more profusely I would have taken back by $20 and given her a Benjamin. Face it: we have two groups now in America; the Makers and the Takers. Which are you?
I was born in Detroit. Raised in Detroit. I started working at about age 8 or 9. Few families had cars. A supermarket opened on Mack and Maxwell. Us kids lined up on Saturdays to help the lady shoppers get their weekly food purchases to their homes. A 5 cent or 10 cent top was our reward. I always had a source of spending money; even catching pigeons in parks which were food to certain groups and racers at times. Same in college: working all years and my degree in 4 years with no debt.
America is the greatest country in the history of man. Opportunity exists for everyone. But too many people have become takers. They want free college. They want, and want, and want. I received the $1200 I do not need. Earlier that same day I gave $10 to a guy that replaced light bulbs in my truck. I've got $1170 yet to give away. I have another $20 sitting in my garage for my mail carrier. Btw, I have also taken care of tuition for my 6 grandkids. Why tell you this? Because I am no brighter than anyone else, but I made conscious decisions for 75 years to enable me to now be retired for 24 years. This country gives everyone that same opportunity. But the takers want to change our country. Today I gave a 2020 Trump yard sign to a neighbor. He was ecstatic. This presidential election is significant. The protests you see across our country is by the makers. Enough is enough.

Anonymous
Sun, 05/17/2020 - 4:04pm

My neighbors were like you, only in their nineties, they both voted for Trump and died before he took office. I curse them every single day.

Concerned
Sun, 05/17/2020 - 4:08pm

How do you feel about Medicare?

Gazelda
Sat, 05/16/2020 - 11:56pm

Well said, Ernie.

ernie
Sun, 05/17/2020 - 11:01am

Thank you. Even though I am well off I shop at Walmart. I see too many people obviously over 200# loading their carts with useless calories; as soda pop on the edges of their carts. When even educators are prohibited from making judgements (as just pass the kids without teaching them), when PC is given more importance than straight talk, why should we expect anything more than we have now?

Anonymous
Sun, 05/17/2020 - 4:07pm

Oh, but you don't judge much. LOL

ernie
Sun, 05/17/2020 - 11:01am

Thank you. Even though I am well off I shop at Walmart. I see too many people obviously over 200# loading their carts with useless calories; as soda pop on the edges of their carts. When even educators are prohibited from making judgements (as just pass the kids without teaching them), when PC is given more importance than straight talk, why should we expect anything more than we have now?

Arjay
Sat, 05/16/2020 - 10:43am

Everyone does realize that it didn’t have to be this way if the ego mistress had an ounce of sense in her head. Offices that have zero contact with the general public could have remained open with measures put in place. Manufacturing could have continued with measures put in place. The classification of essential vs. non-essential was completely arbitrary and appears to be very political. And even in the public arena, measures could have been put in place such that the general public would be protected and the business owners surely would protect themselves.

It is all very simple. Keep people apart and sanitize contact points. If only Ms. Whitless would understand that she alone brought on this great economic debacle, and looking at the numbers, did absolutely nothing to prevent spreading the virus.

Thank you, I’ve thoroughly enjoyed spending my time the last several months in a state with low case and casualty numbers, played golf whenever I wanted, enjoyed my daily walks and biking in the sunny weather, spent a ton of money at the local retailers, and stayed virus free.

Arjay Nuts
Sat, 05/16/2020 - 1:09pm

Listen, Arjay, people in both red and blue states are not moving because they are smart. We know this from cellphone records. So quit blaming our governor. Trump is the culprit. We still don't have free reliable testing that would allow us to reopen. He doesn't even have reliable testing at the White House. He is a failure. He lied, He acted late. He did not fill the strategic reserves. He disregarded the Obama handbook to address pandemics, He dismantled the office in charge of monitoring pandemics. He fired the personnel who wanted to warn us. He did not invoke the Defense Production Act, etc, etc, etc. Fauci, Birx, and Whitmer are the ONLY hope we have as Michiganders.

VeeMann
Sat, 05/16/2020 - 5:52pm

Delusional much?!

Your mother
Sun, 05/17/2020 - 4:06pm

Is that the best you've got? Try debunking the comments.

VeeMann
Mon, 05/18/2020 - 1:36pm

That would be too easy, yet not worth the effort.

Gazelda
Sun, 05/17/2020 - 12:06am

If Whitmer isn't to blame, why is Trump to be blamed? I'm not following your reasoning, but don't try to explain. Fault lies at the source of the virus and the WHO for not containing it and being proactive instead of covering for the country of origin. If you're going to play the blame game, start there.

3 words
Sun, 05/17/2020 - 3:58pm

DEFENSE PRODUCTION ACT

JLK
Sun, 05/17/2020 - 9:21pm

I think you need to look into WHO's mandate before blaming them for anything. They lack enforcement powers. All they can do is issue recommendations. They did so. Most of the Trump administration ignored them. Those who didn't were told to stand down by the president who consistently told people that the numbers would go down, not up. Or that this thing would disappear magically one day when we had a little sunlight. He was in complete denial until it was too late and outbreaks were everywhere. A coordinated national response could have contained outbreaks as they occurred should have been put in place. As it stands, he couldn't even coordinate the supply chains to protect hospital workers with PPE or keep farmers from plowing under their crops, dumping excess milk, etc. The list of failures at the federal level is long and grows daily for those paying attention.

Anonymous
Mon, 05/18/2020 - 1:19pm

Gazelda, you are suggesting China is a fault, but Trump praised China

Anonymous
Sun, 05/17/2020 - 4:17pm

Arjay, was that Florida where the cases are under-counted and many cities had nightly curfews? No curfews in Michigan.

John Czarnecki
Sat, 05/16/2020 - 11:05am

Try moving to a 18 month fiscal year. Did that during Milliken’s time in office. It may have been a 25 month during his time.

Moscow Mitch
Sat, 05/16/2020 - 7:58pm

Just bankrupt the state!

Andrei
Sat, 05/16/2020 - 11:22am

I dont understand why anybody is talking about how bad unemployment is and the fact that there are a lot of lost jobs. Wake up people, it was a mandatory shut-down of everything. What did u all expect?

Anonymous
Sat, 05/16/2020 - 7:56pm

We get state revenue from taxes. When people don't work, the state cannot function. We are in a state of emergency and we really need the state to function. There's no sales tax on groceries which are the bulk of what people need to purchase now. We need a progressive tax to solve the short and long-term problems.

Betsy McCaughy
Sun, 05/17/2020 - 9:45pm

Personally, I expected the government to do what it has always done when faced with similar crisis, and not shut down everything. That was an unprecedented and radical action. But it was done, and what is done is done. By now though almost all nations and states have recognized the massive policy failure that these shut downs were and have begun opening up. I don't think people are faulting Whitmer for the shut down (although it was late in coming and was draconian in nature and shut down odd things while allowing other odd things to remain open). The criticism is that Michigan isn't opened up right now. Today. We're still shut down. Wake up- it is time to open up Michigan and end the radical and unprecedented policy failure that was the 'stay home' order.

I call BS
Mon, 05/18/2020 - 1:24pm

Which countries think the shutdowns were/are a failure? We have over 90,000 dead people in our country, and growing with the shutdowns. Trump said there would have been 2 million dead without the shutdowns. So is Trump wrong?

todd green
Sat, 05/16/2020 - 11:37am

It [appears] that however certain forms of government are better calculated than others to protect individuals in the free exercise of their natural rights, and are at the same time themselves better guarded against degeneracy, yet experience [has] shown that, even under the best forms, those entrusted with power have, in time and by slow operations, perverted it into tyranny.
Thomas Jefferson

Anonymous
Sat, 05/16/2020 - 8:00pm

Not sure what this slave-holder meant or what it has to do with the budget. You mean enslave people?

Brad
Sat, 05/16/2020 - 12:02pm

Michigan must not need the money to bad. I have $300 in checks sent to the SOS over a month ago for boat and car registration that have not been cashed.

Grave needs
Sat, 05/16/2020 - 12:25pm

We need to hire people to enforce social distancing, urgently. At Eastern Market, about 95% or more of people were wearing masks which was surprisingly higher than I thought it would be, but there were times in the market where there was no social distancing at all. Other parts were fine. It wasn't crammed with people like it used to be, but some people did not care at all about where they walked, where they stopped, how close they got. Another thing, on two occasions, there two people walking down a sidewalk, next to each other with a wagon in between them. So coming from the opposite direction, I had to walk in the street to pass them, instead of them walking single file. Come on people, use some common sense. In the meantime, businesses like Eastern Market need to do a better job enforcing social distancing. Otherwise, it was a beautiful day in the city, weather-wise. I noted very very few cars and empty streets, mostly just very few people getting some fresh air jogging or walking. It's obvious the vast majority of people in Detroit know this is serious, but I wonder about the rebels who seem to not care about others.

VeeMann
Sat, 05/16/2020 - 5:55pm

Well like the saying goes, "My freedom doesn't end where your fear begins." You don't like it stay home.

Interesting
Sun, 05/17/2020 - 4:11pm

So "VeeMann" if we don't like your reckless or drunk driving, do we have to stay off the roads or you?

VeeMann
Mon, 05/18/2020 - 1:35pm

Its called personal responsibility. BTW, I don't drive recklessly. But thanks for trying.

Anonymous
Sat, 05/16/2020 - 8:34pm

I agree. The state needs to hire a bunch of young strong males (since they are less likely to get sick), give them all black or brown shirts to wear, and then tell them to enforce the social distancing bans and any other rules that Whitmer issues.

Anonymous
Sun, 05/17/2020 - 4:12pm

Yeah, just like police do on our highways. So scary.

Gazelda
Mon, 05/18/2020 - 1:27pm

Sounds like Nazi Germany.

Meema24
Sat, 05/16/2020 - 12:49pm

I would like to know how a 16 year old, who has never had a job, can collect unemployment plus the $600 federal money. Is there a glitch in your system? Are they legally allowing this? I sure think the tax payers deserve to know if this is a benefit their teenager get.

Anonymous
Sat, 05/16/2020 - 8:02pm

What's your name? We can look into that.

End the entitlements
Sat, 05/16/2020 - 5:05pm

It is past time for the Government of Michigan to go on a spending diet. End the entitlement programs and giveaways. This is all long overdue. Now if we can get the Federal government to do the same we might get somewhere. But sadly, it is only a dream as both federal and state governments like to spend money we do not have and pass the buck down to our children and grandchildren.

Todd
Sat, 05/16/2020 - 7:25pm

This is a democrats dream come true. Christmas came early them.

Touche
Mon, 05/18/2020 - 1:28pm

The GOP had their early Christmas November 2016, the gift that keeps on giving, the first openly socialist GOP president.

Burton Bonham
Sun, 05/17/2020 - 7:17am

We as tax payers pay for schools, firemen, police first above all. They should never have budget cuts. First on the cutting block should be government spending. Politicians should have pay cut to minimum wage. Eliminate the fully paid health care for politicians and family members for life. Siphon money from the 214315 millionaires, and the six billionaires that reside in Michigan. How about taxing these businesses that are worth ungodly amounts all from OUR resources? Ice Mountain for instance.

Peter Ricketts
Sun, 05/17/2020 - 10:27am

Maybe she should use some of her scientific data and stop spending!! She has a budget surplus before entering office. It was gone before Coronavirus.

Be honest
Sun, 05/17/2020 - 4:28pm

Mr. Ricketts, now please tell us how Mr. Trump did since taking office. You sound like you are projecting.

JLK
Sun, 05/17/2020 - 9:26pm

[citation needed]

water2Wine
Sun, 05/17/2020 - 12:01pm

You can't raise my taxes. I have no money. What will you do? All State Dept. workers and please do put legislators at the very top of that list, must take a pay cut! They are the only ones that have not had a pay cut in years and years and years! They have lorded over teachers and cut their pay until we have only substitutes to teach our kids. Now I want to see their pay cut to near nothing. I want them to worry about buying a carton of milk for their own kids. Isn't that awful? That is how I feel about all of them. Do unto others.

Carol
Sun, 05/17/2020 - 12:15pm

This is an extreme example of the danger of balanced-budget requirements for federal and state governments. They are not profit centers, unlike any successful business. Instead, well-run governments save during times of high GDP so they can spend during times of need. Neither the state nor the federal government did this. Requiring balanced budgets defeats the purpose.

Amen
Sun, 05/17/2020 - 4:32pm

You are absolutely right, Carol.

lene3168
Sun, 05/17/2020 - 5:25pm

What does she expect? Close all business Dow and there is NO revenue! Just open up Michigan money will pour in again! What happen to the 4.2 billion was available when you took office!!!

John S.
Sun, 05/17/2020 - 8:44pm

Well, when expenditures are greater than revenues, there is a need either to find new sources of revenue or to cut expenditures. Typically, elected public officials prefer revenue increases to budget cuts. These times, however, are not typical. What will happen on the revenue side? What will happen on the expenditure side? State legislators have their work cut out for them this year. There will be need to compromise. They can't kick the can down the road on this one.

Sam Kirk
Sun, 05/17/2020 - 9:55pm

States do not deserve a federal bailout.

Anonymous
Mon, 05/18/2020 - 1:32pm

Why not? It's our country, our money.

pierredeboe
Tue, 05/19/2020 - 10:50am

Governors now are working harder than any other time in modern history. They are earning every dollar in their contract. Witmer does not know if she will be shot by any one of the several AK toting MAGA hat wearing faithful. No one could have predicted this as all were blindsided. Compound that with the leadership vacuum in D.C. and we have a long summer ahead of us with what appears to be an undesirable outcome . We are subjects in a global petri dish, like it or not. Blaming the governor is the easy solution.

Whitmer caused this.
Fri, 06/05/2020 - 9:35am

Whitmer caused this problem with her draconian orders. Michigan should have had a “rainy day” fund years ago and both Republicans and Democrats are at fault in that failure.
The federal government should not “bail out” Governor Whitmer on the issue she caused by shutting down the state for so long. We are now forced to institute austerity measures because of Governor Whitmer and we should all remember that. We need state leadership that understands that a business friendly state is good for everyone.