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Tuesday, December 13, 2011

Michigan Left With $1 Billion Plus Surplus From Fiscal 2010-2011

LANSING - A combination of extra revenue and spending lapses from government departments could mean Michigan is left with a surplus from the 2010-11 fiscal year of well more than $1 billion, state budget officials said Monday.

Final numbers will not be available until the state's books for 2010-11 are closed. A preliminary book closing is expected yet this month, with the required audited closing coming either in late February or early March, officials said. By law, the audited closing has to come by March 31.

The surplus total could add to political pressure to spend money in some areas, particularly K-12 schools, instead of simply banking the funds.

The state notified Sen. Roger Kahn (R-Saginaw Township), the Senate Appropriations Committee chair, and Rep. Chuck Moss (R-Birmingham), the House Appropriations chair, in late November that lapses from state departments - funds appropriated but not spent - totaled nearly $204.7 million for the year. That total was far more than officials anticipated.

More than half that total, $124.5 million, came from the Department of Community Health.

Another $43.5 million came from the Department of Human Services.

The Department of Treasury accounted for lapses of $11.1 million and the Department of Corrections accounted for $5.6 million. The Executive Office kicked in about $118,700, but the House and Senate lapsed just $5,730. The Senate Fiscal Agency lapsed $7,146.

Combined with estimates of as much as an additional $500 million in general fund revenues and another $500 million in School Aid Fund revenues, the state could see a surplus from the 2010-11 fiscal year of as much as $1.2 billion.

Revenues have come in better than anticipated as unemployment has come down, though not dramatically, and income tax and sales tax collections have both increased.

So far administration officials have resisted calls to use some of the surplus for additional spending. Officials had indicated that Governor Rick Snyder was anticipating an essentially status-quo budget for 2012-13 when he unveils it in what officials expect will be February.

Officials have also said the state is looking more to use any surplus for either the Budget Stabilization Fund or to pay down debt obligations.

A number of the lapses stem from one-time events, including a larger than expected effect from the state's early retirement program that was enacted a year ago.

Among the large lapses at DCH, $92.6 million came from the medical services area. Part of that was due to the Medicaid caseload not increasing as much as anticipated, officials at the department said.

And part had to do with school-based services - where intermediate school districts provide assistance to Medicaid-eligible children - generating an unexpected $55 million in revenues the state was able to put to other areas. Part of that unexpected revenue came as the state implemented new reporting requirements from the federal government. Officials said they expected in the next several years to not see such dramatic changes as the state gets used to using the new requirements.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com


Author: Staff Writer
Source: Gongwer News Service

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