michigan’s economy and budget budgetpre… · structural budget deficits fy 2010-11 gf shortfall...
TRANSCRIPT
Michigan’sEconomy and Budget
Mitchell E. Bean, Director
Prepared for:Representative RobertsDistrict 24 Town Hall Meeting
April 26, 2010
April 2010 2
Current GF/GP and Restricted Cuts (Approximately $850 million)
$500 million in GF/GP reductions and $350 million in reductions to restricted fund appropriations
Most operational departments’ budgets cut about 10%
Statutory Revenue Sharing for cities/villages/townships reduced by $73.8 million (19.0% reduction)
Michigan Promise Grant Program eliminated and $59.2 million GF/GP to need-based financial aid programs cut
Medicaid provider rates cut by 8.0% ($94.9 million) and non-Medicaid Community Mental Health services reduced by $40 million GF/GP
Human Services budget reduced by over $238 million
April 2010 3
School Aid FY 2009-10
$165 per pupil reduction ($263 million)
ISD operation reduction of 20% ($16.3 million)
Elimination and reduction of specific categorical programs totaling $32.8 million
Governor vetoed the Sec. 20J payments which reduced funding to 39 districts by a total of $51.5 million
April 2010 4
Structural Budget Deficits
FY 2010-11
GF shortfall approximately $1.3 billion
SAF shortfall approximately $415 million
FY 2011-12 (under all cuts scenario)
GF shortfall about 1.4 billion
Per pupil cut of $165 plus potential FY 2010-11 per pupil cut of $255 are not restored
April 2010 5
State Budget Shortfalls Caused By
Severe economic contraction led by domestic auto industry
State tax policy
Increasing cost of Medicaid and corrections
April 2010 6
U.S. Economy Lost 7.7 Million Jobs Since Recession Began
Source: U.S. Bureau of Labor Statistics, U.S. Department of Labor
100
165215
120
(72)(122)
(160)(137)
(161)(128)
(175)
(321)
(380)
(597)
(681)
(779)
(504)
64
(109)
14
(14)
162
(144)
(582)
(344)
(211) (224)(225)
(753)(726)
(347)
Sep 07 Nov 07 Jan 08 Mar 08 May 08 Jul 08 Sep 08 Nov 08 Jan 09 Mar 09 May 09 Jul 09 Sep 09 Nov 09 Jan 10 Mar 10
Thou
san
ds
House Fiscal Agency
April 2010 7
U.S. and MichiganUnemployment Rates
Sources: U.S. Bureau of Labor Statistics and January 2010 Consensus Estimates
3%
7%
11%
15%
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010
U.S.
Michigan
2009Q3 – 2010Q4are January 2010
Consensus Estimates
House Fiscal Agency
April 2010 8
U.S. % Change in EmploymentDecember 2008 Through December 2009
-3.6%
-15.0%
-10.1%
-4.1%-3.4%
-5.3%-4.3%
-1.0%
Total Non-Farm
Construc- tion
Manufac- turing
WholesaleTrade
Retail Trade Information
FinancialActivities Services
Source: U.S. Bureau of Labor Statistics
House Fiscal Agency
April 2010 9
Michigan % Change in EmploymentDecember 2008 Through December 2009
-5.2%
-17.2% -16.8%
-7.3%
-5.4%
-12.7%
-5.7%-5.0%
Total Non-Farm
Construc- tion
Manufac- turing
WholesaleTrade
Retail Trade Information
FinancialActivities Services
Source: U.S. Bureau of Labor Statistics
House Fiscal Agency
April 2010 10
Length of U.S. Recessions
11
16
6
16
8
8
10
19
# of Months From Peak to Trough
1969-70
1973-75
1980
1981-82
1990-91
2001
Average Post-War
December 2007 Through June 2009 ?
Source: National Bureau of Economic Research and IHS Global Insight, January 2010 Forecast
House Fiscal Agency
April 2010 11
Decline in GDP Steep Compared to Recent Recessions
-1.6%
-2.5%
-3.1%
-0.5%-0.2%
-3.2%
-2.2%-2.6%
-1.4%
0.7%
-3.7%
1948 1953 1957 1960 1970 1973 1980 1981 1990 2001 2008
Peak to Trough GDP Decline
Source: U.S. Bureau of Economic Analysis and House Fiscal Agency Calculations
House Fiscal Agency
April 2010 12
MICHIGAN FORECAST
April 2010 13
Job Growth in Michigan
Source: U.S. Bureau of Labor Statistics and January 2010 Consensus Estimates
(112.7)(76.7) (71.0)
(17.0) (9.2)
(63.2) (58.7)(85.0)
(34.0)
(285.6)
(105.7)
88.0
91-00 01 02 03 04 05 06 07 08 09 10 11
Thou
sand
s
Average AnnualJob Growth
10 & 11 areJanuary 2010
Consensus Estimates
House Fiscal Agency
April 2010 14
Big 3 Losing Market Share
13.915.1 15.1 15.6
17.416.8 16.9 16.5 16.1
13.2
10.311.2
12.5
1993 1995 1997 1999 2001 2003 2005 2007 2009 201130%
40%
50%
60%
70%
U.S. Light Vehicle Sales Big 3 Share
2009, 2010 & 2011are January 2010
Consensus Estimates
Source: Automotive News and January 2010 Consensus Estimates
Hou
se F
isca
l Age
ncy
April 2010 15
Michigan Vehicle Employment
Source: U.S. Bureau of Labor Statistics and January 2010 Consensus Estimates
322.6 332.3 341.5 346.1
317.0296.9
274259.3
241.2221.3
202.6
172.4
120.0107.8
94.6
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Thou
sand
s
2009, 2010 & 2011are January 2010
Consensus Estimates
Hou
se F
isca
l Age
ncy
April 2010 16
Property Value Growth Slowing
−4.3 %N/A2.5 %2011−8.0 %N/A−0.3 %2010
Yearly Change
1.4 %−1.1 %2.3 %2008−0.8 %−5.4 %4.4 %2009
5.2 %3.8 %3.7 %20075.8 %5.0 %3.3 %20065.6 %5.9 %2.3 %20055.7 %6.3 %2.3 %20044.8 %7.5 %1.5 %20036.7 %9.8 %3.2 %20027.1 %10.0 %3.2 %20015.5 %9.0 %1.9 %20006.0 %9.9 %1.6 %19996.1 %9.5 %2.7 %19985.7 %8.2 %2.8 %1997
Total TaxableValue Growth
Total SEVGrowth
Inflation RateMultiplier
for Property
April 2010 17
Apr
19
60
to
Feb
19
61
Nov
19
73
to
Mar
19
75
Jan
19
80
to
Ju
l 19
80
Jul 1
98
1 t
o N
ov 1
98
2
Jul 1
99
0 t
o M
ar 1
99
1
Mar
20
01
to
Nov
20
01
Dec
20
07
to
Jun
e 2
00
9
Au
g 1
92
9 t
o M
ar 1
93
3
May
19
37
to
Ju
n 1
93
8
Feb
19
45
to
Oct
19
45
Nov
19
48
to
Oct
19
49
Jul 1
95
3 t
o M
ay 1
95
4
Au
g 1
95
7 t
o A
pr 1
95
8
Dec
19
69
to
Nov
19
70
Apr
19
60
to
Feb
19
61
-14.73%
22.40%
-6.72%
20.58%
13.09%
7.39%
-3.31% -3.48%
1.33%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
*
Michigan Per Capita IncomeDeviation from National Average
*2009 and 2010 are EstimatesSource: National Bureau of Economic Research
House Fiscal Agency
April 2010 18
MICHIGAN REVENUE
April 2010 19
State of Michigan Revenue SourcesFY 2010-11 Total = $43,072.3 million
Income Taxes$5,349.7
12.4%
Federal Funds*$18,270.7
42.4%
Sales & Use Taxes$7,107.6
16.5%
Tobacco Taxes$942.52.2%
State Education Tax
$1,800.04.2%
Other Taxes$1,806.3
4.2%Transportation
Revenue$1,925.5
4.5%
Business Taxes$2,521.3
5.9%NonTax Revenue
$3,348.77.8%
*Federal Funds at Executive Recommendation Without ARRA
House Fiscal Agency
April 2010 20
Real and Nominal State GDP
$349,837
$359,030$363,076
$372,009$375,143
$379,934
$326,869
$336,862$341,109
$337,851 $339,872$334,843
$331,036$326,123
$334,419$337,235
$382,544
$310,000
$320,000
$330,000
$340,000
$350,000
$360,000
$370,000
$380,000
$390,000
2000 2001 2002 2003 2004 2005 2006 2007 2008
Nominal GDPReal GDP
Real State GDP is Down 3.30% Since FY 2000
Mill
ion
s
House Fiscal Agency
April 2010 21
Real and Nominal State Personal Income
$292,606$299,903
$303,009
$314,192$319,358
$325,664
$334,770
$343,585$349,612
$291,935$287,502
$292,227 $289,761 $291,386$283,854
$340,173
$289,935$289,188
$292,387
$250,000
$270,000
$290,000
$310,000
$330,000
$350,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Nominal GDPReal GDP
Source: U.S. Bureau of Economic Analysis. 2009 personal income numbers are from the January 2010 Consensus Revenue Estimating Conference.
Real State Personal Income is Down
2.99% Since FY 2000
Mill
ion
s
House Fiscal Agency
April 2010 22
Inflation Adjusted GF/GP RevenueDown 43.4% Since FY 2000
$8,764
$9,463$9,788
$8,042$8,309$8,764
$6,981$6,701 $6,638
$6,968
$8,990
$7,366
$8,427 $8,319$8,266
$9,359
$6,898
$7,959
$5,238
$9,252
$7,548
$6,926
$9,242
$5,283
$5,771
$7,265
$8,214
$6,944
FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11
Mill
ions
FYs 10 & 11are
January 2010ConsensusEstimates
Actual Dollars
Adjusted for Inflation
House Fiscal Agency
April 2010 23
Inflation Adjusted SAF Net RevenueDown 15.7% Since FY 2000
$9,310
$10,615$10,910
$11,082 $11,153
$9,131 $9,066$9,349
$9,141 $9,167$8,983 $8,900
$10,481 $10,715
$10,134$9,994$9,889
$11,513
$10,922
$10,458
$7,878
$8,797
$9,092$9,347
$8,936
$8,558
$8,009
FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11
FYs 10 &11are
January 2010ConsensusEstimates
Mill
ion
s
Actual Dollars
Adjusted for Inflation
House Fiscal Agency
April 2010 24
Sales/Use Tax Share Declining
Taxable Sales as a Percent of Personal Income
FY 0935.3%33%
35%
37%
39%
41%
43%
45%
47%
49%
51%
FY 78 FY 80 FY 82 FY 84 FY 86 FY 88 FY 90 FY 92 FY 94 FY 96 FY 98 FY 00 FY 02 FY 04 FY 06 FY 08
Per
cent
of
Per
sona
l Inc
ome
House Fiscal Agency
April 2010 25
Transportation Revenue
*HFA Estimates
$736.
3 $90
3.5
$931.0
$922.
0 $9
33.5
$938.
9 $9
35.7
$932.
1 $9
22.4
$906.2
$883.7
$84
8.9
$846.
0 $8
32.0
$86.3
$118.3 $134.6 $143.5 $133.2 $143.0 $157.0 $140.5 $146.3 $148.6 $143.8 $140.1 $117.6 $115.0
$647.
2 $713.
6 $758.5
$80
2.9
$824.7
$87
7.1
$892.7
$97
8.5
$896.0
$898.8
$9
07.8
$894.
7 $87
1.9
$861.5
$1,868$1,959
$2,051$1,954
$1,884$1,809
$1,735
$1,470
FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10*
Mill
ions
of
Dol
lars
Net Vehicle License/Registration
State Diesel Fuel Taxes
State $.19/gal Gasoline Tax
House Fiscal Agency
April 2010 26
Michigan Gasoline Tax Revenue
$800
$825
$850
$875
$900
$925
$950
FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10*
Mill
ions
*Michigan Department of Treasury, May 2009
House Fiscal Agency
April 2010 27
Impact ofTax Exemptions/Credits/Deductions
Bill
ion
s
$10
$15
$20
$25
$30
$35
FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Tax Exemptions/Credits/Deductions
Revenue
Revenue$6.8 BillionHIGHER
Revenue$6.3 Billion
LOWER
FY2009 (000)
Consumption $13,552,294Property 10,089,150Individual Income 9,649,451 Business Privilege 1,901,455Other 222,663House Fiscal Agency
April 2010 28
Impact of Recent Tax Cuts on Future Revenues
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Reducing Michigan IIT Rate $0.0 $0.0 $0.0 ($150.0) ($329.0) ($522.5)
Alternative Energy Credits IIT ($16.0) ($46.0) ($47.0) ($42.0) $0.0 $0.0
Michigan EITC ($140.0) ($325.0) ($338.0) ($358.3) ($379.8) ($402.6)
Eliminating MBT Surcharge Eliminated in Tax Year 2017
MBT Battery Credit (Assumes Maximum Used) $0.0 $0.0 $0.0 ($40.0) ($268.0) ($278.0)
MBT Film Production Credit ($37.5) ($100.0) ($125.0) ($125.0) ($125.0) ($125.0)
Photovoltaic Technology - Facility & Manufacturing $0.0 ($0.8) ($9.8) ($12.5) ($12.5) ($15.0)
Polycrystalline Manufacturing Credit $0.0 $0.0 $0.0 $0.0 ($25.0) ($25.0)
MBT Gross Receipt Changes ($115.8) ($80.5) ($93.4) ($117.8) ($129.9) ($132.7)
Decouple Bonus Depreciation/Production Activities $172.5 $23.4 $19.2 $45.3 $52.3 $60.0
Historic Preservation Credits $0.0 $0.0 ($5.0) ($8.6) ($9.6) ($10.6)
Promise Zones - SET $0.0 ($1.0) ($4.0) ($10.0) ($15.0) ($20.0)
IFT Exemption for Commercial Real Land ($2.0) ($2.0) ($2.0) ($2.0) ($2.0) ($2.0)
Use Tax Bad Debt Deduction Change (Court Case) $0.0 ($25.5) ($16.6) ($17.1) ($17.7) ($18.4)
Exempt Supplies for Cobo Center $0.0 $0.0 ($2.5) ($2.5) ($3.5) ($1.5)
Totals in Millions ($138.8) ($557.4) ($624.1) ($840.5) ($1,264.7) ($1,493.3)
April 2010 29
Potential GF/GP Revenue Growth(millions)
ConsensusFY 2011 FY 2012 FY 2013 FY 2014
Baseline RevenueAssume 3% Growth $6,968.4 $7,177.5 $7,392.8 $7,614.6
Adjust for Tax ChangeNot Built Into FY 2011 N/A ($194.4) ($591.5) ($789.1)
Net GF/GP Revenue N/A $6,983.1 $6,801.3 $6,825.5
Percent Change from Prior Year N/A 0.2% (2.6%) 0.4%
*
* Note: 3% baseline growth has not been achieved since 2000.
April 2010 30
Senior Tax Preferences
Income Tax
Fully exempts social security, military, federal, state and local government pension/retirement income
Exempts private pensions up to $45,120 single/$90,240 joint (TY 2009); indexed to inflation Annual cost all pension income exemption = $725
million
Deduction for senior investment income $10,058 single/$20,115 joint; indexed to inflation Annual cost = $40 - $50 million
April 2010 31
Senior Tax Preferences
Income Tax
Additional Personal Exemption $2,300 single/$4,600 joint (TY 2009)
Annual cost = $55 million
Property Tax
Homestead Property Tax Credit Under age 65 – credit is 60% of the amount by which
property taxes exceed 3.5% of household income, up to a maximum of $1,200
65 and older – credit is 100% of the differenceAnnual cost = $320 million
April 2010 32
Demographics
Michigan’s population is aging
2000 – 12.3% pop age 65+
2010 – 12.8% pop age 65+
2020 – 16.0% pop age 65+
2030 – 19.5% pop age 65+
Senior tax preferences will get more expensive
April 2010 33
Fewer People Pay Income Tax
Tax Liability < $0 19.5% 25.6%
Tax Liability = $0 8.0% 8.0%
Tax Liability < $100 33.6% 38.6%
2000 2008
April 2010 34
Refundable Credits on the Michigan Income Tax
Homestead Property Tax Credit ($987.5 million in FY2009-10)
Earned Income tax Credit ($333.0 million in FY2009-10)
Alternative Energy/Qualified Home Improvement Credit ($46.0 million in FY2009-10)
Adoption Credit ($1.0 million in FY2009-10)
Stillbirth Credit ($41,000 in FY2009-10)
April 2010 35
Indexed Provisions of the Michigan Income Tax
Personal Exemption
Special Exemptions for Seniors and/or Disabled Individuals
Special Exemption for Qualified Disabled Veterans
Income Threshold for Pension Income Deduction
Income Threshold for Deduction of Interest and Capital Gains Earned by Seniors
Home Heating Credit
Stillbirth Credit
April 2010 36
MICHIGAN’SBUDGET
April 2010 37
FY 2009-10 BudgetAdjusted Gross Funding Sources
Federal$19,053,531,500
42.63%
GF/GP$8,128,532,000
18.19%
State Restricted$17,042,304,700
38.13%
Other$25,170,836,700
56.32%
Local/Private$468,942,300
1.05%
Adjusted Gross = $44,693,310,500
58.7%of State Sources
fundingis paid to
local governments
YTD 4/12/2010
House Fiscal Agency
April 2010 38
FY 2009-10 Appropriations Funding
Adjusted Gross = $44,693,310,500
Restricted/Other$20,502,941,400
45.9%
SAF$12,793,364,800
28.6%
GF/GP$8,128,532,000
18.2%
Transportation$3,268,472,300
7.3%
37.7% Federal60.6% State Restricted
1.7% Local
76.9% Federal21.1% State Restricted2.0% Local/Private
16.0% Federal84.0% State Restricted
YTD 4/12/2010
House Fiscal Agency
April 2010 39
State Taxes and FeesFY 2009-10
Other19.1%
Education50.2%
Corrections7.7%
Tranportation7.9%
Community Health15.1%
FY 2009-10 Total = $25,170,836,700
YTD 4/12/2010
House Fiscal Agency
April 2010 40
FY 2009-10 GF/GP
Community Health29%
Corrections24%
Colleges / Universities
22%Human
Services10%
State Police3%
Debt Service4%
Other9%
4.0%$300 million
Debt Service and SBA Rent
DELEG0.67%
State0.22%
Education0.25%
Attorney General0.35%
School Aid0.37%
Military Affairs0.45%
Civil Rights0.14%Legislative
Auditor General0.14%
Executive Office
0.06%
0.72%0.91%
Treasury1.07%
Legislature1.29%
Judiciary1.88%
FY 2009-10 Total = $8,128,532,000Management and BudgetResource
Protection
House Fiscal Agency
April 2010 41
School AidMajor Spending Categories
Foundation allowances(used for school operations)absorb $3 out of every $4 spent
Other Programs$403,265,400
3.1%
Foundation Allowances
$9,341,300,000 72.8%
Early Childhood Programs
$106,975,000 0.8%
Federal Programs (non-Special Ed)$1,177,059,400
9.2%
At-Risk Programs$308,988,200
2.4%
Special Education$1,485,983,000
11.6%
FY 2009-10 Total = $12,823,571,000
Note: Does not include local revenue and recognizes the $165 per pupil reduction.
YTD 4/12/2010
House Fiscal Agency
April 2010 42
Medicaid Impact on Michigan Budget
For FY 10, approximately 17.7% of Michigan GF/GP revenueis appropriated for Medicaid
1 of 6 Michigan residents were eligible for Medicaid inApril 2009
42% of births and 70% of nursing home expendituresin Michigan are financed through Medicaid
Total state and federal Medicaid appropriation isover $10.7 billion in FY 10
Since FY 1999-2000
109.8% increase in Medicaid funding
52.6% growth in Medicaid caseload (559,400 cases)
April 2010 43
Corrections Budget IncreasesFY1023%
0
10
20
30
40
50
60
FY71 FY74 FY77 FY80 FY83 FY86 FY89 FY92 FY95 FY98 FY01 FY04 FY07 FY 10
Pri
son
/Cam
p P
opu
lati
on in
Th
ousa
nd
s
Prison/Camp Population
Corrections % of State GF/GPFY0921%
FY712%
FY793%
FY899%
FY9515%
Fiscal Year 2008-09 includes GF/GP reductions due to appropriation of federal ARRA funds.Fiscal Year 2009-10 includes the impact of gubernatorial vetoes of negative line items in the MDOC budget.
House Fiscal Agency
April 2010 44
ARRAARRA
$0
$6
$12
$18
$24
$30
$36
$42
$48
FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10ytd
Adjusted Gross Appropriationsby Fund Source
Excluding federal funds, FY 00 = FY 10 adjusted gross appropriations
YTD 4/12/2010
Bill
ion
s
Fede
ral
Res
tric
ted
GF/
GP
Local + Private
House Fiscal Agency
April 2010 45
GF/GP Appropriations
$9,189.0
$8,766.9
$9,981.8
$8,128.5$8,612.6$8,438.9
$8,176.8 $8,251.0$8,133.5
$6,953.3
$8,569.2
$9,106.3 $9,118.7
$8,706.6$8,830.9
$7,500.2
$8,659.7
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 YTD FY 10*
Actual Dollars
Adjusted for Inflation
Mill
ion
s of
Dol
lars
YTD 4/12/2010
House Fiscal Agency
April 2010 46
School Aid BudgetAdjusted Gross Appropriations
$11,451.1
$12,554.7$12,606.2$12,700.6
$13,008.2
$13,259.8
$11,708.5
$11,189.4
$10,969.6
$12,823.6
$12,467.1
$12,897.8
$12,134.5
$11,507.7
$12,244.3
$11,605.6$11,602.8
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 YTD FY 10 YTD
Actual Dollars
Adjusted for Inflation
Mill
ion
s of
Dol
lars
YTD 4/12/2010
House Fiscal Agency
April 2010 47
Average Numberof Classified State Employees
0
10
20
30
40
50
60
70
80
FY71 FY74 FY77 FY80 FY83 FY86 FY89 FY93 FY95 FY98 FY01 FY04 FY07
Thou
sand
s of
Em
ploy
ees
16.7% DecreaseFY 01 to FY 09 YTD at 9/30/09
TOTAL All Departments
17.9% DecreaseFY 01 to FY 09 YTD at 9/30/09
TOTAL Without Corrections
House Fiscal Agency
April 2010 48
Constitutional Revenue Limit
Billions of Dollars
($8.94)
($7.78)
($4.22)
$0.16
($2.41)
($3.92) ($4.18) ($4.44)($4.95)
($5.32)($4.65)
($7.72)
FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11
FYs 10 and 11are January 2010
Consensus Estimates
Average decline of Michigan revenue = 0.1% per year from 2000 through 2011
Average growth of Michigan personal income = 2.7% per year from 2000 through 2011
House Fiscal Agency
April 2010 49
CURRENTISSUES
April 2010 50
Major School Aid Issues
Funding levels
Declining enrollment
Future issues:
Retirement costs
Infrastructure financing
Local property taxes
April 2010 51
Total Membership Pupil Counts
1,580,100
1,697,537
1,680,282
1,652,332
1,619,744
1,597,450
1,707,357
1,688,996
1,671,174
1,646,747
1,615,579
1,592,726
1,698,414
1,706,4071,710,630 1,714,705 1,714,185
FY 95 FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY10*
FY11*
Pupil Blend
50/50 FYs 95–97
60/40 FYs 98–99
75/25 FY 00
80/20 FYs 01–04
75/25 FYs 05–10
*FY 10 Unaudited Count; January 2010 Consensus Estimate
House Fiscal Agency
April 2010 52
Total Appropriations forState University Operations
$1,615.5
$1,565.9
$1,428.6 $1,419.8 $1,433.2$1,452.7
$1,467.3 $1,461.2
$1,379.7
$1,341.7
$1,286.4 $1,278.4$1,260.3
$1,285.5$1,257.8
$1,433.3$1,527.2
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10
Actual Dollars
Adjusted for Inflation
Note: Appropriations include delayed payments in FY in which funds were originally appropriated
Mill
ion
s of
Dol
lars
YTD 4/22/2010
House Fiscal Agency
April 2010 53
Revenue Sharing Payments toCities, Villages, and Townships
$800
$900
$1,000
$1,100
$1,200
$1,300
$1,400
$1,500
$1,600
FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10*
Mill
ion
s
Full Funding
Actual
Statutory and Constitutional Payments
*FY10 Amounts are Estimates
House Fiscal Agency
April 2010 54
Statewide Pavement ConditionCombined Freeway and Non-Freeway
Sources: Michigan Department of Transportation website and 2010-2014 Draft Five-Year Highway Program Presentation 11/19/09
71%69%
64%
82%
89%
75%
92%
69%
87%
78%
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
% P
avem
ent
in G
ood
Con
diti
on
Existing Condition Projected Condition Goal
House Fiscal Agency
April 2010 55
Reduced State RevenueMay Lead to Loss of Federal Aid
$475 $503 $549 $554
$84$89 $97 $98
$520** $565** $624** $593**
$1,152$1,216 $1,211 $1,172
$1,436*
2010 2011 2012 2013 2014
Mill
ion
s
Program Total With Routine Maintenance Federal Aid Lost State Revenue Shortfall*2010 Proposed Highway and Maintenance Capital Program with anticipated ARRA
**Estimated Resulting Program Amount (with declining state revenue and inability to match available federal aid)
Sources: Michigan Department of Transportation website and 2010-2014 Draft Five-Year Highway Program Presentation 11/19/09
House Fiscal Agency
April 2010 56
Summary
This year, the GF/GP and SAF budgets are probably OK
In FY 2011, the GF shortfall is about $1.3 billion and the SAF shortfall is about $415 million
In FY 2012, the GF shortfall about 1.4 billion
Transportation revenue shortfalls could lead to loss $2.0 billion federal transportation funds by 2014
Revenue is about $9.0 billion below the Headlee limit since 2000
The state economy has contracted about 3.5% since 2000 — due primarily to the restructuring of the auto industry
Real GF/GP revenue is down 43.4% since FY 2000
Real SAF revenue is down 15.7% since FY2000 — and 16.6% since first year of Proposal A
A 3.5% contraction in the state economy doesn't fully explain revenue declines
The structure of the state tax code is a real problem
www.house.mi.gov/hfa