(MPRN-Lansing) Michigan’s state revenues are seeing a slight upswing, at least for the next couple budget years. That’s according to experts during the Consensus Revenue Estimating Conference Thursday.
The conference meets twice a year and gives predictions of the state’s economic outlook. Governor Rick Snyder and the State Budget Office will use the information when compiling the 2017-2018 budget, which the governor is scheduled to present in February.
At the conference, economists predicted more economic growth in the United States and in Michigan, but said the growth will be slow. Director of the Research Seminar in Quantitative Economics at the University of Michigan, Gabriel Ehrlich said,
“absent any unforeseen external shocks or major errors in national economic policy we foresee continued growth.”
Ehrlich also predicted a slowdown in job growth in Michigan, but in this case it’s a good thing. He said the slowdown is in part because the labor force is getting toward full employment.
“We don’t believe it’s at full employment but there are fewer unemployed workers on the sidelines just waiting for jobs,” he said. “So we see job growth slowing down.”
Economists and budget experts agreed that 2018 is looking good. Michigan’s 2016 tax revenues came in about 330 million dollars higher than expected. But this is a so-called “one time” fund and can’t be counted on in the future.
But Michigan’s new budget director Al Pscholka cautioned against any major tax cuts based solely on 2018’s outlook.
“I think in terms of where we are in 2018, we’re in pretty good shape,” he said. “And we’ve got a balance to work with. It’s 2019, where the balance sheet becomes a little more problematic.”
Pscholka said some of those problems are pieces of legislation that are set to start after 2018.