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Lansing Debates Fate of Budget Surplus

Author: Charles Owens Date: February 04, 2014

  • Lansing lawmakers and the Governor are debating over the disposition of a projected budget surplus.

Efforts by legislative Republicans and the Governor over the last four years have led the state from Granholm era deficits to a budget surplus.  Now Lansing lawmakers and the Governor are debating over the disposition of a projected surplus.

Income tax rate roll backs from the current 4.25 to 3.9 percent have already seen legislative activity in both the state House and Senate. The Governor offered up his plan for disposition of the extra funds in a presentation by State Budget Director, John Nixon. The Governor’s plan is more conservative, with increased spending for roads and education and a modest boost in the homestead credit on the state income tax cut. Meanwhile, the usual tax and spend suspects are clawing for extra money for their own programs and projects.

The size of state government's three-year surplus has been estimated at $971 million, however, Budget Director Nixon and others have cautioned that much of that number is “one-time” money that will not be recurring in subsequent years. In his budget presentation Nixon said that the one-time money is two thirds of the surplus or $646 million leaving only $325 million that is stable enough to include in the baseline annual state budget.

In the coming weeks NFIB will be surveying our small business members to determine what they deem to be the most appropriate plan for stewardship of the projected budget surplus.

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