Michigan Fiscal Agency Anticipates $735 Million Budget Surplus for 2011-12
Michigan (STOMI1)’s improved economy will allow it to finish the 2011-12 fiscal year with a $735 million surplus, said David Zin, the the Senate Fiscal Agency’s chief economist.
The surplus is due largely to money left over from the year that ended Sept. 30, according to a report from the agency.
The resurgence of the U.S. auto industry based in Michigan helped the recovery, according to the report. The state ranked second for economic health from 2010’s third quarter through the same period of 2011, according to the Bloomberg Economic Evaluation of States. It trailed only oil-booming North Dakota.
Increased growth and revenue are predicted to continue, though at lesser rates than last year. “Meaningful growth is unlikely to occur until a meaningful recovery occurs in both the financial sector and the housing industry, and consumers have improved their debt-to-income ratios,” the report said.
The Senate agency predicts weaker growth this year than in 2011 -- 0.3 percent compared with 2.2 percent -- and 0.8 percent growth in fiscal year 2013.
Total revenue of $19.8 billion this year will be 1.5 percent less than in 2010-11. Still, money left over is producing a general-fund surplus of $691.8 million and a $44.1 million balance for the school-aid fund for the year that ends Sept. 30, 2012, according to the report.
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