Almost every state in the country will face a budget deficit next year and more than half will face budget shortfalls in the double digits. An article in the current issue of Time Magazine (Inside the Dire Financial State of States, June 28, 2010) discusses how states across the country are facing staggering budget deficits for the third straight year. The billions of dollars of federal stimulus money will end this year and, so far, Congress has been unwilling to support a $50 billion emergency aid bill. Therefore, states across the country, including Michigan, will have no other choice but to address their budget deficits head on and address several difficult issues including education, Medicaid, public employee pay and benefits, and corrections funding. Another major issue is the long-term pension fund obligations that are not fully funded. The Pew Center on the States estimates that state pension plans as a whole are at least $1 Trillion short.
Michigan’s budget deficit will continue to grow if we don’t adopt a long-term, comprehensive budget solution that includes tax, budget, and fiscal reforms. If Michigan wants to be a competitive place to do business and retain, grow and create jobs, we must tackle these difficult issues sooner rather than later.