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Michigan budget shortfall not as bad as thought, but still in the billions

Posted at 7:17 AM, Aug 25, 2020
and last updated 2020-08-25 07:17:50-04

LANSING, Mich. (AP) — Michigan’s budget outlook is not as bad as was thought — thanks to federal pandemic relief aid, higher consumer spending and tax payments than expected, and a quicker recovery by the auto industry.

In May, Gov. Gretchen Whitmer’s administration and legislative economists projected a combined $6.3 billion shortfall in two main funds over two years.

In a meeting Monday, they revised that hole downward, to $3.4 billion.

That means the situation isn't as dire as previously thought, as the Democratic governor and Republican-led Legislature work to pass a budget.

The shortfall for the coming fiscal year is less than $1 billion.