Governor Unveils Budget: No Cuts for FY 2011 Revenue Sharing

This morning Governor Granholm presented her 2011 budget. She is proposing no more cuts to revenue sharing, or flat funding, for each unit based on 2010 levels. With a deficit of $1.7 billion, she is relying on more than $700 million in federal funds to help balance the budget and recommending a sales tax on services and lowering the total rate to 5.5 cents. In addition, she recommends the Michigan Business Tax surcharge be cut in half in 2011 and eliminated in 2012.

Transportation funding continues to be a critical issue. The Governor is assuming a loss of approximately half a billion dollars in federal transportation funding, and she recommends cutting the Department of Transportation budget accordingly. However, during the State of the State and budget presentation, she referenced the need for the legislature to pass the Transportation Funding Task Force recommendations, which includes a gas tax increase.

The last few years the budget process has come under fire politically as the government briefly shut down in 2007 and 2009. To help streamline the process, the Governor is asking for a two year budget cycle and also a requirement that the legislature complete the budget by July 1st each year. Now that the budget recommendations have been presented, the legislature will introduce bills and start holding hearings on the various department budgets.

For more information and to keep up with the budget as it goes through the process, visit our Inside 208 blog.

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Summer Minnick