Any budget has a great many moving pieces. As the governing body’s responsibilities and budgets grow, the complexity increases.
We could all stand to know much, much more about each of our state’s budgets. Our legislators rely on reports and analysis from the House and Senate Fiscal Agencies. I combed through a series of Senate Fiscal Agency reports and extracted the following, presented largely without commentary. I’d love to hear some of your reactions to this data and how you interpret it.
I found another data source that is more specific to education spending and I’ll blog on that later this week. But here’s some things that caught my attention.
- The total amount of the 2010-11 Michigan budget was $46.7 billion. It has grown 48% from 1997-8.
- Michigan has two major budget areas: The General Fund/General Purpose (GF) budget and the School Aid Fund (SAF). The state sourced (meaning not federally sourced) amount of the GF budget is about $8 billion whereas the SAF is over $10 billion. So K-12 education has long been the stat’e largest expenditure of local tax dollars. (Of note here, this probably was NOT the case pre-Proposal A when local districts were by far the greater source of funding. Hence why knowing the state budget is so important to understanding school funding.)
- Michigan relied in federal funds for $20.2 billion (or 43%) for the 2010-11 budget. In 1997, the federal portion of Michigan’s budget was 25%.
- The 2009-10 SAF budget had revenues of $10.8 billion. That’s lower than 2004-5 levels.
- Of note, however, is that over that time Michigan shed over 6% of its student population (1.73 million to 1.62 million). The number of teachers dropped by a greater proportion; 78k to 72k, a drop of almost 8%.
- If Governor Snyder succeeds in his budget proposal, the SAF budget will be lower than it was in 1999.
- The Detroit Consumer Price Index has increased 14.8% since 2002-3. Michigan’s personal income is up 12.1% in that time while total state sourced spending is up 0.1%.
- In that same time period, Corrections spending in Michigan has increased by $343 million, while education spending (K-12, Community Colleges and Higher Ed.) has decreased by $659 million.
- In Governor Snyder’s budget proposal Corrections spending increases slightly and Education spending is reduced by nearly $1 billion – incremental to the $659 above.
- From 1999-2009, despite significant job loss, average earnings for Michigan workers increased by over 2.5% annually; but was outpaced by the U.S. average of 3.5%.
- In about the same time period income per person in Michigan dropped sharply; dropping in rank from 18th to 37th, demonstrating the impact of job loss.
- Michigan’s General Fund Revenues in 2010, in inflation adjusted dollars, are about equal to late 1960’s levels.
- From 1999 to 2009, Michigan’s tax exemptions, credits, and deductions increased from $20 to $36 billion.
- Based on 2007 levels – and despite the reductions delivered by Proposal A, Michigan relies on Property Taxes for nearly 40% of all tax revenues. The national average is about 30%. However, in sales, income, business and other taxes Michigan is about equal to or lower than national averages.
- From 1999 to 2007, Michigan’s tax burden grew at the slowest rate in the nation as taxes per person ranking dropped from 7th to 28th.
- Michigan’s 2007 ranking in tax burden among all states were as follows (trend based on comparison to 1998-99 rank):
- State and Local – 20th, trending down
- State – 21st, trending down
- Sales Tax – 28th, trending down
- Individual Income Tax – 36th, trending down
- State and Local Property Tax – 7th, trending up
- Local Tax – 28th, trending up
- State and Local Corporate Income Tax – 39th, trending down (This ranking probably increased, meaning higher tax burden, since 2007, but Snyder’s proposal would significantly reduce it again.)
More to follow later this week. Please share your thoughts.