Livingston Today

While federal stimulus dollars will help shore up some of the revenue losses Michigan is facing due to the economic crisis created by COVID-19 restrictions, State Budget Director Chris Kolb warned that there may still have to be some belt-tightening in the next budget as Michigan faces approximately $4 billion in upcoming revenue shortfalls.

Kolb recently discussed the current state of Michigan’s finances on WJR's "The Paul W. Smith Show." He told Smith that the updated revenue picture, as it stands, is a significant improvement over what was being forecast in May.

The May forecast had Michigan coming up short in current-year revenue by approximately $3 billion, Smith said. Now that has been brought down to less than $1 billion.

Chris Kolb, State Budget Director | LinkedIn

"It’s still far worse than the January forecast,” Kolb told Smith. “We’re still looking at dramatic revenue losses in fiscal year '21 and '22, which are going to total nearly $4.2 billion.”

While revenue has risen for the state, that ultimately boils down to the federal government stepping in and propping up the state’s economy, Kolb explained.

"The unemployment checks, the stimulus checks, the business support, and support to state and local governments really helped us,” Kolb said on the radio program.

For the state government to be able to survive the ongoing crisis, additional federal aid will be needed, Kolb said. Without additional federal aid, the state will have to look at cutting existing essential services and programs.

While it’s important to acknowledge that the current numbers are certainly good news, it is just as important not to forget that there is a lot of work ahead to figure out the rest of the way out of the hole the state now sits in, Kolb said.

"Until COVID is defeated, I still think that there’s a lot of uncertainty out there, and revenues could be sort of a roller coaster,” Kolb told Smith.