Although the national recession may be drawing to a close, it may leave a permanent mark on Michigan through its prized auto industry. Members of the Revenue Estimating Conference downgraded the budget to $1.7 billion for the fiscal year 2010. sending the Granholm administration scrambling for another 8% to cut off the budget. All this without factoring in the great uncertainty over the fate of Chrysler and GM. The former of which has already gone bankrupt and the later driving steadily toward the bankruptcy cliff.
With sales and unemployment becoming even more inversely proportional, the auto failure couldn't come at a worse time for the state of Michigan. According to State Treasurer Robert Kleine, general fund revenues have fallen a "staggering 21% for the year, compared to a typical 5% in past years.
Currently, the revenue committee has found a decrease of $3.3 billion in the general fund and School Aid Fund revenue combined. The only question to ask now Is what else could go wrong if the auto industry crashes and explodes causing unemployment to rise another 2.7% above the already dangerously high 12.6%.