The debate over the budget has reached a fevor pitch recently, with lawmakers proposing different methods of covering the 2.8 billion dollar budget deficit. However, there is one thing the House, Senate, and Governor all agree on- the use of ARRA federal stimulus money to patch up some of the hole. Originally, state lawmakers declared their desire to use stimulus money for job creating projects, not to fill short-term holes. However, the magnitude of the economic crisis has forced the state to divert more funding than orginally desired towards balancing Michigan's budget. How will this decision affect next year's budget talks?.
The American Recovery and Reinvestment Act was passed by the federal government with the intention of providing money to states for job-creation purposes. Still, the latitude given to states in how they use that money means that states, like Michigan, who want to use the money to balance their budgets can find creative ways to do so. However, this could come back to haunt the state during the 2010-2011 budget debate. Although the money will temporarily reduce the number of cuts or tax increases necessary, it is only a one time payment. Since the economic situation is not expected to dramatically rebound within the next year, the following year could see a similar budget debate, this time without 1+ billion dollars in federal money available to help. Although lawmakers seem serious about making permanent budget cuts this time around, some of the painful decisions avoided by using the stimulus money this year may simply be pushed off to the next. Michigan residents hoping this is the last year of protracted, bitter deficit debates may not get their wish come 2010-2011.