We'll examine the Michigan FY 2007 budget. Here is a pie chart showing Michigan's general budget spending in FY2007:
As you can see, the state's funding priorities have shifted considerably in just six short years. The top four programs for general fund-general purpose spending are, in order:
- Community Health- 32.4%
- Higher Education- 20.2%
- Corrections- 19.7%
- Human Services- 12.9%
How does the state generate its revenue?
Many will be surprised to find that the general fund only accounts for 23% of the state's portion of its budget. Much of the federal spending is Michigan run, federal mandates consisting of block grants or other tools of devolution. In short, although Michigan's budget is 42.8 billion dollars, much of it is not up for debate during the widely reported yearly budget discussions.
That is a general overview of the budget itself. In the coming days however, we'll dig deeper into each major section of the general fund, comparing Michigan's expeditures with two states: Nebraska and California. Nebraska is one of the few states to continue a budget surplus this fiscal year (link to my own article), and hopefully a comparison to that state will give some ideas to Michigan policymakers for future budget adjustments. Conversely, California has an astounding budget deficit, and recently ended a protracted budget struggle eerily similar to Michigan's 2007 adventure. By examining California's budget, we can see where bigger states might have even bigger problem's than Michigan's seemingly endless shortages.