Governor Granholm's FY 2010-11 BudgetOverview of Recommendations
The Governor's FY 2010-11 budget recommendation can be bestcharacterized as a budget that is balanced through a combination of revenue and fee increases, the appropriation of one-time Federal funds, andappropriation reductions. The combination of these three factors leads to abalance between revenue and appropriations in the General Fund/ GeneralPurpose (GF/GP) and School Aid Fund (SAF) budgets.The Governor's FY 2010-11 budget recommendation is based on theconsensus revenue estimates agreed to on January 11, 2010. The FY2010-11 GF/GP consensus revenue estimate is $7.0 billion. Thisrepresents a 1.0% increase from the FY 2009-10 consensus revenueestimate. The FY 2010-11 SAF consensus revenue estimate is $10.5billion. This represents a 0.5% increase from the FY 2009-10 consensusrevenue estimate.The Governor's budget includes additional State revenue from a major taxproposal. The proposal which involves an expansion in the base of theState sales tax, a reduction in the rate of the State sales tax and reductionsin the Michigan business tax, provides for $554.3 million of increasedrevenue in FY 2010-11. Under the Governor's budget, this increasedrevenue is earmarked to the SAF budget. The Governor's budgetrecommendation also includes $8.6 million of revenue from proposed feeincreases.A key assumption in the Governor's FY 2010-11 budget recommendationinvolves two major assumptions concerning Federal funds. The budgetassumes that Michigan will receive $514.0 million of additional Federalfunds related to a six-month extension of the enhanced Federal Medicaidmatch rate included in the American Recovery and Reinvestment Act of 2009 (ARRA). This ARRA fund source will otherwise expire on January 1,2011. The Governor's budget assumes that the United States Congresswill pass and the President will sign into law an extension of theseenhanced Medicaid benefits for the period January 1, 2011 through June30, 2011. The budget also assumes that Michigan will be unable to match$475.0 million of available Federal transportation funding due to aninadequate level of State matching funds.