The House Fiscal Agency announced this week that state revenues exceeded the forecasts from the May Revenue Estimating Conference by $285 million for the fiscal year that ended September 30. HFA said the General Fund was up $140 million, and the School Aid Fund was up $145 million. Meanwhile, The Senate Fiscal Agency, on the other hand, announced that state revenues exceeded forecasts by $431.2 million, with $158.3 million coming from the General Fund and $272.9 million coming from the School Aid Fund. The differences between the two agencies will be ironed out when the final numbers are determined in early November.
As good news as this is, now is not the time to simply go out and spend it.
We were fiscally responsible when finances were down, and we'll be fiscally responsible when they're up. This is one‐time funding. We remain committed to doing the right thing and using the funding where it will have the most effect in improving the lives of Michigan residents. Just like for Michigan families, being fiscally responsible means putting money away into savings, paying off long‐term debts and putting money toward priorities, such as getting dollars directly into the classroom.
This funding should be used to pay down the long‐term debts hanging over our children and grandchildren. We owe it to them to give them a brighter future and a state that is better off than when we inherited it. Paying down our debts allows us to make the most of the surprise funding while making no unsustainable commitments to future spending. This money is only temporary and making permanent spending decisions with it is asking for trouble.
We should not, however, simply pay out the funds to schools on a per pupil basis, for example. We can best help schools by helping them pay off the large retirement fund debt that is weighing them down. Doing so puts the impact of the spending squarely on the people who deserve it most ‐‐ Michigan's children. We are making an investment in our future and helping schools now. Any funding for schools must go directly into the classroom for the students. We will make smart, responsible decisions that put our state's future first.
Neither should we simply spend the money on other important programs. It is important that we continue to make sound decisions that move this state forward. Paying down our long‐term debts and preparing for future fiscal emergencies is the right choice. The decisions we made this spring improved Michigan's economic climate and stabilized the government after years of financial band‐aids and other reckless spending. We will continue to lead Michigan back to prosperity with responsible decision‐making and sound investments in our future.
Rebuilding the state's exhausted rainy day fund is also a responsible choice. Hard times are a fact of life in Michigan and in this economy, but we are not as prepared as we could be for the next downturn. Our state has seen many economic ups and downs, and none of us know for sure what next year will bring. Spending the money unwisely will only cause problems for the next generation of leaders in Michigan. Fitch Ratings specifically cited our commitment to keeping debts low and rebuilding our rainy day fund when they improved our credit rating outlook. These fiscally responsible actions have a direct effect on our improving economy.
Making the many cuts earlier this year was not easy, but it would not be wise to simply reverse those cuts now. We remain just as committed to reforming state government and spending practices now as we did when we finished the budget. We are doing the right thing for a long‐term success, not just balancing the budget this year or next. We will continue to emphasize fiscal responsibility by saving what money we can and paying down our debts, because our work is not yet finished and Michigan's future is not yet guaranteed.