It came out yesterday that Michigan had a significant surplus in their budget. In fact, the number is quite astonishing – $687 Million. For a state that has endured tougher economic times than any other member of the Union, this is very welcome news. Critics seem to be pointing out the costs of creating this surplus rather than rejoicing in what could be an important forward step for the state’s economy. Of course the surplus came at a cost – money does not magically appear (unless that state put about a billion teeth under its pillow over the past year). However, some of those cuts can now be partially restored. Every agency will be clamoring for money now that they know there is some to spread around. The temptation must be resisted to give in to everyone though or Michigan will undoubtedly return to the days of red ink. Governor Rick Snyder (@onetoughnerd on Twitter) will need to make calculated decisions as to where the least amount of money can make the biggest impact.
He has already stated that he will put money towards a rainy fund – a move that has been met with some opposition. It makes sense to create this fund though considering that the budget of the City of Detroit is still in shambles and the State could be forced to enact multiple bailouts. While this would doubtless be unpopular in certain regions of the state, it is a move that would be warranted. Detroit (and the Metro area) remains the economic hub of Michigan through both industry and commerce. Detroit is lagging behind other areas of the state in recovery, and if it was to sputter backwards and start a negative slide it could potentially take the rest of Michigan with it (again). So, one use of this rainy day fund could be as sort of a Detroit Insurance Fund.
There are a lot of other scenarios that require the creation of such a fund though. Just think about your personal budget. While you may have cut back in some areas of your budget during tough times, when times got better did you restore all finding to the areas that got cut? Or did you decide that perhaps it made some sense to put away a stash of cash in case you had car trouble or need emergency house repair or a medical expense popped up unexpectedly. Wouldn’t it be better to pay for such things out of savings rather than go into debt (again) to pay off something like that? A similar case can be made for the Michigan’s Budget. It makes sense (and cents – haha) to have a bit of savings so you can be a bit prepared for the unexpected.
Michigan and her residents should be happy today. The ward work and sacrifices they have been making seem to be paying off. While the state is not in the clear yet, it is making big strides and showing America that Michigan is once again ready to lead.
- Sam the Eagle