LANSING ? Gov. Jennifer Granholm is projecting Michigan departmental budget cuts of between 5 and 7 percent for fiscal 2005-06 fiscal year.

But Michigan appears to have escaped a general fund deficit for the 2003-04 fiscal year by the skin of its teeth, forecasts by both the Senate Fiscal Agency and the House Fiscal Agency are projecting. But that good news is tempered by projections that revenues for the 2004-05 fiscal year will be well below the estimates used in May to craft the final budget.

The forecasts were prepared by the two agencies for Friday’s revenue estimating conference that will also include the Department of Treasury. Treasury typically does not release its forecast before the conference.

But a spokesperson for Treasury said their forecast would also show no deficit for the 2003-04 fiscal year.

The meeting on Friday will look only at the 2003-04 fiscal year that ended on September 30 and the current fiscal year. Estimates on the 2005-06 fiscal year will be made in January.

Earlier indications had been that the 2003-04 fiscal year could end up as much as $148 million in the red. Those concerns had prompted Senate Majority Leader Ken Sikkema (R-Wyoming) to call for the early revenue estimating meeting.

Sikkema’s spokesperson said Wednesday the decision to call for the early meeting was the right one, and that the real question remained not whether there are deficits, but why deficits might occur. The state continues to lose jobs, said Ari Adler, and the state must cut its spending.

While the state will not have a general fund deficit for the 2003-04 fiscal year, it won’t have much with which to throw a celebratory party. The SFA estimate puts the final balance for the general fund at $21.7 million However, the agency also forecast a ’03-’04 School Aid Fund deficit of $35.5 million.

And the HFA estimate puts the state at a zero balance for the fiscal year.

Jay Wortley, chief economist for the SFA, said tax revenues were quite weak for the state at the end of the fiscal year.

What saved the state, he said, was that non-tax revenues, such as fees and federal funds, came in far stronger than originally anticipated.

The SFA estimated total state revenues for 2003-04 at $18.52 billion, down $15 million from the May estimate, while the HFA also put the total at $18.52 billion, but said it would be $5.4 million below the earlier estimates.

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