LANSING – While General Motor’s warning that it would file for bankruptcy before June 1 if the U.S. government does not find its restructuring plan sufficient was one more reminder of the deadly serious stakes the state is playing for, officials have been working on a potential forecast on what the state’s fiscal situation would look like if the auto giant does file for bankruptcy. The short answer, according to some officials, is “from bad to worse.”
At a minimum, the $785 million shortfall in the current 2008-09 budget would become larger, but how much larger is a question.
Officials from the House and Senate Fiscal Agencies, along with the Department of Treasury, have been working on the forecast for if GM and Chrysler Corporation (which has until Thursday to meet a deadline on restructuring) declare bankruptcy, but so far have not released any details of their findings.
The details of the findings will be released at the Revenue Estimating Conference, scheduled for 9 a.m., Friday, May 15.
Clearly, officials said, a bankruptcy and the anticipated jobs losses would mean the $785 million shortfall would get worse. But there are a number of unknown factors attached to potential bankruptcy that could affect the state’s overall revenue picture, including how retirees for the two companies are affected.
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