LANSING – Rising Medicaid caseloads and continued difficulty in selling land once occupied by a state mental hospital have put the 2003-04 budget $161 million into deficit, lower than the $200 million to $250 million deficit that had been feared, the Michigan Senate Fiscal Agency reported.
Medicaid also is largely the reason the deficit for the 2004-05 budget that lawmakers are now writing has grown by $114 million. The report is one of three that will contribute to Tuesday’s revenue estimating conference, which will set the stage for another round of budget-cutting and kick off work on the 2005 budget in earnest.
The current year deficit consists of a $100.3 million hole in the general fund and a $60.6 million shortfall in the school aid fund. The shortfall for the 2004-05 year is largely in the general fund.
Although the current year deficit is unwelcome news, a $161 million shortfall is slightly below the $200-$250 million gap that had been feared.
Revenues for the general fund actually have come in a touch higher than predicted at the January conference with the shortfall in this sector primarily due to increasing demand for Medicaid. The shortfall in the school aid fund stems from lower than expected retail sales, which have hindered sales tax revenues.
The House Fiscal Agency is expected to release its estimate Monday. The Department of Treasury typically keeps its estimate under wraps until the conference.
This story came from content partner Gongwer News Service. To subscribe, click on Gongwer.Com
