LANSING – State government has built up enough cash reserves over the last decade to get Michigan through the COVID-19 pandemic-caused recession as long as policymakers respond responsibly to the economic downturn, according to a Citizens Research Council report.
Some banana peels state leaders will want to avoid include draining the remaining $800 million from the Rainy Day Fund. CRC sees that as weakening the state’s cash position over the long term.
“Additionally, policymakers must tread carefully to not balance the state budget using one-time gimmicks as they did in the early 2000s,” the report states. “Those decisions directly led to the state’s cash position crisis in 2007; current leaders should use that as a lesson when determining how to resolve today’s budget imbalance.”
The report was issued ahead of the Aug. 24 Consensus Revenue Estimating Conference, which will determine the revenue outlook for Fiscal Year (FY) 2020 and 2021.