How will COVID-19 affect Michigan’s budget?

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GRAND RAPIDS, Mich. (WOOD) — The toll that the COVID-19 pandemic is taking on the country is evident in so many ways that are easy to see. 

But one of the longer-lasting impacts may be less obvious, as the crisis could have a big impact on Michigan’s budget in the coming year. In fact, it almost certainly will mean less revenue.

But how much less?

That will depend on how long the virus continues to spread, but even a week and a half ago when businesses began to close and people found themselves out of work, Michigan Senate Majority Floor Leader Sen. Peter MacGregor talked about the impact.

“Sales tax is going to be down, obviously, look at the gas,” he said. “A lot of sales tax comes off the fuel that we purchase and fuel is at the lowest point it’s been since 2006.”

“I thought last year’s budget cycle was a little difficult with trying to negotiate with the governor, we’re not going to have any problem negotiating with the executive branch, the governor at all or any of the directors of this budget, that’s going to be the easy part,” MacGregor added. “The hard part is: (what) are we going to do those dollars that do come in? Because it’s going to be a lot smaller than what we anticipated in January.”   

Not only will revenues be less overall, but delays in tax filing prompted by the outbreak means the stream of money coming in will not make it to the treasury as quickly as normal.

The deadline for the Michigan legislature to have a new budget to Gov. Whitmer is July 1, 2020.

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