Over CRC’s 100 year history, it has made an outsized impact for such a small organization.  This is the third in a series of blog posts highlighting CRC’s top projects and reports since its inception in 1916.

Michigan’s Fiscal Future was the last in a series of analyses on Michigan’s chronic budget problem.  Beginning in 2001, CRC published a series of papers showing that a state budget deficit was inevitable and that by Fiscal Year 2003, the deficit would become difficult to manage.  As Michigan slipped into a recession from which it wouldn’t emerge for nearly a decade, CRC’s ominous warning became a reality.  The state began to use a strategy of one-time sources to maintain spending in the face of falling revenues, a strategy it maintained for five years.  By FY2008, the state had used an astonishing $8.1 billion in one-time resources to paper over the ongoing imbalance between revenues and expenditures.

During this time, Tom Clay, CRC’s director of state affairs, made over 400 presentations to interested groups in every corner of Michigan on this problem.

In 2008, in the depths of Michigan’s single state recession, Michigan’s Fiscal Future reviewed the recent history of the budget and presented an exhaustive review of future revenue and budgetary growth by each tax and spending program.  The report found that Michigan’s structural deficit had not been solved and that spending levels had been maintained at the cost of a seriously depleted financial condition.  The report projected revenues and spending pressure through FY2017 absent action to alter existing trends and concluded:

The state budget process contains nothing that forces consideration of the long-term consequences of current policies. As a consequence, policies are often adopted, which, although affordable at the time of adoption, may contain elements of growth that result in budgetary pressure in subsequent fiscal periods.

Michigan’s Fiscal Future was aimed at encouraging long-term financial thinking, difficult in an era of term limits. It won the 2008 Governmental Research Association award for Most Distinguished Research.

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