State Budget Director Chris Kolb: Federal Government Needs to Step Up to the Plate

The State of Michigan is currently preparing for tightening the budget. Unlike the federal government, states can’t print money, and achieving a balanced budget will not be simple. Michigan State Budget Director Chris Kolb joined Detroit Regional Chamber President and CEO Sandy K. Baruah in today’s Tele-Town Hall to discuss the state’s fiscal outlook as phases of the economy begin to reopen amid the COVID-19 crisis.

Kolb explained that Michigan will soon undergo significant budget cuts and difficult fiscal years ahead. And 80% of the $10.6 billion General Fund appropriations are for health care, protecting vulnerable children and adults, public safety, and education.

“Where we’re being hit is [the] loss of income tax and sales tax,” said Kolb. This will hit schools and local governments hard and we need more help from the federal government, he added.

Already, Michigan has put budget savings measures in place. These include:

• Hiring freeze
• Discretionary spending freeze
• Two to three weeks of full-time temporary layoffs of nearly 3,000 state employees
• 10 temporary layoff days for 31,000 state employees participating in Federal workshare program

Michigan and other states have been requesting more flexibility of dollars from the federal government, said Kolb, specifically revenue backfill as an allowable use.

“The only way we’re going to make it through together is if the federal government frees up more resources,” said Kolb. “We cannot cut enough in state government to fill that kind of a hole.”

View materials from the presentation.