2013 State of the State of Michigan by State Budget Director

7/30/2019 2013 State of the State of Michigan by State Budget Director

1/35

Moving Michigan Forward:

Continuing Our Comeback

Presented

John E. Nixon, C

State Budget Director, Michig

Michigan Association of CP

May 7, 20


2/35

Where We Started Perpetual $1.5B deficit

Uncapped liabilities

Job-killing tax system

$2M in savings account

depleted rainy day fund

Several accounting gimmicks


3/35

What Weve Done Overcame perpetual $1.5B deficit

Started accounting for one-time versus ongoing money

Implemented multi-year budgeting

Addressed long-term liabilities

Eliminated job-killing tax system

Invested in rainy day fund

Linked policy decisions to funding (capital outlay reform)

School bond loan fund reforms

Retirement reforms

Michigan Public School Employees Retirement System

Michigan State Employee Retirement System


4/35

Accomplishments

Year 3: Looking forward

Maintain structural balance

Protect education and stabilize

state agency budgets

Invest in critical infrastructure,

economic development and

public safety needs Meet the needs of the most

vulnerable among us by investing

in important safety net programs

Save for the future


5/35

Growing more jobs

Personal income is increasing

Home sales and prices are

increasing

Our population is growing again

Turning the Corner


6/35

Michigans Economic Turnaround GDP growth 6th best in nation in 2011; ranked 50th in 2008 and 2009

2012 was second consecutive year of job expansion after 10 straightyears of declines

Payroll employment growth rate was 5th strongest among the states in2011; 46th in 2009

Per capita income growth 7th best in nation in 2011; ranked 42nd in 20

Housing starts increased 22 percent in 2012 and were up 66 percentfrom the 2009 level

State motor vehicle production increased 17 percent in 2012; productwas almost double 2009 production

The state is much stronger than it was in last decade


7/35

Michigans Employment

Expected to Increase in 2013 - 2015

Michigan Wage and Salary Employment Year-Over-Year Change

(In Thousands)Note: U.S. Bureau of Labor Statistics. 2012-2015 estimates are 1/11/13 Consensus Forecast. 1/25/13.

-112.7

-76.8 -71.1

-16.9 -9.3

-63.3 -58.7

-105.6

-291.6

-7.2

72.351.0

36.048.0 53.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Consensus Forecast


8/35

Michigans Unemployment RateImproving Faster than the U.S. Rate

Source: U.S. Bureau of Labor Statistics. 2013-2015, 1/11/13 Consensus Forecast. 1/25/13.

0%

3%

6%

9%

12%

15%

2001 2005 2009 2013

2015

United States

7.1%

2015

Michigan 7.6%

Consensus Forecast


9/35

Michigan Personal Income

Continuing Growth in 2013 - 2015

Michigan Personal Income Year-Over-Year Change

Note: U.S. Bureau of Economic Analysis. 2012-2015 estimates are 1/11/13 Consensus Forecast. 1/25/13.

2.5%

1.0%

3.7%

1.6%2.0%

2.8% 2.8%2.0%

-6.3%

3.1%

5.6%

3.4%2.6%

4.3% 4.4%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Consensus Forecast


10/35

Sources: U.S. Bureau of the Census & Treasury Forecast. 1/11/13.

Michigan Housing Starts

Are Rebounding

0

10,000

20,000

30,000

40,000

50,000

60,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Treasury Forecast


11/35

Fitch said the upgrade reflects the states solid economic and

fiscal recovery over the last two years.

Fitch Ratings upgradedMichigans

general obligation credit rating to AA

Standard and Poors upgraded

Michigans credit outlook to

positive

Moodys upgraded Michigans bond

rating from stable to positive

April 2, 2013:

People Are Taking Note


12/35

Total FY 2014 Budget

Recommendation

Budget

Stabilization/Health Savings

Fund

$178 Million

Jobs

$6.1 BillionEducation

$15.3 Billion

Government

Services

$2.7 Billion

Environment

$922 Million

Public Safety

$3.1 Billion

Health andHuman Services

$22.6 Billion

Total Gross: $50.9 Billion


13/35

Total New GF/SAF Investments

n FY 2014 BudgetBudget Stabilization/

Health Savings Fund

$178M

30%

Jobs

$84.5M

14%

Education

$187.7M

31%

Government Services

$51.4M

9%

Environment

$14.9M

2%

Public Safety

$52.6M

9%

Health and Human

Services

$27M

5%

Total: $596.1 Million


14/35

Budgeting Responsibly Invest and save wisely

Live within our means

Prioritize to make a difference

Ask for, measure and reward real results

Invest and save

Short term and urgent

Long term and important

Paying and lowering our bills

Retirement

Michigan Public School Employees Retirement System

Michigan State Employee Retirement System

Updating old, outdated and worn assets


15/35

Investing in the Future Infrastructure

Education

Medicaid expansion

Health improvements

Jobs

People

Public safety

Quality of life


16/35

Driving the Economy Forward Invest $1.2B more per year in our road infrastructure

Four layers to a common-sense outcome

Make regular payments to avoid huge bill

Save on vehicle repair costs

Grow the economy by creating jobs Save nearly 100 lives per year

Roads, bridges, public transit, rail, harbors


17/35

urce: OEI, RMF 07/27/12

Investing in Our Roads

$25

Gap


18/35

Creating a P-20 Educational System More seamless system

Student growth

Careers or self-enrichment

Three tiers

Early childhood

K-12

Higher education

Total $15B investment ($13.1B from state)


19/35

Early Childhood Major New Investment $130M investment over the next two years

More than double the 2011 investment

2014 investment - $65M total

Creating 16,000 new placements

Increased funding per slot from $3,400 to $3,625

2015 investment adding $65M more

Creating an additional 18,000 placements

Value added to all


20/35

nvesting in Our Children Early

28,100Placements

28,900Placements

30,700Placements

32,100

Placements

48,100

Placements

66,000

Placements

$0

$50,000

$100,000

$150,000

$200,000

$250,000

FY10 FY11 FY12 FY13 FY14 Rec FY15 Rec

Approp

riations

(inthousands)

Preschool Funding Will Double by FY 2015with $130M Investment over Two Years

Reflects State Appropriations and Number of Half-Day Preschool Placements

$95.7 M$98.3 M

$104.3 M $109.3 M

$174.3 M

$239.3 M


21/35

K-12: Continuing Focus on Student Growth $13.2B for K-12, including $11.5B of state funds, an

increase of $227M

Includes an equity payment to further close the foundation

allowance funding gap ($24M to raise the lowest funded

districts to $7,000 per pupil)

Continues performance and best practices funding, as well

as technology grants

Supports online courses


22/35

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Michigan Public

School Employees'

Retirement SystemBest Practices/

Performance Funding

All Other Categorical

Funding

Special Education

Basic Operations

NOTE: Does not includ

federal funding, adult

education funding,

preschool funding, or

deposits made into the

MPSERS reserve fund

$7,357$6,971

$7,208$6,818$6,622

K-12 Per-pupil School Aid

Appropriations - FY 2010 to FY 2014


23/35

Retirement Reforms Long-term results: savings of$2,200 per resident and more

than $10,000 per student

$46.7 B

$31.1 B

-

0

0

0

0

0

Before Reform After Reform

$inBillions

Total Estimated Liabilities for MPSERSBoth Pension and Healthcare

$18.8 B$13.1 B

$-

$10

$20

$30

$40

$50

Before Reform After Reform

$inBillions

Total Estimated Liabilities for SERSBoth Pension and Healthcare


24/35

Savings from reformequal $482M or $3

per K-12 student in

FY14

FY14 funding

recommendation is

increase of$436M

$250 per K-12 stud

These two actions

translate into $918

or $565 per studen

FY14


25/35

Higher Education Total funding of $1.4B for universities, a $31.4M increase

An increase of $24.9M for performance formula funding

$1.1M increase for MSUs Ag Bio Research and Extension

Total funding of nearly $336M for community colleges

$5.8M increase for performance formula funding

$31.4M for retirement costs

$1.1M for the Virtual Learning Collaborative

Capital investment challenges for FY 2015


26/35

Expanding Medicaid

Work toward better care at lower cost to society

Critical issue is having patient-centered medical

home vs. more ER visits

Simpler and better for families, providers and

small business

Reserve one-half of short-term savings to coverfuture costs and reduce federal risks


27/35

Cumulative Deposits into the Health

Savings Fund Will Finance Medicaid

Expansion for the Next 21 Years

-$100

$0

$100

$200

$300

$400

$500

$600

$700

FY

2014

FY

2016

FY

2018

FY

2020

FY

2022

FY

2024

FY

2026

FY

2028

FY

2030

FY

2032

FY

2034

Cumulative Deposit into HSF General fund cost

*in millions


28/35

$11.6M to

expand Healthy

Kids Dental to

reach 70,500

more children Additional

100,000

children in

FY 2015

Making Dental Health a Priority

$-

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14

Exec

Rec

F

E

Healthy Kids Dental Program Has Increased Access to

Dental Care for Michigan Children

285,000 kids

186,000 kids

117,000 kids

59 counties37 counties 61 counties

440,000 kids

336,000 kids

510,000 kids

610,0

65

counties

75

counties

78

counties

co

*Inmillions


29/35

Improved Services to People Paving the path to independence

$6.2M to continue and expand

Pathways to Potential

Currently in 124 public schools

Detroit Flint

Pontiac

Saginaw


30/35

Honoring Our Veterans

$8.6M for a new innovative Veterans Service Delivery Initiativ

Create a new agency to focus directly on veterans service

600,000 to add an additional five qualified service officers to

connect veterans with services


31/35

Making Michigan Safer

Increase strength of Michigan State Police ranks

Trained 78 troopers in FY 2012

Anticipate training 152 troopers during FY 2013

$15.2M to train 107 troopers in FY 2014

$2M for mental health courts

$3M for treatment courts

$9.5M for blight elimination and $4M for Good Neighbor

property maintenance


32/35

Long-term Savings

One-time surplus funds

Important for Michigans ratings

Rainy Day Fund

Michigan Health Savings Fund

Disaster and Emergency Contingency Fund


33/35

$1,264.4

$994.2

$145.2

$0.0

$81.3

$2.0 $2.0 $2.1 $2.2 $2.2 $2.2 $2.2

$365.1

$505.1

$580.1

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Projected

2014

Projected

Millions

Fiscal Year

The Budget Stabilization Fund (BSF) peaked at $1.3 billion in FY 2000 but was quickly

depleted. Michigan has started to rebuild the BSF balance in FY 2012 and projects that thebalance will be approximately $580 million by the end of FY 2014.

History of the BSF


34/35

Thank you.

Questions?


35/35

John E. Nixon, CPAState Budget DirectorDirector, Michigan Department of Technology, Management and Budget

John Nixon serves as the State Budget Director and Director of the Michigan Department of

Technology, Management and Budget (DTMB). Reporting directly to Governor Snyder, he is

responsible for overseeing the state budget, government technology, and the administrative

functions of state government.

Nixon heads an agency of 2,700 employees, leading the departments mission of providing vital

administrative and technology services to enable Michigans reinvention, with the vision of

making the State of Michigan one of the most innovative and responsive governments in the

world.

Nixon is a Certified Public Accountant, having previously served as Utahs budget director forGovernors Jon Huntsman and Gary Herbert. He was named Public Official of the Year by

Governing Magazine in 2012. He was also one ofGovernment Technology Magazines Top 25

Doers, Dreamers and Drivers in 2012. He served as President of the National Association of

State Budget Officers (NASBO) in 2010.

Nixon holds a BS degree in Corporate Finance from Brigham Young University and an MBA with

an emphasis in Information Technology from the University of Utah, where he graduated as a

member of the Phi Kappa Phi and Beta Sigma Honors Societies.

Nixon and his wife DeAnn have six children, three boys and three girls.

Date post:	14-Apr-2018
Category:	Documents
Upload:	james-campbell
View:	216 times
Download:	0 times

2013 State of the State of Michigan by State Budget Director

Documents