Most of 2011 surplus already accounted for in 2012 budget

It was recently reported that the state “found” one billion dollars in extra money, leading many to believe that the state is now flush with money to spend.

Both notions are incorrect. We do not have a billion dollars lying around. The confusion with the number is that it combined projected increased revenue with year-end revenue that was already accounted for in our current budget.

The unexpected positive balances come from money that the state budgeted for but did not spend and projections of greater revenue from increased economic activity.

Both of these are positive results. More revenue due to a rebounding economy is excellent news that the steps we are taking to turn Michigan around are working. Economic and job growth are also key reasons for the state spending $200 million less than was budgeted. While some of these savings were achieved through frugal, dollar-wise decisions by the state, the reduction in the number of people needing state assistance as unemployment declined was a significant factor.

It is also important to point out that when we approved the 2012 budget earlier this year, we had anticipated much of the 2011 budget year surplus. To avoid having to cut money in the middle of the year as in past years, we were cautious in budgeting and looked ahead two years.

The result is that most of the reported surplus has already been accounted for in the current budget and planned for in the 2013 budget framework.  In fact, if we just keep the 2013 spending the same as 2012 spending we will have about a $350 million dollar shortfall.

If we continue enacting reforms to reduce the short- and long-term pressure on the state budget, spending taxpayer dollars as efficiently as possible and making further strides to improve Michigan’s economy and create jobs; we may achieve budget surpluses that will give us options. We are on the path to accomplishing that goal, but we aren’t there yet.

The most important factor to that equation is getting people back to work. More people working means less money the state needs to spend on assistance and more state revenues from sales and income taxes.

It was recently announced that Michigan’s unemployment rate is now below 10 percent for the first time in three years. It was good news, but more work must be done.

As your senator, I will continue to work hard to create jobs by making Michigan more business friendly. Those efforts include transforming your state government into one that we can afford and that doesn’t burden job providers and future generations with regulations and debt.

Darwin L. Booher
State Senator – 35th District
 

Senate approves foreclosure prevention bills

LANSING –-Legislation to help Michigan homeowners avoid foreclosure and crack down on mortgage modification scams was approved Wednesday by the state Senate, said Sen. Darwin Booher.

“Foreclosures have a huge negative impact on the family and the entire community – depressing home values, reducing funding for schools and local governments and driving away job providers,” said Booher, R-Evart. “By assisting homeowners to keep their homes and avoid foreclosure, this reform will help struggling families and our struggling economy.”

In the aftermath of the 2008 banking and housing crisis, many lenders were unwilling to help stressed homeowners modify their mortgages to avoid foreclosure. In 2009, Michigan responded by passing a 90-day mortgage foreclosure moratorium in which the homeowner could work with lenders or petition the courts to find a solution. That law expires on Jan. 5, 2012.

House Bills 4542-4544 would extend the moratorium until Dec. 31, 2012. The package also adds detailed timelines for borrowers and lenders in the negotiation process, includes criminal and financial penalties for home loan modification scam artists, eliminates the newspaper printing requirement of default notices and allows lenders to directly contact owners of default via first-class mail.

“The measures make the process more efficient and effective and crack down on scam artists who prey on hardworking families by promising to modify the mortgage for an upfront fee – and then do nothing,” said Booher, chair of the Senate Banking and Financial Institutions Committee. “I believe homeownership is a cornerstone of the American dream. And this reform is another step to help preserve that dream. It follows our actions earlier this year to criminalize and severely punish mortgage fraud.”

Signed in October, Public Acts 201-208 created the crime for mortgage fraud and made that crime a felony punishable by up to 20 years in prison and a $500,000 fine.

HBs 4542-4544 have been returned to the House to be enrolled and sent to the governor.