Lansing Sun

Michigan needs to prepare for the day when federal COVID-19- funding runs out, said Rep. Sarah Lightner (R-Springport).

“The federal COVID-19 relief package helps us wrap up the current budget year with money on the balance sheet and helps in the new budget year that begins in October -- but it is not a permanent or sustainable solution,” Lightner said, according to Michigan House Republicans. “We must prepare now for when the federal funding inevitably ends."

The budget looks good in the short term because of the infusion of federal aid, said Lightner, a member of the House Appropriations Committee.

Rep. Sarah Lightner | Michigan House Republicans

“Federal assistance has propped up revenues, including sales, use and income taxes,” she told Michigan House Republicans. “The state, Michigan’s local governments, residents and job providers have received billions of dollars overall in federal COVID-19 relief funds -- including stimulus checks, paycheck protection programs, unemployment benefit boosts, assistance for governments and other programs.”

She advocates cutting state spending and working to create a more efficient state government without hurting essential services.

“We should reinvest in the state’s rainy day fund and look for savings wherever we can do so responsibly,” Lightner said, according to Michigan House Republicans. “Taking steps like these will help lessen the severity of budget cuts that may be needed when the benefits of federal assistance run out.”

By some estimates, the state could have a $1 billion shortfall in Fiscal Year 2022 after federal assistance ends.

In the short term, Michigan state revenues have been better than expected, in part because residents spent their federal stimulus checks faster than predicted, State Treasurer Rachael Eubanks said, according to MLive.

Since people could not go to movies, concerts and sporting events, they spent their stimulus checks on bigger-ticket items, such as  home improvements, computers and cars, MLive says.

The state also received significant tax revenues from federal unemployment benefits, according to Eubanks.