LANSING – Returning from the annual meeting of the National Association of State Budget Officers, Budget Director John Nixon said the state was in very good shape fiscally compared to other states, especially in light of the downgrade of the U.S. credit rating.
That downgrade will affect other states, including possibly Virginia and Maryland which have almost always had their own AAA ratings because of the presence of so many federal buildings and facilities, Nixon said through a spokesperson for the Department of Technology, Management and Budget.
In the current U.S. fiscal climate, Kurt Weiss quoted Nixon as saying, “We can control the surfboard, but we can’t control the wave.” That meant the state can do what it has to fix and control its fiscal circumstances, but it cannot stop whatever effect federal issues may have on its finances.
NASBO’s annual meeting just ended in Utah, and Nixon described it as a somber meeting, even considering annual meetings of fiscal officials rarely are raucous affairs.
Michigan has taken difficult steps to gets in financial status in better order, which has drawn some attention from the rating houses, Weiss quoted Nixon as saying.
Despite that, the state still has to prepare from some fallout from the downgrading, Nixon said, though Weiss said there has been no indication at this point of what that effect might be.
But at the meeting, it was clear that some states corrected current budget problems with one-time fixes. So those states still have ongoing problems to resolve and now will have to handle those with the additional overhanging problem of the downgrade on top of their problems, Weiss said.
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