LANSING – The dramatic effort to reach an agreement on increasing the U.S. debt ceiling will likely mean less in federal money for Michigan, Budget Director John Nixon said Monday.
But Nixon does not know yet how much money the agreement – which passed the U.S. House Monday night – will cost the state.
Whatever changes for the state in terms of its federal funding will likely occur in future federal budget bills. The federal fiscal year, like Michigan’s, begins October 1.
Nationwide, state budget officials and legislators raised worries about how much the agreement, which calls for overall federal budget cuts of more than $2 trillion during the next decade, could affect state budgets. Officials are particularly worried about programs such as Medicaid.
Nixon, who is also president of the National Association of State Budget Officers, said in a statement that Governor Rick Snyder and he were watching the developments of debt ceiling agreement carefully so that the state could adjust its fiscal requirements.
Approximately 44 percent of the state’s total $47 billion budget comes in federal funds, the largest single share of funding for the entire budget. Officials have said that amounts to some $400 million a week coming into the state from the federal government.
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