Potential tax breaks and additional funding for needed services may be in the future for Michigan in the upcoming fiscal year, as lawmakers project a $971 million surplus in state revenue.

Fiscal leaders from the Senate, House and executive branch, as well as economists from across the state, met at the January Revenue Estimating Conference on Friday to predict the amount of available revenue for the next fiscal year.

Of the projected figure, $325 million will be put toward the long-term budget and $646 million will be used for one-time appropriations, the Detroit Free Press reported.

Daniil Manaenkov and George Fulton, both professors of economics, cited a rise in vehicle sales and a rebound of the housing market as possible causes of the surplus. Fulton predicts an increase in Michigan’s purchasing power and a gain of about 64,000 jobs a year over the next three years.

Gov. Rick Snyder is projected to use funds to restore long-neglected services while promoting financial stability within state finances.

Snyder’s administration inherited a $1.5 billion deficit at the start of his term in 2011. At the time, the governor called for a plan to “reinvent” the Michigan economy and end its deficits by cutting back spending and broadening tax bases.

Since the start of Snyder’s term, Michigan jobs, income, tax revenue and overall population have all increased significantly. However, critics of his policies, most notably State Senate Minority Leader Gretchen Whitmer, blame the governor for unfairly putting the tax burden on the working class, the elderly and students. Snyder also came under fire for his decision to slash funding to state colleges and universities by 15 percent in the past year.

Dave Murray, deputy press secretary to the governor, said though the process of budget allocation was still in its early stages, the governor plans to act strategically to make sure he uses the surplus in a fiscally responsible way to prevent further deficit.

“We don’t want to find ourselves in a situation where we were a couple years ago when we were looking at deficits – substantial deficits,” said Murray. “You need to be fiscally responsible with the money too.”

Senate Appropriations Chair Roger Kahn said, in a press release despite the surplus, the budget should still be approached responsibly.

State House Republicans are pressing for tax reliefs for the citizens who made the surplus possible in the first place. John Nixon, Director of the Department of Technology, Management and Budget, has argued that offering taxpayers a rebate makes the most sense when discussing how to allocate funds.

Anna Heaton, spokeswoman for House Appropriations Committee Chair Joe Haveman, said the House feels equally as cautious as the Senate when acting with the surplus. She said Haveman believes that the allocation process is still in its early stages and lawmakers are still deciding their next steps.

“Once there is a surplus, everyone starts saying we should spend, spend, spend,” Heaton said. “He is just saying, ‘Yes we should but let’s move slowly and think about this and think about where we can invest it and will get most return to Michigan citizens.’”

Heaton added that Haveman suggested using the money to fund improvements on roads and bridges and introduce tax cuts.

According to Heaton, after the governor makes his formal budget recommendation on Feb. 6, a meeting between the House and Senate budget appropriation committees will draw up a formal plan. She predicts the budget will be finalized before June 1, 2014.

Though these next few months will be crucial for Michigan taxpayers, the surplus still comes as a hopeful sign of change to the state that faced great setbacks over the past few years.

“Michigan’s improvement is a reflection of the sound fiscal policies of the administration,” Murray said. “It works. Michigan is a comeback state. This surplus is a reflection of that.”

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