Michigan facing budget problems because of lower tax revenues

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By Tiffany Griffin

Story Created: May 14, 2008 at 10:01 AM EST

Story Updated: May 14, 2008 at 6:30 PM EST

LANSING, Mich. (AP) — Fiscal experts say Michigan could face a $300 million deficit in the next budget year.

The financial trouble is here despite last year's increases in the state's personal income and business taxes to balance a budget deficit. Reasons for the projected shortfall include the national economic slowdown's effect on Michigan's economy and the expected cost of new subsidies to entice the film industry to make movies in the state.

Fiscal experts and Governor Jennifer Granholm's administration will meet Friday to agree on how much tax revenue state government can expect to collect this year and next.

A top Senate fiscal expert told lawmakers Wednesday that the state should be OK this fiscal year. But problems loom in the fiscal year that starts in October.

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