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Michigan budget director John Nixon on how his state will be impacted if the U.S. goes over the fiscal cliff.
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And in just 95 days US is gonna fall right off the fiscal -- It is a trillion dollars in automatic spending cuts for the state of Michigan -- been up to a billion dollars in lost revenue.
But Michigan just went through a series that doesn't make sense but we'll go over that the second.
-- series of harsh cuts to end the decade long one point five billion dollar budget deficit -- state swallow a blow of this size joining me now is -- -- director John Nixon.
John thanks for joining us.
You -- you what a decade an entire decade.
-- you had a one point five billion dollar deficit in your stay in you actually recently made some pretty significant cuts to get your house back in order right.
Absolutely in fact we went through.
All the programs estate offers we realize we wanted to get the budget back and structural balance.
And it's not unlike -- all the other states went through over the last three to four -- So what is it gonna means you pay automatic sequestration goes into effect what's going to be your response.
Well I think certainly will look at programs look at -- areas that are being scaled back.
You know there's really two phase two the fiscal cliff that -- terming out -- one as a reduction of federal spending the other is the revenue side.
The impact of that the tax cuts and those types of things that we're actually more concerned about the impact of the revenue side what that might mean for the overall economy.
But we are watching each of these federal programs you know the main -- -- the uncertainties of the states are dealing with a feminine would we do our revenue projections.
Now certainly our biggest risk is the federal government.
Breaks -- Euro worried that you won't be getting money from the -- what would that mean how would you make that up would you immediately start cutting.
So that you're not spending money that you're not getting from the feds are or how would you respond.
Oh absolutely you know -- that it would that would federal government would look at those programs we start -- those programs back functional -- lot of debate on the programs are being cut back on.
People wanting to put state money into -- but certainly that's not on the top priority.
Congress is duty is to determine -- -- of this spending priorities.
The flow money to the states and certainly will stool skill those programs are based upon us.
Do you feel like this is really going to happen and as a result are you already planning Andy do you know exactly where you're gonna stop spending as a result.
Well you know a lot of the programs -- stated ministers are.
Exempt from the sequestration Medicaid that -- program for example food stamps a lot of those big programs are exempt from the sequestration.
Those other programs a workforce training dollar certainly -- were beginning to rebound those will be difficult to.
Administrate to scale back but certainly those areas are particular federal program so we'll have to look at.
And determinant how best to deal with them with a new level funding from the federal government so that's the plan that's where you would make the cut.
Yeah basically that it's gonna come through it's going to be pretty prescriptive the federal government -- -- where we cut the programs.
And then we'll certainly have to do that the bigger issue is what's gonna happen the overall economy what will that -- -- -- revenues.
Do you believe this is -- I mean we got to go but do you believe this is really gonna happen.
I think it needs to I mean certainly you're -- running trillion dollar deficits you know there's discussion of cutting -- 130 billion dollars.
Certainly the numbers don't quite add up to the federal a woman got to do something so.
Certainly if we can have some certainty and understand what's going to happen I think the states are good stewards and and -- react accordingly interesting RHI expects current.
Thank you must.
