Michigan gets more bad news on state budget

LANSING, MI – Michigan's budget outlook is getting worse by the month.

The Senate Fiscal Agency says the state collected $120 million less in tax revenues in the last two months than projected in May.

That means the budget deficit is getting bigger than economists thought. There are still three months left in the fiscal year.

The nonpartisan fiscal agency reported Monday the extra $120 million shortfall is spread fairly evenly between the general fund and school aid fund.

So far in the budget year that started last October, tax collections are down 13 percent, or $1.8 billion.

Gov. Jennifer Granholm and lawmakers have cut spending and filled much of this year's hole with federal stimulus money. They are facing a bigger shortfall in the next budget.