county of ottawa · 2011. 1. 18. · county of ottawa administrator’s office alan g. vanderberg...
TRANSCRIPT
County of Ottawa Administrator’s Office
Alan G. VanderbergCounty Administrator
12220 Fillmore Street, Room 331, West Olive, Michigan 49460 (616) 738-4068 e-mail: [email protected]
County Administrator’s Weekly Digest
January 14, 2011
STATE REVENUE ESTIMATING CONFERENCE TODAY (GCSI) The Consensus Revenue Estimating Conference has adjourned. Attached please find a copy of the signed consensus agreement. The House and Senate Fiscal Agencies, in conjunction with the Michigan Department of Treasury, using the estimates forwarded to you earlier today, have agreed to the following estimates of state General Fund/General Purpose and School Aid revenues: FY 2010 – Preliminary Final General Fund/General Purpose: $6.79 Billion School Aid Fund: $10.82 Billion Combined: $17.6 Billion FY 2011 – Jan. 2011 Consensus General Fund/General Purpose: $7.23 Billion School Aid Fund: $10.98 Billion Combined: $18.21 Billion FY 2012 – Jan. 2011 Consensus General Fund/General Purpose: $7.29 Billion School Aid Fund: $11.19 Billion Combined: $18.49 Billion In accordance with state law, a second Consensus Revenue Estimating Conference will occur in May 2011 to review, and if necessary revise, the numbers agreed to at today's conference.
OTTAWA COUNTY DISTRICT COURT DESIGNATED DWI ACADEMY COURT (Jodi Salacina) The Ottawa County 58th District Court Sobriety Treatment Program recently went through a rigorous evaluation process competing against other DWI (Driving While Intoxicated) Courts. The 58th District Court just learned they have been selected to be one of the four DWI Academy Courts in the United States for the next three years.
Ottawa County 58th District Court has two Sobriety Treatment Courts in Holland. Judge Knoll and Judge Jonas each oversee a docket of mostly DWI 2nd offenders. A Sobriety Treatment Court is an accountability court dedicated to changing the behavior of the repeat offenders arrested for DWI. The goal of DWI Court is to protect public safety by using a national evidence based model. The model uses accountability and long-term treatment to address the root cause of impaired driving: alcohol and other substance abuse.
In 2008, the National Association of Drug Court Professionals, NADCP, in partnership with the National Highway Traffic Safety Administration, NHTSA, created four DWI Academy Courts. These
courts located across the country are recognized by NADCP as DWI Courts that use exemplary practices and will:
� Serve as role models for other DWI Courts; � Be used to create learning and training for newly created DWI Courts; � Provide ongoing mentoring with DWI Courts in their region; and � Be a research platform for the development, identification, and testing of improved
DWI Court practices. The National Center for DWI Courts will host training programs in Holland for courts that want to become a DWI Court. These training programs are team oriented and will bring judges, prosecutors, defense counsel, treatment representatives, drug court coordinators, experts in research and evaluation, probation, and law enforcement officials to Holland. MI HOUSE OF REPRESENTATIVES COMMITTEES The Michigan House of Representatives have completed committee assignments and they are included as two attached files to the Digest email message. OTTAWA MI WORKS RECOGNIZED FOR ECONOMIC DEVELOPMENT AND SHARE NETWORK PARTNERSHIPS (Bill Raymond) Ottawa County Michigan Works recently underwent a comprehensive review from the US Department of Labor and received some positive recognition regarding two of our initiatives. One was for our relationship with area economic development organizations and the other was for our “Share Network” sites throughout the county. For more information on the Share Network see www.miottawa.org/ Comments from the report are listed below: Positive Practice: Demonstrated Leadership and Collaboration in Regional Economic Development “The reviewers commend Ottawa County Michigan Works! for its efforts to drive economic and workforce development in the region by applying advanced data analysis to its own service design and making that information available to strategic partners across the area. Ottawa County has recently purchased software as well as hired a workforce intelligence analyst to enhance its ability to collect, analyze and apply information related to high growth industries, and the transferable skills and education they require, to service delivery. In addition, Ottawa County is sharing both the tool and the analyst's expertise with four regional economic development agencies as well as making it available to other Michigan Works! agencies in the region to help support collaborative strategic planning and implementation in the West Michigan region”. Positive Practice: Access points for Workforce Investment Act services throughout Ottawa County “While the single-county MWA 18 can in no way be considered "sprawling," the local area still faces challenges in providing needed services to eligible adults and youth residing throughout Ottawa County. Much of the county, especially the eastern portion, is rural. Public transportation is not available in all parts of the county. Ottawa County has two new, well-equipped One Stop Centers in Holland and Grand Haven, the two largest metropolitan areas in the county. The Centers offers a full array of services. In addition to these offices, Ottawa County's outreach and recruitment strategy is enhanced through its operation of 11 “Share Network” Access Points throughout the county. These are additional satellite offices that are located within faith-based and non-profit organization facilities, and provide basic employment-related services through trained volunteers. These Access Points allow eligible youth and adults to take advantage of some Workforce Investment Act services without initially having to secure transportation to either Holland or Grand Haven”.
Ottawa County Michigan Works (OCMWA) goal is to continually improve our services, work closely with partners in economic development, education, business and faith based and community based non-profit organizations. We endeavor to “help other organizations succeed”, especially in this time of economic uncertainty and challenges. The recognition above really reflects the work and vision of the Workforce Development Board, which has identified collaboration with economic development and education as a strong component of our strategic plan. In addition, that vision has been put into practice by the dedicated staff at OCMWA, especially Angie Barksdale, Joel Westmaas and Rachel Cleveland with the regional economic development collaboration and Bill MacDhubhain with the “Share Network”. CONSENSUS REVENUE ESTIMATING CONFERENCE CONFIRMS STATE REVENUE/ECONOMIC PICTURE (MAC) The State Treasurer and Directors of the House and Senate Fiscal Agencies met today to confirm estimated revenue numbers for the state. While it appears the economy finally bottomed out during the last quarter of 2010 and state revenues will be slightly higher over the next two years, the state is far from out-of-the-woods, this is due to an ongoing structural deficit that relied on federal stimulus revenue to keep it afloat. It appears that despite a slight increase in revenue of $131 million in fiscal year 2011 and an increase of $66 million in fiscal year 2012, the state legislature will still deal with a hole approaching $1.8 billion as it grapples with budgeting for fiscal year 2012. The difference is due to federal stimulus dollars that are no longer available and continuously rising caseloads. Unemployment is forecast to continue to decline slowly during the next two years to about 11.4% as Michigan adds jobs for the first time in several years. About 74,000 jobs are expected to be created overall during the next two years, after losing 425,900 jobs during the previous three years. Slow, modest recovery was the overall message today. The Governor and legislative Republicans plan to issue a two-year budget covering fiscal year 2012 and 2013 at the same time. The legislature's job of balancing the state budget hole of $1.8 billion lies ahead, and MAC will need your voice as we enter the most challenging year of the last decade. If your legislators have not heard from you on what revenue sharing and unfunded mandates mean to your county, please educate them today! WALK FOR WARMTH PRESS RELEASE (Bill Raymond January 11, 2011 FOR IMMEDIATE RELEASE Contact: Lindsey Hanson, Art Instructor, Coopersville High School, (616) 997-3500, [email protected] Lorma Freestone, Executive Director, Holland Area Arts Council, (616) 396-3278, [email protected] Mike Stock, Marketing Specialist, Ottawa County Community Action Agency, (616) 494-3403, [email protected] Photo captions: 1. Lindsey Hanson, Art Instructor and Erica Pizarro with the winning design. 2. First, second and third place winners, Erica Pizarro, Maria Vanderjagt and Scott Scholten. 3. Lindsey Hanson, Art Instructor, Kristen Nossen, Student, Erica Pizarro, design winner, Maria Vanderjagt, second place, Scott Scholten, third place, Donna St. John, Art Instructor. Warm Colors Promote Hot Event The annual Walk For Warmth will have a single poster design promoting the event this year. The Holland Area Arts Council juried the third Walk For Warmth poster contest and is pleased to announce the winning design. The award for First Place Design goes to Coopersville High School student, Erica Pizarro. Erica's design will go to press and be distributed throughout Ottawa County to promote the upcoming event, Walk For Warmth.
The Walk For Warmth raises money to pay utility bills of families in Ottawa County who are in shut-off status with their utility company. The Walk For Warmth event will take place Saturday, February 12 at 8:30 am at City On A Hill Ministries in Zeeland. Everyone is welcome, and registration is free. The walk itself is a 2-mile, well-marked stroll around downtown Zeeland. Community Action Agency of Ottawa County which organizes the Walk For Warmth, reached out to area high schools to participate in its annual contest. The poster contest drew over 25 design submissions from both Coopersville and Holland High Schools. The contest was juried by the Holland Area Arts Council, which makes the winning design an official designation and will carry a great deal of weight in Erica's portfolio. "We love doing this," says Lorma Freestone, Executive Director, Holland Area Arts Council, "We appreciate that Community Action Agency is reaching out to our local schools and particularly to art students. This contest provides for them an excellent real-world design exercise. The designs that we've seen are just great!" Lindsey Hanson, Art Instructor, Coopersville High School says, "I love this project and look forward to it every year. It's a great teaching tool for the students, and they love to work on it. Plus it's a great cause." Erica Pizarro is in Hanson's Senior Portfolio class. "This was a really fun project and I'm excited to have this design in my portfolio. Supporting the Walk for Warmth was great, too, and I'll be taking the posters to area businesses downtown to put in their windows." Community Action Agency of Ottawa County assists individuals and families throughout Ottawa County with housing-related issues. These issues range from weatherization, food security and distribution, and migrant services to utility assistance. It is for the Utility Assistance program the Walk For Warmth raises funds to supplement. The CAA's Utility Assistance program helps pay the utility bills of individuals and families in shut-off notice with their utility company. Last year the Walk For Warmth contributed money that assisted over 200 families. Generally the Community Action Agency with its range of programs assisted over two thousand households in Ottawa County last year.
# # # END # # #
OCCEDO ACTIVITY REPORT Attached to the Digest message is the latest OCCEDO Activity Report. SFA RELEASES BUDGET REVIEW (GCSI) Attached, please find a summary of the Senate Fiscal Agency’s Economic Outlook and Budget Review for the Fiscal Years 2009-10, 2010-11, and 2011-12. The estimates contained therein will be used, in conjunction with the estimates from the House Fiscal Agency and the Snyder Administration, to reach the consensus revenue estimate at tomorrow’s Consensus Revenue Estimating Conference, as required by state law. The conference will take place tomorrow morning at 9a.m. in the House Appropriations committee room. One error in the document, which was pointed out by the director of Senate Fiscal during her presentation to the Senate Appropriations Committee, occurs on page three, where the text above table two incorrectly states that the revenue is $8billion over the Constitutional Revenue Limit. In fact the state is $8billion below the revenue limit. The figure in table two just below it is correct. The Senate Fiscal Agency is predicting a General Fund/General Purpose shortfall of $1.84billion for the FY 2011-12, the budget year on which legislators are just beginning work. At tomorrow’s
conference, this estimate, along with estimates of other economic and revenue indicators, will be synthesized with the estimates from the House Fiscal Agency and the Administration. GCSI executives will be in attendance at the conference, and will report immediately on the final estimates once the agreement is signed by all parties. UPJOHN INSTITUTE FORECAST George Erickcek of the Upjohn Institute gave his economic forecast for the Holland Chamber of Commerce earlier this week. The report is attached to the Digest email message.
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Highlights ofSenate Fiscal Agency's
Economic Outlook and Budget Review
FY 2009-10, FY 2010-11, and FY 2011-12
Presented to the Senate Appropriations Committee
Ellen Jeffries, Director SENATE FISCAL AGENCY
January 13, 2011
http://www.senate.michigan.gov/sfa/
Economic Review
� In September 2010, the National Bureau of Economic Research announced that the U.S. recession ended in June 2009.
� The 2008-2009 recession was identified as the most severe economic contraction in 70 years.
� During 2010, the U.S. economy is expected to show the strongest growth since 2004,while the Michigan economy is expected to finally finish contracting.
� Michigan's economy is forecast to exhibit both income and employment growth by 2012, although the improvements will be modest.
� Inflation-adjusted personal income is projected to have risen 0.9% in 2010, and then forecast to remain stable in 2011 and increase 0.7% in 2012.
� Payroll employment is expected to remain flat in 2011, after declining by 0.8% in 2010,and then increase 0.9% in 2012. The projected increase in wage and salaryemployment for 2012 would be the first increase since 2000.
� In Michigan, higher vehicle sales, stability in the housing market, and an improvednational economy are expected to allow the unemployment rate to decline, from 13.6% in 2009 and 13.3% in 2010, to 12.4% in 2011 and 11.6% in 2012.
� Compared with the May 2010 Consensus Economic Forecast, the U.S. forecast isslightly weaker while the Michigan forecast is slightly stronger.
� Table 1 summarizes the SFA's economic projections for calendar years 2009 through 2012.
Table 1SFA ECONOMIC PROJECTIONS
(Calendar Year)2009
Actual2010
Estimate2011
Estimate2012
Estimate
Real Gross Domestic Product (% change) ...................... (2.6)% 2.8% 2.0% 2.3%U.S. Consumer Price Index (% change) .......................... (0.4)% 1.8% 1.7% 2.0%Light Motor Vehicle Sales (millions of units) .................... 10.4 11.5 12.7 14.1U.S. Unemployment Rate (%).......................................... 9.3% 9.6% 9.5% 9.6%
Real Michigan Personal Income (% change)................... (2.5)% 0.9% 0.0% 0.7%Michigan Wage & Salary Employment (% change) ......... (6.9)% (0.8)% 0.0% 0.9%Michigan Unemployment Rate (%) 13.6% 13.3% 12.4% 11.6%
1
Forecast for State Revenue
6.4%6.1%5.1%
1.1%
-2.7%
2.9%
6.5%
8.3%
6.0%6.1%5.5%5.9%
7.9%
6.1%
-1.6%-1.5%-0.8%
1.8%
4.5%
1.0%1.2%0.5%
-13.1%
-5.7%
2.1%2.9%
Fiscal Year'86-'87
'87-'88'88-'89
'89-'90'90-'91
'91-'92'92-'93
'93-'94'94-'95
'95-'96'96-'97
'97-'98'98-'99
'99-20002000-01
'01-'02'02-'03
'03-'04'04-'05
'05-06'06-07
'07-08'08-09
'09-10'10-11
'11-12-15.0%
-12.0%
-9.0%
-6.0%
-3.0%
-0.0%
3.0%
6.0%
9.0%
12.0%
15.0%and School Aid Fund Baseline Revenue
Change in General Fund/General Purpose
(Annual Percentage Change)
SFAEstimate
� The percentage changes in baseline General Fund/General Purpose (GF/GP) and School Aid Fund (SAF) revenue for FY 2009-10 through FY 2011-12 are compared with the actual growth rates during the preceding 20 years in Figure 1.
Figure 1
� The increases in baseline revenue estimated for FY 2010-11 and FY 2011-12 represent the first increases in several years. Table 2 provides a summary of the SFA's FY 2010-11 and FY 2011-12 GF/GP and School Aid Fund revenue estimates.
� As Table 2 indicates, FY 2010-11 GF/GP revenue is estimated to increase by 4.2%over FY 2009-10 and SAF revenue is estimated to increase by 1.2%. For FY 2011-12,after accounting for tax changes, GF/GP revenue is estimated to decline by 0.5% while SAF revenue will increase by 1.8%.
� The stronger economic fundamentals for FY 2011-12 will be offset by several tax policychanges that will reduce GF/GP and School Aid Fund revenue. Among the expectedchanges are:
o The State income tax rate is scheduled to fall by 0.1% starting October 1, 2011,and will continue falling by 0.1% annually until it returns to the 3.9% level in 2015. The 0.1% rate reduction will result in a loss of $162.0 million in FY 2011-12.
o The net revenue loss due to Michigan's film credits will increase to $142.1 million, up from $105.3 million estimated for FY 2010-11.
2
� Based on the SFA's revised revenue estimates, revenue subject to the Constitutional revenue limit is estimated to be more than $8.0 billion below the limit for FY 2010-11and FY 2011-12.
Table 2SFA REVENUE ESTIMATES
GENERAL FUND/GENERAL PURPOSE (GF/GP) AND SCHOOL AID FUND (SAF)(Millions of Dollars)
FY 2010-11 Estimate FY 2011-12 Estimate
BaselineRevenueAdjust.
NetAvailable Baseline
RevenueAdjust.
NetAvailable
Gen'l Fund/Gen'l Purpose..... $6,974.8 $88.3 $7,063.1 $7,260.7 ($230.5) $7,030.2 % Change ........................... 4.2% --- 4.2% 4.1% --- (0.5)%School Aid Fund ................... $10,870.4 $73.8 $10,944.2 $11,107.3 $30.2 $11,137.5 % Change .......................... 0.8% --- 1.2% 2.2% --- 1.8%Total GF/GP and SAF........... $17,845.2 $162.0 $18,007.2 $18,367.9 (200.2) $18,167.7 % Change .......................... 2.1% --- 2.3% 2.9% --- 0.9%
FY 2010-11 Estimate FY 2011-12 Estimate Revenue Limit - Under (Over): $8,032.0 $8,499.2
3
Estimate of Year-End Balances � Table 3 summarizes the FY 2009-10 and FY 2010-11 GF/GP and SAF year-end
balance estimates, and Tables 4-7 provide the detail for these estimates. There are positive year-end balances for GF/GP and SAF in both years.
Table 3 SFA YEAR-END BALANCE ESTIMATES
(Fiscal Year, Millions of Dollars) FY 2009-10 Estimate
FY 2010-11 Estimate
General Fund/General Purpose...................... $192.8 $200.7School Aid Fund.............................................. 247.9 430.0
Table 4 FY 2009-10
GENERAL FUND/GENERAL PURPOSEREVENUE, EXPENDITURES, AND YEAR-END BALANCE
(Millions of Dollars)SFA
EstimateRevenue:Beginning Balance ............................................................................................ $177.2Ongoing Revenue:
SFA Revenue Estimate .................................................................................. 6,780.5Revenue Sharing Savings-Cities, Villages and Townships............................ 583.7County Revenue Sharing-Payments Restoration........................................... (55.3)Shift of Short-Term Borrowing Costs to School Aid Fund .............................. 20.0Use Tax on HMOs (PA 440 of 2008).............................................................. 357.7
Subtotal Ongoing Revenue ............................................................................... $7,686.6One-Time Revenue:
FY 2008-09 Book-Closing MBT Transfer to SAF Budget............................... ($7.9)Transportation Economic Development Fund Transfer to Gen'l Fund ........... 12.0Railroad Improvement Fund Transfer to General Fund ................................. 5.8Liquor Purchase/Corporate Fees Transfer to General Fund.......................... 1.9State Services Fee Fund Transfer to General Fund ...................................... 1.6Use Tax for Travel Promotion-PA 36 of 2010 ................................................ (9.5)21st Century Jobs Fund Transfer to General Fund........................................ 37.5
Subtotal One-Time Revenue............................................................................. $41.4Total Estimated Revenue ............................................................................... $7,905.2Expenditures:Initial Appropriations.......................................................................................... $8,128.0Appropriation Adjustments:
Enacted Supplemental Appropriations........................................................... (340.6)Projected Year-End Appropriation Lapses..................................................... (75.0)
Subtotal Appropriation Adjustments.................................................................. ($415.6)Total Estimated Expenditures........................................................................ $7,712.4Projected Year-End Balance .......................................................................... $192.8
4
Table 5FY 2009-10
SCHOOL AID FUNDREVENUE, EXPENDITURES, AND YEAR-END BALANCE
(Millions of Dollars)SFA
EstimateRevenue:Beginning Balance .................................................................................. $238.2SFA Estimate of Restricted SAF Revenue.............................................. 10,815.5GF/GP Grant ........................................................................................... 30.2Federal Aid .............................................................................................. 1,612.3ARRA-State Fiscal Stabilization Fund..................................................... 450.0FY 2008-09 Book-Closing MBT Transfer from GF/GP............................ 7.9FY 2008-09 Book-Closing Greektown Casino Adjustment...................... (9.3)Total Estimated Revenue...................................................................... $13,144.8
Expenditures:Enacted Appropriation............................................................................. $12,823.6Enacted Supplemental Appropriations: Fund Source Shift to Community Colleges (PA 158 of 2010) ............. 208.4 Public Act 110 of 2010 ........................................................................ (116.1) Public Act 217 of 2100 ........................................................................ 30.0Projected Year-End Appropriation Lapses .............................................. (49.0)Total Appropriations ............................................................................. $12,896.9
Projected Year-End Balance ................................................................ $247.9
5
Table 6FY 2010-11
GENERAL FUND/GENERAL PURPOSEREVENUE, EXPENDITURES, AND YEAR-END BALANCE
(Millions of Dollars)SFA
EstimateRevenue:Beginning Balance $192.8Ongoing Revenue:
SFA Revenue Estimate ..................................................................... 7,063.1Shift of Short-Term Borrowing Costs to School Aid Fund.................. 45.0Revenue Sharing Freeze-Cities, Villages and Townships................. 602.3County Revenue Sharing- Payment Restoration............................... (114.7)Use Tax on Health Maintenance Organizations ................................ 377.3Enhanced Tax Enforcement Revenue............................................... 15.0
Liquor Reforms .................................................................................. 9.1Subtotal Ongoing Revenue..................................................................... $7,997.1One-Time Revenue: Tax Amnesty...................................................................................... $61.8
Unclaimed Property Reforms............................................................. 168.0Convention Facilities Transfer to General Fund ................................ 5.0Lapse of Secretary of State Work Project to General Fund............... 6.0
Subtotal One-Time Revenue .................................................................. $240.8Total Estimated Revenue..................................................................... $8,430.7
Expenditures:Initial Appropriations ............................................................................... $8,311.0State Employees Retirement Savings .................................................... (81.0)Total Proposed Expenditures.............................................................. $8,230.0
Projected Year-End Balance................................................................ $200.7
6
Table 7 FY 2010-11
SCHOOL AID FUNDREVENUE, EXPENDITURES, AND YEAR-END BALANCE
(Millions of Dollars)SFA
EstimateRevenue:Beginning Balance .................................................................................. $247.9
SFA Estimate of Restricted SAF Revenue.............................................. $10,944.2Revenue Adjustments:
GF/GP Grant to School Aid Fund....................................................... 18.6Ongoing Federal Aid .......................................................................... 1,677.8American Recovery and Reinvestment Act Funding.......................... 184.3Federal Education Jobs Fund of 2010 ............................................... 316.3Enhanced Tax Enforcement Revenue ............................................... 2.3
Lottery Reform ................................................................................... 5.0 Tax Amnesty ...................................................................................... 26.1 Liquor Reforms................................................................................... 0.9Subtotal Revenue Adjustments ............................................................... $2,231.3Total Estimated School Aid Fund Revenue ........................................ $13,423.4
Expenditures:Enacted Initial Appropriations - PA 110 of 2010...................................... $12,838.7Race to the Top State Funding - PA 110 of 2010 ................................... 26.2Supplemental Appropriations - PA 204 of 2010 ...................................... (46.8)Supplemental Appropriations - PA 205 of 2010 ...................................... 70.3Supplemental Appropriations - PA 217 of 2010 ...................................... 246.0Projected Year-End Appropriation Lapses .............................................. (141.0)Total Projected Expenditures............................................................... $12,993.4
Projected Year-End School Aid Fund Balance................................... $430.0
7
� The FY 2010-11 GF/GP budget is balanced using temporary Federal funds and other one-time revenue items. The combination of one-time revenue sources, the income tax rate reduction, and current law spending pressures creates a sizeable imbalance between projected current law FY 2011-12 GF/GP revenue and current law GF/GP appropriations. As Table 8 indicates, the SFA is estimating a potential GF/GP funding imbalance of $1.8 billion.
Table 8 FY 2011-12
STATE BUDGET OUTLOOKGENERAL FUND/GENERAL PURPOSE
(Millions of Dollars)SFA
EstimateRevenue:Beginning Balance.................................................................................. $200.7SFA Revenue Estimate .......................................................................... 7,030.2Other Revenue Adjustments:
Revenue Sharing Freeze-Cities, Villages, and Townships................ 630.6County Revenue Sharing Payments ................................................. (152.0)Shift of Short-Term Borrowing Costs to School Aid Fund ................. 45.0
Tax Amnesty...................................................................................... (29.9)Unclaimed Property Reforms ............................................................ 35.0
Subtotal Other Revenue Adjustments .................................................... 528.7Current Law GF/GP Revenue............................................................... $7,759.6
Appropriations:FY 2010-11 Enacted GF/GP Appropriations .......................................... $8,230.0Appropriation Adjustments:
Enhanced Medicaid Match Rate........................................................ 520.0Human Services Emergency TANF Funds........................................ 239.0Medicaid One-Time VEBA Payment ................................................. 160.0
Medicaid Caseload/Costs.................................................................. 210.0Federal Medicaid Match Rate............................................................ (35.0)Human Services Caseload/Costs/Full-Year Staffing Levels.............. 91.0General Obligation Bond Debt Restructuring .................................... 83.3State Police One-Time Revenue Adjustments .................................. 5.8State Employee Economic Costs ...................................................... 103.7
Subtotal Funding Adjustments................................................................ 1,377.8Adjusted FY 2011-12 GF/GP Appropriation Base .............................. $9,607.8
Potential Funding Imbalance............................................................... $(1,848.2)
8
� The outlook for the FY 2011-12 SAF budget is more favorable. The FY 2010-11 SAFbudget is less reliant on temporary Federal funding and the SAF revenue base is held harmless from the impact of the scheduled rate reduction in the State income tax.Table 9 shows a potential FY 2011-12 SAF year-end balance of $192.4 million, assuming current law revenue and a restoration to the FY 2008-09 per-pupil funding levels.
Table 9FY 2011-12
SCHOOL AID FUNDREVENUE, EXPENDITURES, AND YEAR-END BALANCE
(Millions of Dollars)SFA
EstimateRevenue:Beginning Balance .................................................................................. $430.0SFA Estimate of Restricted SAF Revenue.............................................. 11,137.5Ongoing Federal Funds........................................................................... 1,677.8GF/GP Grant to SAF ............................................................................... 18.6Enhanced Tax Enforcement Revenue .................................................... 2.3Lottery Reforms....................................................................................... 5.0Liquor Reforms........................................................................................ 0.9Tax Amnesty ........................................................................................... (6.7)Current Law SAF Revenue ................................................................... $13,265.4
Expenditures:Continuation Appropriation Level ....................................................... $13,073.0
Potential Year-End Balance.................................................................. $192.4
9
The 2011 and 2012 Employment Forecast for Ottawa County
George A. Erickcek Brian PittelkoW.E. Upjohn Institute for Employment Research
January 11, 2011
Agenda
� 2011 will be better, but it is still not what we are looking for.
� With auto production improving, the state’s economy is expected to improve modestly in 2011 and 2012.
� Holland’s economy is still pretty flat; however, the future looks much brighter.
� 2011 forecast and some additional thoughts
Nationwide, GDP increased by 2.5% in the third quarter, which is disappointing to say the least. And the forecast is not great.
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Annualized Quarterly Percent Change in GDP
Source: BEA, University of Michigan November 10,2 010 .
Employment growth occurs when GDP growth surpasses productivity growth.
Recession started in Dec. 07
Source: BEA
Employment increased by 103,000 in December. It rose by 275,000 during the fourth quarter.
-2,500
-2,000
-1,500
-1,000
-500
0
500
1,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Thou
sand
s of
jobs
Source: BLS.
Quarterly Change in Total Employment
A lower percentage of adults are employed than were in 1982.
54.0
56.0
58.0
60.0
62.0
64.0
66.0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Employment-to-Population Ratio
Source: BLS
How long will it take for employment to reach its pre-recession level if current trends continue in the private sector?
0 20 40 60 80
106,000 jobs per month
Months
July 2016
What are the headwinds?� Consumer confidence is still lackluster and
spending has slowed: bargain hunting and paying off debts are cool.
� The housing market is still flat.
� Financial markets are STILL sluggish.
Single-Family Housing Starts havehopefully reached bottom.
Source: U.S. Census
0200400600800
1,0001,2001,4001,6001,8002,000
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Single-family Housing Starts (thousands)
Financial Roadblock: Banks are still holding a trillion dollars in excess reserves.
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Million
of
dollars
Total And Required Reserves at the Federal Reserve
Total Reserves Required Reserves
Source: Federal Reserve
Demand for C & I loans has improved.
Source: Federal Reserve
Manufacturing employment is expanding.
-700
-600
-500
-400
-300
-200
-100
0
100
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Thousa
nds
of
jobs
Source: BLS.
From 2001 to 2009, the nation’s manufacturers have cut 1/3 of their labor force. However, in 2010, the nation’s manufacturers added 111,000 workers. Employment rose by 10,000 jobs.
Quarterly Change in Manufacturing Employment
Possible Government Action
� Fiscal Policy: Not much is expected with the new focus on deficit reduction.
� Monetary Policy: Carefully monitored aggressiveness. “We could raise interest rates in 15 minutes.”
� Dangers:� A growing national debt� Inflationary spiral� A weakening dollar
The dollar has been slipping against major currencies.
0
20
40
60
80
100
120
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Dollar Relative to Major Currencies
Source: Federal Reserve
Still, interest rates and inflation are both low.
-4
-2
0
2
4
6
8
10
1994 1996 1998 2000 2002 2004 2006 2008 2010
CPI90 day T
20 yr bond
Interest Rate or the Annual Percent Change
Source: Federal Reserve and BLS.
Michigan
� Employment has stabilized. From the third quarter of 2009 to the third quarter of 2010, employment increased by 6,000.
� Retail indicators are up.� The University of Michigan forecast is positive.� 30,500 additional jobs in 2011� 71,200 additional jobs in 2012
Michigan employment has finally stabilized.
Source: Upjohn Institute calculation using BLS data.
A total loss of 850,000 jobs from 2000 to 2010
60
70
80
90
100
110
120
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Employment Index 2000 =100
Michigan
Nation
Auto dealers have been making some deals.
0
5
10
15
20
25
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Mill
ions
of U
nits
Source: BEA.
SAAR
Car and light truck sales reached 16.1 million units in 2007, dipped to 13.3 million units in 2008 and then 10.5 million units in 2009. Sales are forecasted to be at only 11.7 million in 2010 and 13.2 million in 2011.
Sales have averaged an 11.7 million unit pace during the first 11months of the year.
Overall, auto production is forecasted to be up by 11.7% in 2011.
354
409
423
528
682
759.6
876
1091
1624
2133
300
400
486
461
702
748.9
970
1246
2068
2508
Coahuila Mex.Purebla Mex.
TexasMissouriAlabamaKentucky
IndianaOhio
MichiganOntario Can
Production Levels in 000s
2011 2010
Production in Michigan is expected to increase by 27.3% in 2011.
Source: Ward’s AutoInfoBank
Loss of market share: In 2001, the Detroit Three controlled 74%; in 2010, they controlled only 45%.
2010Source: Wards AutoWorld.
Employment in the state’s auto industry has finally stabilized.
Source: BLS.urcce: BLSS
Auto suppliers
Auto assembly
Employment in Thousands
Michgan’s retail activity has picked up.
35
40
45
50
55
60
65
00 01 02 03 04 05 06 07 08 09 10
Index Retail Activity in Michigan(12-month moving average)
Retail Index
Hiring
NOTE: Index = percent reporting an increase in sales + [0.5 x (% reporting no change)].Source: Federal Reserve.
Holland-Grand Haven MSA
� 2010 was a tough year.� Employment was down.
� Population out-migration is continuing.� A short and hurried review of last year’s
forecast� Forecast for 2011 and 2012� Thoughts:
� Ottawa’s place in the region� Importance of design� Talent issues moving forward
2010 was not a good year. Ottawa County lost 3,000 jobs due to significant declines in manufacturing and government.
-4000 -3000 -2000 -1000 0 1000 2000
Government
Leisure & Hospitality
Education & Health Srvs
Professional & Business Srvs
Financial Activities
Retail Trade
Manufacturing
Total
Ottawa Co. Change Jan to Nov 2009 - Jan to Nov 2010
Source: MDLEG CES.
Older data suggest that layoffs in the furniture industry are largely to blame.
-1500 -1000 -500 0 500
FoodTextileWoodPaper
PrintingChemical
PlasticsPrimary metal
Fabricated MetalMachinery
Compuer and electronicsElectrical
TransportationFurniture
Manufacturing
Detailed Manufacturing Employment Change Q1 2009 to Q1 2010
Source: MDLEG, ES-202 data.
Ottawa County has tracked closely with the state solely because of its industrial mix.
80
85
90
95
100
105
110
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Index of Total Employment (100 = 2000 average)
Source: W.E. Upjohn Institute and BLS.
U.S.
Ottawa County
Michigan
The county did not do as badly as the rest of the state in manufacturing.
45
55
65
75
85
95
105
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Manufacturing Employment Index (100 = 2000 average)
U.S.
Ottawa County
Michigan
Source: W.E. Upjohn Institute and BLS.
Ottawa County did much better that the state in services job trends as well.
85
90
95
100
105
110
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Private Service-providing Employment Index (100 = 2000 average)
Source: W.E. Upjohn Institute and BLS.
U.S.
Ottawa CountyMichigan
Manufacturing accounts for 27% of the county’s workforce, compared to only 12% of the state’s workforce.
Mfg
Const.
Retail
Prof & Bus. Serv.
Ed & Health
Leisure
Govern-ment
Other
Michigan Employment
Mfg.
Const.
Retail
Prof & Bus. Serv.
Ed & Health
Leisure
Govern-ment
Other
Holland Employment
SOURCE: BLS
Population growth remains strong; however…
1.04%
0.23%
0.78%
0.06%
0.97%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
Ottawa Muskegon Allegan Michigan U.S.
Annual Average Population Growth Rate, 2000 to 2009
Source: U.S. Census Bureau, annual population estimates.
The county has suffered out–migration for three years.
-2,000
-1,000
0
1,000
2,000
2001 2002 2003 2004 2005 2006 2007 2008 2009
Net Migration Component of Population Change in Ottawa County
International DomesticSource: U.S. Census, annual population estimates.
Residential construction remains flat.
0500
1,0001,5002,0002,5003,000
2003 2004 2005 2006 2007 2008 2009 2010
Housing Units Authorized by Building Permit in Ottawa County
Total, All Structure Types Single Family Houses
Source: U.S. Census Bureau: Manufacturing, mining, & construction statistics.
Note: 2010 is estimated year-to-date through November 2010 only.
Still, housing prices have stabilized.
0
20
40
60
80
100
120
140
160
180
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Metro Housing Index 1995 = 100
Source: FHFA.
It could have been far worse.
0
50
100
150
200
250
300
350
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Metro Housing Index 1995 = 100
Ottawa County
Source: FHFA
Las Vegas, NV
Stockton, CA
Welcomed news: Ottawa County is bucking state and national trends in education.
0%5%
10%15%20%25%30%35%40%45%50%
Ottawa Michigan USA
Post-Secondary Education by Age in 2009
25 to 34 35 to 44 45 to 64 65 and over
Source: U.S. Census Bureau ACS.
Still, the county age profile is getting older.
0%
5%
10%
15%
20%
0 to 9 10 to 19
20 to 29
30 to 39
40 to 49
50 to 59
60 to 69
70 to 79
80 and over
Age Groups Since 1990
2009 2000 1990Source: US Census and American Community Survey.
So, how did we do last year? Well, we got the direction right.
-1.2 -1.8 -1.0 -0.5
-3.0
-5.7
2.3
-16.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
Total Goods-producing Services-producing Government
Forecast Estimate
Perc
ent
Chan
ge
The office furniture industry is forecasted to experience better times.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Production in Billion of Dollars
Source: BIFMA.
2011 and 2012 Employment Forecast for the Holland-Grand Haven MSA
-3.0%
-5.7%
2.3%
-16.0%
1.5% 1.7% 2.1%
-2.3%
2.5% 3.1% 3.0%
-2.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%Total Goods-producing Service-providing Government
2010 2011 2012
Perc
ent
Chan
ge
Thoughts about the future
� Ottawa County’s dependency on its neighbors is high and growing.
� For job creation to continue, employers must be focused on the meeting the needs of their customers.
� Talent development will remain on the region’s economic development agenda.
Sharing research findings from studies supported by:
� Kendall College of Arts and Design� Design West Michigan� Talent 2025
In 2008:� There were 101,186 employees working in
Ottawa County (UI-covered employment).
� There were 111,186 employed residents living in Ottawa County.
� Of the county’s employed residents only 53% worked in Ottawa County (53,215), which means that county employers attracted 47,971 workers from outside the county (47%).
Again, less than half of Ottawa County’s residents work in Ottawa County.
Who fills jobs in Ottawa County?
Where are Ottawa ResidentsEmployed?
Ottawa 53% Ottawa 48%
Kent 14% Kent 29%
Muskegon 11% Allegan 7%
Allegan 9% Muskegon 5%
Source: Census On the Map, 2008, Primary Jobs.
For me, job creation is what matters and it only occurs when you are meeting your customers’ needs.
-8
-4
0
4
8
12
2001 2002 2003 2004 2005 2006 2007 2008 2009
Em
plo
ymen
t (i
n 0
00’s
)
Job Creation and Net Change 2001-2009
Net Job Flows Job CreationSource: U.S. Census Bureau QWI.
Job creation happens everywhere, even in manufacturing during harsh times.
Source: U.S. Census Bureau QWI.0 200 400 600 800
Arts & EntertainmentProf, Sci, TechOther Services
ConstructionEducation
RetailHealth CareHospitality
Admin, supportManufacturing
Average Job Creation Per Quarter in 2009 –Top Performers (Except Agriculture)
The average rate of sales growth for the past five years reported by firms interested in design was 9.9 percent, which is higher than the 5.6 percent average reported by the other firms.
Summary findings of our recent survey of West Michigan manufacturers
The changing local composition: Growth in service and knowledge-based workers
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Based on forecast and classification by the Upjohn Institute.
Each percentage point represents roughly 6,700 workers in 2025.
West Michigan – Grand Rapids-Holland-Muskegon
Production jobs: Education is key to a high-tech manufacturing base, but the number of young dropouts entering the field is alarming.
2008 Educational Attainment of West Michigan Production Workers
0%
10%
20%
30%
40%
50%
Dropouts H.S.Diploma or
GED
SomeCollege
Associate'sDegree
Bachelor'sdegree
GraduateDegree
Age 19 to 29 Age 30 and OlderAnalysis of Ruggels et al IPUMS data.
The local myth: The younger generation is better educated than earlier generations.
West Michigan: Bachelor's Degree or Higher by Age
0%
5%
10%
15%
20%
25%
30%
25 to 34 35 to 44 45 to 64 65 and olderU.S. Census Bureau, ACS 2006-2008.
Another 3,500 individuals ages 25-34 would need to obtain degrees just to bring the level up to that of 35-44 year-olds.
More adults are going back to college in West Michigan.
Percent of West Michigan Population Enrolled in Post-Secondary Education by Age
0%
3%
6%
9%
12%
15%
18%
25 to29
30 to34
35 to39
40 to44
45 to49
50 to54
55 to59
60 to64
65 andup
2000 2008Source: Calculated using Ruggles et al iPUMS database. Note: Includes all types of post-secondary schooling, including tech or vocational schools, community colleges, universities, and graduate or professional schools.
The 2011 and 2012 Employment Forecast for Ottawa County
George A. ErickcekBrian PittelkoW.E. Upjohn Institute for Employment Research
January 11, 2011
The Development of Indicators
� K–12 Indicators: The preparation of the emergent workforce.
� Post-Secondary Indicators: Tracking the region’s skill development system.
K-12 Educational Indicators
Index 100 = Top 5 Michigan Counties
80
85
90
95
100
Pre-K Math ELA Math ELA Math ELA Math ELA Grad
Top 5 Counties West Michigan
3rd Grade 6th Grade 8th Grade 11th Grade
MEAP MME
Post-Secondary Indicators
0102030405060708090
Attendingpublic
university inMichigan
Not takingremedialcourse,
traditional
Not takingremedial
course, non-traditional
2 yearretention rate,
part time
2 yearretention rate,
full time
4 yeargraduation
West Michigan Top Performers
Michigan Comparison National Comparison- Attending public university in MI = share of graduating high school seniors in 2008. - Top performers = 5 best-performing counties with over 50,000 people (Marquette, Oakland, Ottawa, Kalamazoo, & Clinton counties).
- Not taking remedial courses = The 2008 percentage of community college students not requiring remedial coursework.- Top performers = Best-performing 3 of MI community colleges.
* See appendix for complete comparison list.
Post-Secondary Indicators
0102030405060708090
Attending public
university in Michigan
Not taking remedial course,
traditional
Not taking remedial
course, non-traditional
Two-year retention rate,
part time
Two-year retention rate,
full time
Four-year graduation rate
West Michigan Top Performers
Michigan Comparison National ComparisonThe indicator Two-year retention rate refers to the 2007 full-time and part-time retention rates of West Michigan’s community colleges.
Four-year graduation rate is the published 2007 graduation rate for traditional four-year colleges and universities.
The top performers bars represent the top 10% of all schools in each category nationwide.
* See appendix for complete comparison list.