One-time vs. ongoing funding: what does it mean?

Governor Rick Snyder
3 min readFeb 17, 2017

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Author: Anna Heaton, Press Secretary for Gov. Rick Snyder

“In this world nothing can be said to be certain, except death and taxes” –Benjamin Franklin

Death and taxes — and a rush to spend one-time money.

In the annual state budget cycle, one thing is always certain — the urge to spend a so-called budget surplus.

Economic experts and state Treasury officials meet several times throughout the year to review how much money is coming into the state from sales and income tax, and then contrast that with the forecasts of how much they estimated would be collected. Sometimes it is less than they thought — a “revenue shortfall” and sometimes it is more than they predicted, which many are quick to call a “budget surplus”.

George W. — an icon of fiscal responsibility

Just as we all dream of what we would spend a massive and unexpected amount of money on if we won the lottery or were adopted by our favorite A-list celebrity, lawmakers quickly identify priorities on which they think the “surplus” should be spent. These can certainly be good priorities, but they need to be put in the context of a one-time expense (rebuilding a bridge or overpass) versus enacting a long-term expense that must be paid each month or year (reducing the income tax, for example).

The easiest way to think of this is in terms of your own budget.

Ongoing revenue is your paycheck.

One-time revenue is a tax return, a generous holiday gift or an inheritance.

When you get a larger-than-anticipated tax refund, do you run out and buy a new car on which you will then have to make monthly payments? Personally, I usually buy shoes (I could write many more blog posts on this topic, which would honestly probably be more popular than posts about taxes).

I’ve got my eye on these for my tax refund expected in March

In the past, I’ve also purchased appliances, such as a new dishwasher to replace a broken one that leaked all over the kitchen floor. But it wouldn’t make sense to purchase a new car that will then require monthly payments, because there isn’t additional revenue coming in each month — it was just the one time.

To put it in historical perspective, this is what Michigan always did in the past. If there was a revenue surplus, it was spent quickly and without much consideration for the future. And as everyone who lived here during the Lost Decade knows, there were terrible consequences for those decisions that have taken years to recover from.

So, that’s why lawmakers and Gov. Snyder no longer rush to spend the “surplus” and why it’s not really a surplus at all. It’s money that is set aside for when we, as a family of nearly 10 million people, might urgently need the money for something that greatly affects our quality of life, such as infrastructure. It might be seem boring (just as I was frustrated by having to spend my big tax refund on a new dishwasher instead of pointy pink heels) but it is still the wise, long-term choice that protects a balanced budget and staves off future debt.

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Governor Rick Snyder

Governor of Michigan and One Tough Nerd. Working in dog years to reinvent Michigan. Read more at www.michigan.gov/snyder