A analysis on the bond rating proposal and the economic prognosis of Michigan.

Written in 2008; 8,697 words; 65 sources; APA; $ 182.95

This paper analyzes Michigan's economy, attributing the wane to the decline in the motor-vehicle industry and low tax rates. It also discusses bond ratings, and Michigan's present bond rating of AA - which is the middle high range bond rating offered due to the changing economic climate. The paper reviews this rating by studying the demographics, unemployment rate, income and administrative structure of Michigan as well as Michigan's major sources of income and expenditure.

Table of Contents:
Executive Summary
Demographics
Population Trends and Growth
Michigan's population breakdown by age is as follows:
Michigan's population breakdown by race is as follows:
Educational Attainment
Unemployment, and Income
Income
Unemployment
Housing
Administrative Structure
Political Affliation in Michigan's Administrative Structure
Current 2008 Economic Agenda
Job Creation
The No Worker Left Behind Program
Family Health Care
Education Spending
The Michigan Legislature
Government Shut-Down
The Budget Process
Key players in the budget process include:
Development of the Executive Budget
Legislative Action
Governor Signs Bills And/Or Vetos:
Budget Revisions
The impact of economic and political issues on the Budget Process:
Revenues
The Major Sources of Revenue:
Federal Revenue
Sales and Use Taxes
Income tax:
Non-tax Revenues:
Other taxes:
Transportation Revenues:
Business Taxes:
State Education Tax:
Expenditures
Expenditures between FY 2006 and FY 2005
Cause of Budget Problems
Education expenditure
Public welfare expenditure
Hospitals expenditure
Health expenditure
Highway expenditure
Police expenditure
Corrections expenditure
Natural resources expenditure
Parks and recreation expenditure
Government administration expenditure
Utility expenditure
Economy
Credit Rating
Employment
Debt Analysis
Historical Levels of Michigan State Government Debt
Michigan Government Debt Outstanding
State Government Debt in Michigan Compared with Other States
Economic Analysis
The Economy
Unemployment
Gross Domestic Product
Contributors to the Economy
Museum Industry
Hunting Industry
Michigan Department of Natural Resources
Bond Rating and History
Bond Ratings and Their Definitions
Factors that Affect Credit Rating:
Economic Factors
Debt/Issue Structure
Financial Factors
Management/Structural Factors
Standard & Poor's and Fitch Classify Bonds as Follows:
Moody's system
Michigan's Bond Rating
Financial Impact of Lower Bond Rating
Table One--2005 Full Time Year Round Workers in Michigan by Educational Attainment
Table Two--Michigan Gubernatorial Election 2002
Table Three--Michigan Gubernatorial Election 2006
Table Four--Total State Revenue Source FY 2006
Table Five--2006 General Expenditures by Function
Table Six-- Total Expenditures between FY 2006 and FY 2005
Table Seven--Percentage Difference of Expenditures in FY 2006 and FY 2005
Table Eight--2006 Worst State Unemployment Rates Compared
Table Nine--Yearly Debt Outstanding Between 1979-2006
Table Ten--2006 Specific Debt Outstanding
Table Eleven--State Rankings of State Debt Per Capita 1980-2005
References

"Michigan's budget problems are largely due to revenues not keeping up with the cost of maintaining programs and policies. Most of the budget goes towards organizations or individuals that provide services - a little over 80 percent supports K-12 education, community colleges and state universities, cities, counties, Medicaid, community mental health programs and corrections. Trying to reduce spending will mean cutting these programs. Since revenue growth has exceeded expenditures, the state budget demands structural change. Michigan used their reserves to maintain current programs and policies, such as, education, health and corrections - the economy has declined, but spending pressures continues to accelerate. Since Michigan's state sales tax rate is low, difficult to fund major projects and programs. Half of the school aid fund is covered by sales tax."

Tags: policies, budget, credit, debt

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