Gov. Gretchen Whitmer and Republican legislative leaders announced a tentative agreement this week to address the projected $2.2 billion shortfall in this year's state budget. The agreement, which makes use of federal coronavirus-related assistance, applies to the current fiscal year that ends on September 30. Despite $950 million in federal aid earmarked for coronavirus spending, the a further $1.2 billion in spending cuts or transfers from the state reserve are needed, with K-12 school aid slated for a $256 million reduction (about $175 per pupil) in the current year.

Even in these difficult times, we need to be aware of the potential trouble looming ahead.

Early estimates from the state Treasury Department indicate that the state budget could have a $1 to 3 billion hole in the current fiscal year, with a $1 to 4 billion shortfall in 2020-21. Much of this comes from sales tax and income tax revenues, which, you will remember, make up the bulk of School Aid Fund revenues.