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Budget surplus, weather important to Michigan economy

Cars pass the General Motors Corp. in heavy snow December 19, 2008 in Detroit, Mich. Snow (or lack of snow) continues to play an important role in the economy there.

Adriene Hill: Now to the budget number crunchers in Michigan, where we're spending much of the week covering The Real Economy, and what's on the minds of voters as they get ready for next week's primary.

We've got my colleague, Jeremy Hobson with us now from Michigan Radio in Ann Arbor. Good morning Jeremy.

Jeremy Hobson: Good morning, Adriene.

Hill: So what's the budget situation like in Michigan?

Hobson: Well, amazingly, they have a surplus here.

Hill: Wow.

Hobson: Now, that is not necessarily because things are great. I mean, yes, manufacturing activity is picking up and the carmakers are doing better, so tax revenues are coming in. But it's also because the governor here made big cuts in the state budget, including to education.

Now here's why I mention education: yesterday I was speaking with somebody who follows the economy here extremely closely, and she said that one of the only ways that Michigan is going to be able to survive in the future is by keeping its educated people here in the state. Right now, a lot of them are leaving.

So one of the things that the governor plans to do in his new budget with the surplus is put money back into education.

Hill: So he took it out to make the surplus and now he's going to use that money and put it back?

Hobson: Now it's going to go right back in.

Hill: Any other impressions that have jumped out at you during your time in Michigan?

Hobson: Well, I went out to a cafe yesterday to get some coffee and I asked the woman behind the counter: how is business? And she said: well, it's getting better, but not because the economy is getting much better. It's getting better because it hasn't snowed much this year and it's warmer than usual -- people are more willing to go out and buy things like coffee.

Now, the interesting thing is, we then went off to go do an interview with the CEO of Domino's pizza, Patrick Doyle. And it started to snow, and here's what he said about that.

Patrick Doyle: Snow is a wonderful thing for business. Seriously. For Domino's we love it -- when you get a little bit of snow, people stay home and say: eh, I'm not gonna go out, I'll order in.

So as you can see Adriene, some people like the weather, some people don't, but it is extremely important to the economy here.

Hill: Yeah, and pizza does strike me as a cold weather food, I guess.

Hobson: It was very tasty after the interview.

Hill: Marketplace's Jeremy Hobson, thanks.

Hobson: Thank you.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.

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