Here’s a rule of thumb for interpreting news media coverage of state and local fiscal crises: the further away the crisis is, the more likely the news account will portray the officials reponsible as victims of economic forces beyond their control.  Sunday’s New York Times article on Michigan is a case in point.

The article begins:

Long before California resorted to i.o.u.’s to pay state bills, and before New York’s political insurrection made a mess of this year’s budget planning, and even before the recession pushed dozens of other states into their worst fiscal distress in decades, lawmakers here were cutting.

The cuts started in the 2002 budget year, when some prisoners were ordered to sleep two to a cell. Then came cuts to state colleges in 2003, and orchestras, zoos and operas in 2004. Medical payments for the poor were cut in 2005, followed by cuts to a youth prison in 2006. After that? More cuts — to prisons, crime laboratories, libraries and day care programs.

Last month, 100 state troopers were laid off, and the troopers left behind were told to drive around less to, of course, cut costs.

In all, even before thinking about the coming year’s $1.8 billion shortfall, Michigan’s lawmakers had — through cuts, accounting shifts and tax increases — closed more than $7 billion in budget gaps over the past eight years. While many states have experienced a year of pain or perhaps two during this downturn, Michigan is approaching nearly a decade of budget misery.

The article is accompanied by a chart depicting “A Decade of Shrinking Revenue”  — helpfully adjusted for inflation using the national State and Local Government Price Deflator.  (The deflator has grown almost twice as fast as the Consumer Price Index in recent years; the differences between the two are explained here.)

The chart shows revenues declining about 50 percent in real terms during this decade, which is pretty bad.  Indeed, there’s no way to make Michigan’s tax receipts look good: in nominal terms, they rose a comparatively pitiful 19 percent from fiscal 1999 through 2008, according to the state’s Comprehensive Annual Finance Report (CAFR).

But amidst all the references to budget cuts, here’s what the Times article overlooked:

Nominal state funds expenditures by the state of Michigan–including spending financed by fees, federal aid and special revenues other than taxes–rose about 37 percent between 1999 and 2008, topped by a 4.2 percent increase (financed largely by a tax hike) in the final year.  That’s certainly much less than the comparable rate of growth in, say, New York (71 percent from fiscal year 1999-2008).   But it hardly supports the notion that Michigan officials have been whacking away at their budget every year.

Given the decline in Michigan’s economy and tax base during this period, it might be argued that they should have been doing much more to control spending.