Administration, Fiscal Agencies Reach Consensus on Revenue Estimates

Contact: See contact information below.

Aug. 24, 2020

State Treasurer Rachael Eubanks, State Budget Director Chris Kolb, Senate Fiscal Agency Director Chris Harkins and House Fiscal Agency Director Mary Ann Cleary today reached consensus on revised economic and revenue figures for the remainder of Fiscal Year (FY) 2020 and for the upcoming 2021 and 2022 fiscal years.

Overall Revenue Forecast (General Fund and School Aid Fund Combined)

 

January

May

Change from January to May

August

Change from January to August

FY 2020

$24.94 billion

$21.70 billion

-$3.23 billion

$24.01 billion

-$926 million

FY 2021

$25.51 billion

$22.46 billion

-$3.05 billion

$23.04 billion

-$2.47 billion

FY 2022

$26.16 billion

$24.07 billion

-$2.09 billion

$24.45 billion

-$1.71 billion

 

“The good news is that the decline in revenues have not been as severe as we forecasted in May in the early days of the pandemic; however, we are still down nearly $1 billion overall from January’s forecast,” State Treasurer Rachael Eubanks said. “Federal stimulus programs played a critical role in indirectly supporting state revenues, albeit still quite a bit less than we would have likely generated had it not been for the pandemic. As we move forward, we have not assumed additional federal assistance will be available due to the delay in its enactment, which is the main driver for the precipitous drop in revenues for fiscal year 2021.”

These revenue estimates are based on the most recent economic projections and forecasting models. As with any economic and revenue forecasts, there are potential risks to the estimates agreed to today, including further COVID-19 outbreaks, national economic trends, and international economic issues.

“While today’s updated revenue picture is better than the forecast in May, it’s still far worse than the January forecast and we are still looking at dramatic revenue losses in fiscal years 2021 and 2022, totaling nearly $4.2 billion,” State Budget Director Chris Kolb said. “We need additional federal aid to help us manage through the devasting impact COVID-19 has had on our revenues or else we will be facing tough decisions about what essential services and programs to cut. An additional federal stimulus package is a must to help our residents and businesses and to provide crucial support to state and local governments.”

The August Consensus Revenue Estimating Conference’s detailed forecast – as well as presentations from today’s session – can be found on the Senate Fiscal Agency’s website.

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Contacts:

Ms. Danelle Gittus (gittusd@michigan.gov) or Mr. Ron Leix (leixr@michigan.gov)

 

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