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Administration, Fiscal Agencies Reach Consensus on Revenue Estimates
Administration, Fiscal Agencies Reach Consensus on Revenue Estimates
Jan. 11, 2018
State Treasurer Nick Khouri, State Budget Director Al Pscholka, Senate Fiscal Agency Director Ellen Jeffries and House Fiscal Agency Director Mary Ann Cleary today reached consensus on economic and revenue figures for the remainder of Fiscal Year (FY) 2018 and for the upcoming 2019 and 2020 Fiscal Years.
Following today’s Consensus Revenue Estimating Conference, net FY 2018 General Fund-General Purpose (GF-GP) revenue is projected at $10.3 billion, down $101 million from estimates agreed to in May. Net FY 2018 School Aid Fund (SAF) revenue is now estimated at $13.1 billion, up $114 million from May.
“Today’s consensus agreement reaffirms that Michigan’s economy is on solid footing and revenues are stable,” Khouri said. “Employment in Michigan has been growing and is expected to continue to grow through 2019. With unemployment below 5 percent and more than 530,000 new private-sector jobs created since the start of 2011, Michigan remains on a positive path.”
Net GF-GP revenue for the FY 2019 — which begins Oct. 1 — is now forecasted at $10.3 billion, down $150 million from May’s estimate, while the FY 2019 SAF revenue estimate has been revised up by $134 million to an estimated $13.5 billion.
In FY 2020, GF-GP revenue is estimated at $10.4 billion and SAF revenue is estimated at $13.8 billion. These are the initial revenue estimates for FY 2020.
Overall, changes from the May estimates were driven by revisions to sales tax, individual income tax, business taxes and other revenues. Sales tax collections, state education property taxes and revenue from the Michigan Lottery, which are predominantly deposited in the SAF, are estimated to be higher than was estimated in May. Individual income and business taxes are lower than estimated in May and resulted in a lower GF-GP forecast.
“We now have agreed upon revenues to finish our work for the release of the state budget in early February, keeping us in great shape to get the people’s business done before the October 1st fiscal year,” Pscholka said. “The pressures on the General Fund as the result of the roads package and property tax relief are real, but with proper planning and being cautious with taxpayer dollars, were are in position to meet our obligations.”
The 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 national economic trends, international economic issues, and a significant change in oil and gasoline prices.
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