Lansing’s Political Dictionary: $400 Million Tax Revenue Increase Called ‘Shortfall’

Government math at work

Lobbyists, politicians and some media voices are complaining about an alleged $2 billion “budget squeeze” facing Michigan state government in the next few years.

The latest was in a Detroit Free Press editorial board op-ed that warned of an impending financial crisis.

The article read: “Michigan’s facing a $2-billion shortfall in its $10 billion general fund by 2022, an analysis by the nonpartisan Citizens Research Council found, thanks to outstanding tax credits offered to businesses, and an ill-advised deal to repair the state’s roads that relies on future revenue growth, which isn't happening.”

ForTheRecord says: Despite the alarmism, the amount of tax and fee revenue is growing.

The General Fund and The School Aid Fund are two of the largest separate state accounts.

The amount of tax revenue going into the General Fund and School Aid Fund is projected to rise from $23.4 billion in 2017-18 to $24.8 billion in 2020-21. That would be a $1.4 billion or 6.3 percent increase over those three years. 

The Free Press editorial cites a $2 billion shortfall in the General Fund by 2022. But the House Fiscal Agency projects General Fund revenue to increase from $10.4 billion to $10.8 billion from 2017-18 to 2021-22.

A $400 million increase doesn't look like a “shortfall."