News Story

Rise In State Revenue Far Exceeds Cost Of Defeated Income Tax Cut

Taxpayers would have saved $463 million; latest state revenue estimate up $827 million

The amount of tax and other revenue flowing into the Michigan state government this year and next is now projected to increase more than previously thought, marking a recurring pattern.

The projected increase was announced at a revenue estimating conference in May, one of two each year that combine the best estimates of the Legislature’s fiscal agencies and Department of Treasury budget officials into a consensus estimate.

Last year, the amount flowing into the state’s largest two accounts (the General Fund and the School Aid Fund) totaled $22.9 billion. At a revenue estimating conference in January, the consensus was that the amount would grow to $23.4 billion for the 2017-18 fiscal year, which ends in September.

But at the May conference, held this past week, the agencies increased their revenue projection to $23.7 billion. That’s $827 million more than those two main accounts received last year.

For the 2018-19 fiscal year, which begins Oct. 1, the agencies’ January consensus was for the state to take in $23.8 billion in those two funds. But in May, that number was revised upward to $24.0 billion, almost $200 million above the January estimate. None of these figures include federal money that flows into the state treasury.

For context, that $827 million in extra revenue the state is now projected to receive in 2017-18 as compared to the previous year is far more than the costs of a proposed income tax cut that was defeated last year. The tax cut would have taken $463 million from the state budget next year. But the proposal was defeated in the Republican-controlled Michigan House in February 2017.