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 economic and revenue figures for the remainder of Fiscal Year (FY) 2019 and for the upcoming 2020 and 2021 fiscal years.
Following today’s Consensus Revenue Estimating Conference, net FY 2019 General Fund-General Purpose (GF-GP) revenue is projected at $10.70 billion, up $288.6 million from estimates agreed to in May. Net FY 2019 School Aid Fund (SAF) revenue is now estimated at $13.55 billion, down $23.9 million from May. Combined, GF-GP and SAF estimates are up approximately $264.7 million for FY 2019.
“Today’s agreement shows the economy is projected to grow at a modest pace,” State Treasurer Rachael Eubanks said. “While down from last fiscal year, General Fund estimates are up from May due to higher projected growth in individual and corporate income taxes.”
In FY 2019, annual income tax payments are projected to be up compared to May as the strong finish in FY 2018 provided a higher tax base for growth. Income tax quarterlies and refunds are up slightly from May while withholding is down from the last projection.
FY 2019 use tax is projected to be higher in May as the tax base grew in FY 2018. Business tax revenues are also up compared to May due to a higher tax base and lower refunds.
Net GF-GP revenue for the FY 2020 — which begins Oct. 1 — is now forecasted at $10.72 billion, up $199.1 million from May’s estimate, while the FY 2020 SAF revenue estimate has been revised up by $25.9 million to an estimated $13.93 billion.
In FY 2021, GF-GP revenue is estimated at $10.85 billion and SAF revenue is estimated at $14.26 billion. These are the initial revenue estimates for FY 2021.
“When I started in the Legislature almost 20 years ago, the General Fund total was almost exactly what we just announced today,” State Budget Director Chris Kolb said. “General Fund revenues have remained flat over a long period of time, and so we have a fundamental problem of constrained resources and additional funding needed to address real problems for Michigan’s residents.”
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 national economic trends, international economic issues, and a significant change in oil and gasoline prices.