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 $10.85 billion, up $151.50 million from estimates agreed to in January. Net FY 2019 School Aid Fund (SAF) revenue is now estimated at $13.48 billion, down $68.20 million from January. Combined, GF-GP and SAF estimates are up approximately $83.30 million for FY 2019.
“Revenues remain relatively flat compared to the January forecast,” State Treasurer Rachael Eubanks said. “Trade and economic uncertainties could affect revenues moving forward, and we will reconvene as necessary to react to any significant impacts.”
Net GF-GP revenue for the FY 2020 — which begins Oct. 1 — is now forecasted at $10.78 billion, up $59.10 million from January’s estimate, while the FY 2020 SAF revenue estimate has been revised down by $86.90 million to an estimated $13.84 billion.
In FY 2021, GF-GP revenue has been revised up $67.9 million at $10.92 billion and SAF revenue has been revised down $84.9 million to $14.18 billion.
The small FY 2019 GF-GP revenue boost is being driven by strong individual income tax annual payments and stronger corporate income tax collections. Lower future revenue estimates for the 2020 and 2021 fiscal years are due to ongoing weaknesses in sales tax collections and individual income tax withholding.
“The revenue estimates announced today are basically flat and don’t fundamentally change the fact that we have constrained resources and challenges when it comes to the funding needed to address real problems for Michigan’s residents,” State Budget Director Chris Kolb said. “The residents of our state are demanding action when it comes to fixing our roads, educating our kids, and cleaning up our water, and we owe it to them to come together quickly and finalize a budget that fully provides for those critical needs.”
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 and international economic issues.