Updates About Economy

Today, state economic leaders presented updated revenues during the May Consensus Revenue Estimating Conference (CREC). The report showed Michigan’s revenues are slightly stronger than originally predicted. Current fiscal year (FY26) revenues are up $307.3 million compared to January projections, and FY27 revenues are up $173.8 million, mainly due to stronger Income Tax and Use Tax collections. The School Aid Fund (SAF) remains stable, while the General Fund is still lagging but has improved since the January CREC. This improvement can partly be attributed to tax policy changes shifting revenue to the SAF. These updated estimates will guide lawmakers as they negotiate the FY27 budget ahead of the July 1 deadline.

For a more in depth review of the May CREC, you may access the presentations and materials here.

Recently, Governor Whitmer’s office released the results of a survey conducted over the last year in which nearly 4,000 Michiganders were polled on the effects of tariffs and rising costs. She also released a statement in which she highlighted the executive directive she signed that aims at assessing the effect of federal tariffs and stressed her commitment to keeping costs down and making Michigan more affordable.

The survey found that 70% of Michigan residents believe the economy is heading in a worse direction compared to the same time last year. Additionally, 52% of Michiganders report being significantly affected by rising costs in their ability to plan for the future.

Respondents reported rising costs in the following areas:

• 86% saw increases in grocery costs
• 85% saw increases in utility costs
• 70% saw increases in health care costs
• 40% saw increases in gas prices
• 32% saw increases in housing costs

The Senate Fiscal Agency (SFA) recently released the Monthly Revenue Report for February 2026. The report detailed that tax collections came in at $1.6 billion, $225.2 million above expectations and 23.1% higher than February 2025.

Leading the pack in revenue were collections from the sales and use tax, which totaled $882.2 million. Despite bringing in the most revenue, collections were still $46.3 million below the predicted level. Net income tax collections exceeded expectations by $248.4 million for a total of $383.0 million in revenue. A large part of the overperformance was due to individual income tax refunds coming in $159.2 million lower than the predicted number. Net revenue from the Michigan Business Tax (MBT), Corporate Income Tax (CIT), as well as the repealed Single Business Tax totaled $38.7 million, $15.4 million more than expected.

General Fund (GF) collections were $237.6 million above the estimated number, and School Aid Fund revenue lagged behind by $16.4 million. So far, the year-to-date actual revenue compared to predicted for both the General Fund (GF) and School Aid Fund are up. The GF is above expectation by $268.5 million whereas the School Aid Fund is up by $56.5 million.