Updates About Economy

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 Net revenue from the Michigan Business Tax (MBT), Corporate Income Tax (CIT), as well as the repealed Single Business Tax totaled $38.7 million, $15.4 million more than expected.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.

The Michigan Senate recently approved SB 723 with bipartisan support. If successful, this bill would increase the total tax capture cap from $1.6 billion to $3.5 billion, set new limits on individual projects, and update eligibility criteria under the Brownfield Redevelopment Financing Act. It also adds new transparency requirements, including enhanced reporting and a searchable database of approved projects, and directs a portion of additional tax capture toward housing, child care, small business, and placemaking programs. The legislation passed 20–13 and has been transmitted to the House for consideration.

The Senate also passed two related bills aimed at strengthening long-term economic planning in the state. SB 213 and SB 214 would create a Strategic Advisory Board within the Michigan Strategic Fund. The board will take on the task of developing a 10-year statewide economic development plan. Once completed, the plan would be updated annually by the Michigan Economic Development Corporation (MEDC). Both bills similarly passed the Senate 20–13 vote before being received by the House.

Separate legislation to revive a modified version of the Good Jobs for Michigan program has also been proposed by Sen. Sam Singh (D-East Lansing). SB 472 and SB 473 were reported unanimously by the Senate Regulatory Affairs Committee and would restart the incentive program, which expired in 2019, with updated requirements related to job creation and wage standards. The bills include additional eligibility and compliance provisions and are intended to help the state’s economic development strategy. Discussion between the House and the Senate on the bills are expected to continue into the new year.

As we enter the new year, we will also begin seeing new wages in Michigan, according to the state’s Improved Workforce Opportunity Wage Act. Michigan’s minimum wage is set to increase from $12.48 to $13.73 per hour. Tipped employees, who receive 40% of the minimum wage, will see their hourly minimum wage increase to $5.49 per hour, assuming the employee exceeds the $8.24 tip threshold.