Updates About Revenue Reports

A recent report by the Senate Fiscal Agency (SFA) showed that Michigan’s state revenue from major taxes and net lottery earnings reached $2.9 billion in November, marking a 10.5% increase compared to one year ago. Partially credited for the increase was the $147 million above anticipated projections for collections, including $31.8 million above forecast for the General Fund and $103 million exceeding expectations for the School Aid Fund. Additional funds were allocated to entities such as the Local Community Stabilization Authority and gaming-related programs.

Income tax revenue led the growth, totaling $1.1 billion for November, an 11.4% increase from last year and $6.2 million higher than projected. Use tax collections also saw a significant 7.4% increase, reaching $234.7 million. However, not all areas experienced growth; sales tax receipts dipped 1.5% year-over-year to $843.5 million, with motor vehicle sales tax collections hitting their lowest level since June 2024.

In September, the state’s major tax revenues and net lottery earnings reached $3.7 billion, marking a 1.7% increase over September 2023 and exceeding the Senate Fiscal Agency projections by $106.1 million. The General Fund saw tax collections surpassing projections by $165 million, while School Aid Fund collections fell $60 million short of expectations. Overall, fiscal year-to-date revenue for the General Fund stands $475.4 million above forecasts, and the School Aid Fund is $66.7 million over target.

¶Key Highlights:

• Individual Income Tax: Up 20.2% year-over-year, with record breaking withholding collections at 20.6% above last year.
• Corporate Income Tax (CIT): Surpassed predictions by $42.2 million, despite a 7.8% year-over-year decline.
• Sales and Use Taxes: Sales tax dropped 5.1% from last year, falling $4.7 million below the forecast, while use tax grew 11.6% but remained $8 million below predictions.
• State Education Tax (SET): Down 18.6% year-over-year and $86.2 million under predictions.

Overall, Michigan is showing strong fiscal performance driven by higher-than-expected income and corporate tax collections, with some under-performances in education-related revenues and lottery earnings.

The House Fiscal Agency’s (HFA) August revenue report indicates that both Michigan’s General Fund and School Aid Fund revenues are exceeding earlier projections from the May Consensus Revenue Estimating Conference.

General Fund revenues reached an estimated $1.15 billion in August, $12.1 million higher than previous forecasts, with year-to-date revenues increasing by $319 million. Similarly, the School Aid Fund brought in $1.4 billion, surpassing projections by $59 million, and showing a $128.4 million year-to-date increase compared to the previous fiscal year.