Updates About Revenue Reports

Revenue collections from major taxes and lottery were slightly higher than expected for October, according to a recent revenue report released by the Senate Fiscal Agency (SFA). Compared to October last year, revenue totals reached $4.3 billion and are up nearly 6%. Revenue from the State Education Tax (SET), individual income tax (IIT) withholding, and use tax all contributed to the high outcomes. Net income tax revenue also experienced a near 15% increase from October last year. However, net revenue from sales tax, the repealed Single Business Tax, Michigan Business Tax, and Corporate Income Tax (CIT) collections were all below the forecasted amounts by $92.5 million.

Collections for the General Fund came in $22.7 million under expectations. However, the School Aid Fund saw better performance with collections $52.8 million above anticipated figures. For the Fiscal YTD revenue, the General Fund is down $289.7 million from projections and the School Aid Fund is up $129.4 million.

The Senate Fiscal Agency (SFA) recently released Michigan’s Monthly Revenue Report for September. Total collections generated from major taxes and net lottery proceeds came in at $3.8 Billion, up 0.6% from SFA’s report one year ago. Despite this slight increase, revenue was still nearly $192 million below projections made during the Consensus Revenue Estimating Conference (CREC) this past May. Higher-than-expected Individual Income Tax (IIT) refunds and weaker Corporate Income Tax (CIT) collections were the primary drivers of the shortfall, though stronger returns from gaming-related revenue helped offset some losses. While September marks the end of the fiscal year on a calendar basis, the state’s accrual accounting practices mean that these totals represent eleven months of revenue activity.

General Fund and School Aid Fund tax collections also came up short by $183 million and $19.6 million, respectively. So far this fiscal year, General Fund collections are tracking $267.0 million below projections, while School Aid Fund revenue remains $76.5 million above expected levels. Income tax withholding was slightly higher than last year, but larger-than-anticipated refunds reduced net revenue. Sales tax receipts grew modestly year-over-year but still missed forecasts, and use tax revenue declined by nearly 10%. Corporate tax revenue also lagged significantly, down more than 36% from last September.

According to the Senate Fiscal Agency’s July 2025 Revenue Report, Michigan’s major taxes and net lottery revenue totaled $2.9 billion in July, down 1.6% from last July and about $130 million short of their May prediction. General Fund revenues came in $125.9 million less than forecasted, while School Aid Fund revenues missed expectations by $15.7 million.

Contributing factors included individual income tax refunds that were larger than originally anticipated, paired with smaller corporate income tax receipts and lower net lottery revenue. Stronger results from real estate transfers, the sales tax increase of 4.5%, and wagering taxes helped, but not enough to offset. So far this fiscal year, General Fund and School Aid Fund revenues remain $53.0 million and $3.6 million below expectations, respectively.