Updates About Revenue Reports

The Senate Fiscal Agency’s February 2025 Revenue Report shows that the state’s tax revenues totaled $1.3 billion for the month, reflecting a 5.8% increase from February last year. However, fiscal year-to-date General Fund collections fell short of expectations by $127.3 million, while School Aid Fund collections exceeded forecasts by $24.1 million. Despite lower-than-anticipated use tax revenues and increased individual income tax refunds, the elevated collections from income tax withholding, the Insurance Tax, and Corporate Income Tax helped offset the gap.

Sales tax receipts rose 1.6% year-over-year to $774.3 million, surpassing projections by $24.4 million, while use tax collections fell 2.7% below February 2024 levels. Business tax revenues showed improvement, with net Michigan Business Tax, Corporate Income Tax, and the repealed Single Business Tax contributing $50.7 million—an increase from the previous year’s negative returns. Real estate transfer tax collections also rose significantly, increasing 24.1% from February 2024.

Michigan’s January Consensus Revenue Estimating Conference (CREC) revealed an upward trend in state revenues for the current fiscal year, with a $588 million increase attributed to higher taxes. Projections suggest a $1.2 billion budget increase for FY 2026, divided between the School Aid and General Omnibus budgets. While job growth continues post-pandemic, Michigan’s unemployment rate has also risen, driven by high federal interest rates impacting manufacturing. These findings set the stage for FY 26 budget discussions, beginning with the Governor’s executive budget recommendation in February.

Details on previous revenue reports are available Here.

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.